T Nation

Real Estate Investing vs. Private Lending

Curious if there are any real estate investors and private lenders out here in T-Nation? Any thoughts from those who have done both? Thanks!

[quote]Zeppelin795 wrote:
Curious if there are any real estate investors and private lenders out here in T-Nation? Any thoughts from those who have done both? Thanks![/quote]

What do you want to know?

Commercial and ground up contracting different businesses be more specific

I did this for a while. Bought a house at an auction that was in ruins, fixed everything in there (painting, plumbing, roofing etc…) and resold it. Then bought another one from the auction and did the same. I bought another house last year but haven’t done much with it as I’ve been busy lately and can’t be bothered to focus on it. I could ask some relatives and friends to deal with it but I don’t trust them well enough with my business.

I’m opening my own gym next year and that’s where my money is going to.

Anyway, WHAT IS IT EXACTLY you wanna know?

[quote]DarkNinjaa wrote:
I did this for a while. Bought a house at an auction that was in ruins, fixed everything in there (painting, plumbing, roofing etc…) and resold it. Then bought another one from the auction and did the same. I bought another house last year but haven’t done much with it as I’ve been busy lately and can’t be bothered to focus on it. I could ask some relatives and friends to deal with it but I don’t trust them well enough with my business.

I’m opening my own gym next year and that’s where my money is going to.

Anyway, WHAT IS IT EXACTLY you wanna know?[/quote]

Lol at your gym being a fitness center with a bowflex and some trx things.

[quote]DarkNinjaa wrote:
I did this for a while. Bought a house at an auction that was in ruins, fixed everything in there (painting, plumbing, roofing etc…) and resold it. Then bought another one from the auction and did the same. I bought another house last year but haven’t done much with it as I’ve been busy lately and can’t be bothered to focus on it. I could ask some relatives and friends to deal with it but I don’t trust them well enough with my business.

I’m opening my own gym next year and that’s where my money is going to.

Anyway, WHAT IS IT EXACTLY you wanna know?[/quote]

Costs twice as much per sq ft to renovate a place than to build from scratch, why not just do the whole thing from ground up save the auction money to buy the land?

[quote]DrEvil666 wrote:

[quote]DarkNinjaa wrote:
I did this for a while. Bought a house at an auction that was in ruins, fixed everything in there (painting, plumbing, roofing etc…) and resold it. Then bought another one from the auction and did the same. I bought another house last year but haven’t done much with it as I’ve been busy lately and can’t be bothered to focus on it. I could ask some relatives and friends to deal with it but I don’t trust them well enough with my business.

I’m opening my own gym next year and that’s where my money is going to.

Anyway, WHAT IS IT EXACTLY you wanna know?[/quote]

Costs twice as much per sq ft to renovate a place than to build from scratch, why not just do the whole thing from ground up save the auction money to buy the land?
[/quote]

It really depends on the degree of renovation. Paint, swapping out fixtures, updating lighting, upgrading flooring… you can get a lot of return on investment if you know what you’re doing.

But it really depends on the condition and what you’re doing. If the basic infrastructure is sound, finish work can pay off really well.

Of course, sometimes it can make sense to demo and start over.

[quote]LoRez wrote:

[quote]DrEvil666 wrote:

[quote]DarkNinjaa wrote:
I did this for a while. Bought a house at an auction that was in ruins, fixed everything in there (painting, plumbing, roofing etc…) and resold it. Then bought another one from the auction and did the same. I bought another house last year but haven’t done much with it as I’ve been busy lately and can’t be bothered to focus on it. I could ask some relatives and friends to deal with it but I don’t trust them well enough with my business.

I’m opening my own gym next year and that’s where my money is going to.

Anyway, WHAT IS IT EXACTLY you wanna know?[/quote]

Costs twice as much per sq ft to renovate a place than to build from scratch, why not just do the whole thing from ground up save the auction money to buy the land?
[/quote]

It really depends on the degree of renovation. Paint, swapping out fixtures, updating lighting, upgrading flooring… you can get a lot of return on investment if you know what you’re doing.

But it really depends on the condition and what you’re doing. If the basic infrastructure is sound, finish work can pay off really well.

Of course, sometimes it can make sense to demo and start over.[/quote]

Thats really only feasable if the shack is in an epic location, the real estate markets are too efficient and you will pay out the ass for condition ,house flipping is gambling. After real estate fees… And the retarded work you put in… Its not rly worth it in my opinion, yeah you can make good money if youre already in the business, but if your already in the business youll make more doing it from scratch

Leading up to the 2008 crisis, people had this old folksy philosophy of a dollar spent is a dollar earned, so they borrowed money from the bank to upgrade their homes thinking it would make them a killing, well you know what happened next

[quote]DrEvil666 wrote:

Costs twice as much per sq ft to renovate a place than to build from scratch, why not just do the whole thing from ground up save the auction money to buy the land?
[/quote]

The first house was about 20 years old but structurally sound. I didn’t want to demolish it as I wanted to retain the outside features of the house. I spent most of my time focusing on updating the interior really. Second home, I planned to demolish but that wasn’t allowed.

