NinjaPigeon - My Flight to Financial Independence

Sunday, March 04, 2007

Real Estate Investing

A friend of mine had tickets to go see David Lindahl talk yesterday on multi-family investing. Since he was unable to make it, he offered them to me. So, I went with another friend of ours to the all day session.

As usual, the 1 day session is just an extension of the 2hour session, and also is an upsell attempt to get you to go to the bootcamp. Normally $3995, but for that day only... $2900! Now, I'll be honest and say I get a little of a twinge when I see things like this. Meaning, I'm susceptible to them to some extent. But I remained strong and just listened to the talk.

Although there was certainly some fluff for the upsell, there was also a good bit of information in his presentation. He discussed why he did multi instead of SFH investing, and also how you could use SFH flips to get capital to move into multi. Also, he mentioned the difference between a momentum investment (a multi that already cashflows) and a one that requires rehab.

He talked about a lot of other things, but there are too many to list. The gist of it was just that the economy of scale could work in your favor and you could get much bigger paydays than you could with SFH.

I'm still on the fence about whether I should jump into real estate investing. I've got a few friends who are working on their first flip now. They have a $2100/month payment on the property, and issues have come up that are eating away at their profits. They will probably break even if they manage to sell it in the next few months. But, they will have learned a lot.

I'm just not sure if I could sleep well knowing I had $10k sitting on the table that could quickly erode. Although after the hit I took in my mutual funds this week, the diversity could be nice. Plus with a little experience behind your belt, the REI could turn into a decent source of side income. Maybe I'll wait until I can just afford to buy a vacation home that could be rented out 11 months out of the year and I basically break even on. Given 10 or 15 years of that and it'd be a nice chunk of equity ;)


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