FREE ADVICE FOR ALL NEW GUYS but ONLY 1 out of 100 will follow it!!

[fdjake]

I want to know when I should be buying Toll brothers, Centex, kb homes, etc.....

Personally,  I think you buy these stocks when we are at the very bottom of the recession.  We're not there..... YET!

Look at what we've been told over the last few months.....

"We are going to miss a recession."  Yea right....... HELLO,  we're IN ONE NOW!!!!!!!

"The housing market has bottomed"  OH really??  Foreclosures are up 50% over last years DISASTER!!

I don't even know where to start with these comments.  If a GLOBAL HOUSING CRISIS can't create a recession, then maybe OIL going up 100% in a year can do it?  The media is a JOKE.   We're not even CLOSE to the bottom of this downturn.  The big home builders will hit single digits before this is over. 

Here's a nice 20 year chart on CENTEX (CTX) Pay close attention to the late 1980's to early 1990's recession years.  Anyone here want to guess what the path of least resistance is on this stock???  HINT...It ain't UP!!

http://finance.yahoo.com/q/bc?s=CTX&t=my


How do I know this???  Look at the historical charts on these companies.  They TANK when the economy REALLY hits the skids.  We're NOT there yet..... BUT.......JUST WAIT.....this little OIL shock we're all dealing with now will have DEEP and LONG LASTING effects on an economy that is "already in recession" according to Warren Buffet.

One last point........Has anyone here noticed the GLOBAL impact of our economic situation?????  IT'S HAVING A BIG EFFECT!!!!!!!!!   Google search "England's Housing Slump"  then try "Spain's housing crash"  Keep an eye on these events because the LAST decent segment of the American economy is EXPORTS.  As the global economy SLOWS so will foreign demand for our goods and services.  In my opinion THIS will put the finishing touches on ANY debate about a recession.  Once you reach a point where NO ONE is arguing over WHETHER there IS a recession, your probably near the bottom of it.

Start paying attention to the INVENTORY levels of UNSOLD homes, currently they are still rising nationally.  When that starts to drop, or even starts to stabilize, the time will be at hand to load up on the home builders!!

But.... you better be VERY patient.  I mean 5 to 8 years worth of patience.  If you are......... Those stocks will make you a PILE of money.

[icque]

Good advise I am living proof !
 
I live in the NYC area. I have an apartment, paid for,  and an investing property with 4 apartments. My credit is way over 700.
I want to move to CO. I will rent my place in  NY.  I am looking to buy 2 properties in the Denver area, one to live in and one to rent. I am a very conservative investor so I won't mess with short sales or foreclosures. I want only REOs. How do I go looking for these sales. Is RealtyTrack the place to subscribe?
Thanks for your help

[luckyrock]

I'm a newb to REI and I'll gladly take your advice.  Now if only I could convince my Gen X friends that the road to financial independence is not paved by racking up credit card debt and spending all your time talking smack to 14 year olds online during the latest Halo tournament.

[Tien]

Be glad.


They go into credit card debt to put money into our pockets.

[fdjake]

Luckyrock,

You're ALREADY so far ahead of your competition (friends) it's not even funny!

Just the fact that you realize the mistakes your friends are making shows how smart you are.  Learn from their mistakes, and let those lesson MAKE YOU MONEY!!

The BEST advice I can give you is to SAVE like your life depends on it.  No matter how much money you make in your lifetime YOU CAN NOT BUY TIME!!!!!!  By starting EARLY your getting as close to actually BUYING time as you can.  Every successful investor I know makes the same comment.......

I wished I started saving SOONER!!!!!!!

Oh....about your friends......take this from someone who's been trying to convince friends to invest for themselves for 20+ years......

DON'T WASTE YOUR TIME!!!

[adz888]

Great post and it pleases to say it, that I am on my way to becoming that 1 in 100!

[brsdb3381]

Items I have done to raise cash

Plasma bank = $65 week paid for a divorce/ gas now
auto draft from checking to savings $75 every 14 days.
Have $350 month held in extra taxes from pay check = over 7K in refund this year
started a small business resulting in about 1k saveable monthly.
Results = over 16k liquid in 1 1/2 years
looking for a good deals in 1-4 unit buildings to get started, first one fell through not enough capital  should be able to fix that by end of this year
just discovered business savings at Chase pays 5x interest of regular personel savings accounts.
Brad

[j1dias]

Have $350 month held in extra taxes from pay check = over 7K in refund this year

brsdb3381 - not sure if you realize that you are lending money to the government at 0 interest rate. you may want to consider reducing the amount of tax withheld and invest the money in a savings account.

just discovered business savings at Chase pays 5x interest of regular personel savings accounts.

Even better than that - there are some local banks that offer checking account at 5 or 6% APR. I bank with Az Bank and Trust and they pay me 6.01% APR - all I need to do is to use my debit card as a credit card (basically I need to sign instead of use my PIN) 12 times per month - easy; and get electronic statements - easy.

It is a regular checking account. They offer this rate for the first $20k in deposits. If you have more than that you can open two accounts. And it is not an introductory rate. You may be able to find a similar account in a local bank close to you.

good luck with your plans.

