Comments on: How much capital do you need to start real-estate investing?

By: Diane

Diane — Mon, 10 Nov 2008 18:35:07 +0000

AJC – one of the most intriguing ideas I found in the book is the use of trees. I LOVE trees and hate seeing any cut down, but after reading the book, I began to look at trees as replenishable assets. Oftentimes I see trees that have overgrown the property and better-sized trees would have more curb appeal as well as living appeal. I haven’t found the sources yet who would buy individual trees, but have suggested it for ways to pay for our son’s college tuition (replace with more size-appropriate trees, staggering the years of removal and replanting, so that future generations can also benefit from both the beauty, shade, and fruits of the trees, as well as enjoy the wood for more than kindling when the wind blows or the tree dies.)

By: Finding the next ‘hot’ real-estate market … « How to Make 7 Million in 7 Years™

Mon, 10 Nov 2008 16:40:40 +0000

[...] November 10, 2008 Rich I hope that I stressed sufficiently in my recent post about How much capital do you need to start real-estate investing? that my “purchase in the median-to-just-below” price range recommendation is based on [...]

By: AJC

AJC — Sun, 28 Sep 2008 23:12:40 +0000

@ Skeptic – no , sorry … it’s a skeptic’s job to remain poor and, well, skeptical. Not to worry, though, cynicism has it’s own rewards

As for me: I would get a part-time job, save at least 50% of that second income to create some cash and to help fix my credit … then find a partner to buy some real-estate with (I would do all the work to locate, fix up, rent, etc. … he could just sit on his fat a** as long as he put up the money).

By: Skeptic

Skeptic — Sun, 28 Sep 2008 10:17:48 +0000

I have a minimum wage income, no cash, and bad credit. Can I start real estate investing?

By: AJC

AJC — Thu, 25 Sep 2008 17:13:22 +0000

@ Rick – For those who like formulas, Rick’s is as good as any. Thanks, Rick!

By: Rick Francis

Rick Francis — Thu, 25 Sep 2008 15:41:48 +0000

Thank you for the answer! I’m very wary of no money down deals; I would think that you would get a better interest rate and avoid PMI with 20% down.

Do you have a formula that you use to determine the amount of cash you need when buying a property at price X?
Using very approximate numbers I get the following:

Cash required = closing costs – X (0.2 (deposit) + 0.02 (3months mortgage payments 8% 30 year fixed mortgage) + 0.01 (3 months property taxes + ins) +???)

It also seems that there should be a minimum market rent/property price ratio to insure that the property can be cash flow positive.

-Rick Francis

By: AJC

AJC — Tue, 23 Sep 2008 19:50:09 +0000

@ Scott – Thanks, Scott. I should mention that this “median-to-just-below” price range is based on single family homes/condos/apartments.

By: Scott

Scott — Tue, 23 Sep 2008 19:35:49 +0000

Good post! What I took from the whole post that is key on this subject is pretty much in your last paragraph: “you want to target properties in the median-to-just-below-median price range in your target area and have 15% for your first deposit + enough for closing costs + 25% of the expected value of your first years rent as a buffer (minimum).”
Oh, and also to find a neighborhood next to the new hip neighborhood.

Thanks for the tips Adrian!