Tuesday, December 20, 2011
The Safest Way to Learn how to Invest in Real Estate.
By Troy Corman, www.t2realestate.com
There are countless books, blogs, radio shows and seminars about how to invest in real estate. It seems that most of the real estate teaching gurus know that it's easier to sell dreams of riches, than it is to actually sell houses.
The books, blogs, radio shows and seminars are EXACTLY where you should begin, but not end.
Success in real estate, like life, is all about action. Action, action, we want action - A, C, T..... I, O, N!
If I wanted to learn real estate investing in Texas, I wouldn't drop a few thousand dollars on a seminar if I were you. Instead, I'd invest a few hundred on the real estate investing training program taught by Lifestyles Unlimited. It's led by a charismatic leader, self-made multi-millionaire Del Walmsley. Originally out of Houston, they now have field offices in the DFW area in Los Colinas, and a central Texas office between San Antonio and Austin.
Lifestyles Unlimited teaches how to invest in both single family homes, and multifamily homes, AKA apartments.
The Lifestyles Unlimited investing strategy is exactly what I would recommend for the first-time or newbie real estate investor. The goal is to buy a single family rental home that is a distressed sale with an ARV, or after-repaired-value between $90,000 and $120,000. A distressed sale could be a foreclosure, short sale home, or a home that needs work. If you can buy and rehab a rental home for a total cost 25% below market value, you should be in great shape.
Ideally, the single family rental home should have 3 bedrooms and 2 baths with a garage. It shouldn't be more than 1,700' and it should be a one-story home. Larger homes and 2-story homes require more labor and maintenance costs.
Your single-family investment rental home should also be a 1980 build or newer. Often homes built in the 60s and 70s in Dallas and the DFW metro have outdated floor plans, aluminum wiring and cast-iron plumbing pipes. Also, our expansive clay soils can wreak havoc on the foundations of these older homes in foundation-challenging areas like Rowlett, Lewisville and Carrollton.
Another great benefit for real estate investors are the terrific tax write-offs. For a Texas rental home worth about $100K, a real estate investor's annual tax deductions would total roughly $10,000. This includes depreciation of the building cost, mortgage interest, property taxes, insurance, maintenance and advertising.
I would expect 2012 to be another banner year for real estate investing, especially in the major cities in Texas. Rental rates continue to climb with few vacancies. Out of towners continue to flock to Dallas, Austin and Houston in search of jobs and more affordable living. In fact, some economists predict the Texas population could double by 2030.
Buying and rehabbing investment real estate is how I started my real estate career. I've bought and rehabbed a dozen units since 2005 so I'd be happy to help, or just answer any questions to help you get started.
Troy Corman is the founder of t2 Real Estate LLC, a Dallas real estate firm providing specialized knowledge with a hands-on approach. Specialties include residential real estate brokerage, land and acreage, and commercial real estate services. Contact us today at 214.827.1200 if you need to sell, buy or get your DFW property leased.