[myles]

Thank you, just the exact reminder that I needed. I was feeling depressed yesterday because a friend who had shown interest in partnering with me for my first REI purchase in NYC is having doubts about staying in the US and wants to move back to Sweden. However reading this thread, I have my confidence back and will make tackle all the hurdles in my way with positive action.

I am already quite disciplined and have cut back on all unnecessary expenses. My two credit card balances are a little high so I am going to start paying those off as much as I can afford each week which will put a halt to damage to my credit rating.

I have started up a second part time job as a guitar teacher and up until I read this inspiring post, I was going to spend all that extra income on better musical gear, I now realize that if I am to take my investment plans to the next level, I need to continue to raise capital and so I have just set up a monthly deposit to a separate account and will be putting most of the money I earn from teaching into savings.

I can't believe I had forgotten such important basics as not spending everything you earn....

So a big thank you for setting me straight again.
Peace
Myles

[ermie12]

I am a newbie looking to purchase my first investment at the end of this year, meanwhile spending time researching. I guess i apply to the 1% rule, because I decided that I wanted to make this investment December of last year and started saving since January.

-Every week, 2/3 of my paycheck goes into savings; yes 2/3!!! i do ok for a recent grad so it is about 400-450 a week
- i also invest 8% to my retirement savings account and have some other money (not much)invested in roth ira and mutual funds
-living cheaply, recently moved and considering moving in with family to save
-dont have a nice car or plan to invest in anything nice
-restrict some activiites when prices are steep

point is, at the end of this year, i plan to surely have a lot more than 10% saved from my gross. i have the disciple, desire, and work ethic....unfortunately i have no idea where to turn to for mentoring or guidance. i do not know anyone in the field or that is involved in this business to lean on.  how can i find these people?? i blieve it imperative to being successful.

Looking to buy end of this year an investment property. currently dont own anything and bounce around a lot with my job. i plan to keep my full-time job while continuously investing but hopefully will be able to stop working full-time in the next 10 years or so. i am 24.

So thank you for the advice and i am already do that and more - but now what?!

[justin0419]

What part of REI are you interested in to start out?  I say to start out because you can always branch into other areas later.  For now, are you interested in buy & hold for rentals?  or rehabbing & reselling? or wholesaling? etc?
Being very disciplined and saving as you are will open up some doors for you with lending.  That will give you some more options for investing.  If you bounce around now with your job, will you be able to settle in a location later?  Check to see if there are any Real Estate Investor Associations near you.  Otherwise, you might be able to find some Realtors who also invest on the side and can help give you some guidance. 
If you're saving that much of your check, I hope you have a decent return on your savings (relatively speaking for savings and money market returns).
This site is full of great guidance and help.  I suggest you find an area of REI that interests you and learn as much as you can about it. 

[ermie12]

i am currently interested in buying a property lower than value (arent we all!); if necessary take some time to fix it up (MINIMAL AT BEST); then either rent for the time being and see about doing another valuation of the property, taking the difference and do it again. i would probably hang onto it for a little bit and rent but dont know if i want to go that option and deal with all the headaches associated with liability.

long story short -
buy and rent
or
buy and flip

[j1dias]

long story short -
buy and rent
or
buy and flip

Ermie - from a newbie to another... I believe the criteria you use to analyze deals is different depending on your exit strategy (if you are planning to hold it or to sell it). Also the financing would also be different - if you are planning to hold it for the long term you will probably look for a long term financing with lower interest rates. If you are lookinig to flip the interest rate will not matter much as you are going to keep the house only for few weeks or months.

So although you can probably do both, for each deal you consider I suggest you define your exit strategy upfront...

Hope this helps. Good luck.

i plan to surely have a lot more than 10% saved from my gross.

PS: quick comment - if you are saving 2/3 of your paycheck, you should have 2/3 of your gross income saved by the end of the year (not 10%)... :O)

[ermie12]

haha thanks! i know i am saving much more than 10%, that was the original criteria asked to save in the first posting, :-)

I am going to look to purchase one property and hold for about only a couple years MAX. i will rent it out in the meantime, but then would like to take profit, and reinvest in 2 properties, and continue doing it this way.

as a full time employee and most likely purchasing property in a different state, it is not realistic for me to think i can flip a property in only weeks to months. i just moved to DC for my job and will NOT be investing here as prices are way too hihg. as a newbie, i want to start small and low. thought i could probably get some good deals down in FL right now for under 100K.

I think i will try to find a REI club in the area, because i need to try to start networking so i can leverage their experience and knowledge.

Any other help would be greatly appreciated!!!!

[j1dias]

as a full time employee and most likely purchasing property in a different state, it is not realistic for me to think i can flip a property in only weeks to months. i just moved to DC for my job and will NOT be investing here as prices are way too hihg. as a newbie, i want to start small and low. thought i could probably get some good deals down in FL right now for under 100K.

Ernie12 - are you sure you want to start investing away from home? If you decide to do that I suggest you discuss the challenges and risks associated with it. I have no experience doing that, buy I would assume that you will face a different set of challenges going this route.

My approach is to do it close to home... I feel I will have more chance of success if I do it here...

Just my 2 cents. Good luck!

PS: the idea of joining your local REIA is a great idea. I went to my first meeting this week and I thought it was good. Although I don't feel I got the most out of it... I am now feeling much more confident for next month's meeting... :O)