[quote]Ct. Rockula wrote:

You’ll get to be one of the first to see it once it’s done. It’s going to be hardcore.

Lol at your gym being a fitness center with a bowflex and some trx things.

[/quote]

Lol!

You are so wrong, Rock. My gym ain’t going to be no damn fitness centre.

I got HammerStrength machines, up to 200 pounds DBs, tyres, sledgehammers, prowlers, ropes in the plans. It’s going to be sweaty, teary and painful in there. There wont be no Sauna and no Steam room, though I would have loved to make it luxurious.

But I’m hardcore and my gym will be that way.

Once I’m done with it, you’re invited to come train, as well as all my friends( and haters) in here.

Ps: actually don’t think it’s gonna be free. A girl gotta make some money, ya know? That’s how bidness goes.

:slight_smile:

[quote]DrEvil666 wrote:

[quote]Zeppelin795 wrote:
Curious if there are any real estate investors and private lenders out here in T-Nation? Any thoughts from those who have done both? Thanks![/quote]

What do you want to know?

Commercial and ground up contracting different businesses be more specific[/quote]

Just wanted to know if anyone has experience with both purhasing real estate as an investment vs. being a private lender on real estate. Which does one prefer and why? Personally I think being the lender is much better but just wanted some feedback from members. Am I still being too vague?

[quote]DarkNinjaa wrote:

[quote]Ct. Rockula wrote:

You’ll get to be one of the first to see it once it’s done. It’s going to be hardcore.

Lol at your gym being a fitness center with a bowflex and some trx things.

[/quote]

Lol!

You are so wrong, Rock. My gym ain’t going to be no damn fitness centre.

I got HammerStrength machines, up to 200 pounds DBs, tyres, hammer sledges, prowlers, ropes in the plans. It’s going to be sweaty, teary and painful in there. There wont be no Sauna and no Steam room, though I would have loved to make it luxurious.

But I’m hardcore and my gym will be that way.

Once I’m done with it, you’re invited to come train, as well as all my friends( and haters) in here.

Ps: actually don’t think it’s gonna be free. A girl gotta make some money, ya know? That’s how bidness goes.

:)[/quote]

Arent you in France or something?

If i come all the way out there then i better be getting my dick wet too.

[quote]Zeppelin795 wrote:

[quote]DrEvil666 wrote:

[quote]Zeppelin795 wrote:
Curious if there are any real estate investors and private lenders out here in T-Nation? Any thoughts from those who have done both? Thanks![/quote]

What do you want to know?

Commercial and ground up contracting different businesses be more specific[/quote]

Just wanted to know if anyone has experience with both purhasing real estate as an investment vs. being a private lender on real estate. Which does one prefer and why? Personally I think being the lender is much better but just wanted some feedback from members. Am I still being too vague?[/quote]

Sounds to me like you inherited some money recently and have 0 knowledge in finance but are going crazy with real estate and a gym business all of a sudden.

Basically there are two main ways to make money in real estate.

Commercial: apartments, plazas, large shopping centers. The average price per unit vs monthly rent income vs paying back loan to bank, if the rent income from the building is more than bank loan interest you pocket it

Residential: contractor has a few million, or inherits land, and or w,e, buys it from someone in a desiresble localtikn who cant resist the few million, than develops houses, makes huge profit on land value since he is buying in bulk he got a deal, makes 15% profit on building materials, 15% profit on land AT LEAST since he selects knly the cheapest for him to install in peoples houses, and also capitalizes on market forces, all in all its propbably a strong 35% roic(return on invested capital)

I however do not like real estate, i prefer liquid assets, and hedging

Lending and commercial real estate is what the banks do because they have such a huge wad of cash, it makes them cash with no risk although they have a portfolio and are into everything. More money you have the less risk you need to take to make the same amounts or more. Commercial realestate are like dividends, you need some millions to make it worth anything. A unit will cost about 65 grand, and its dividend is a 600$ check every month, much like a stock for example about 37$ a share with a 29 c quarterly dividend, stocks go up with inflation so they are a hedge against it and they grow which is why i prefer them. Also they are rigged and can be manipulated by huge amounts which is why the smart money loves them… They are always using leveraged options… Just insane amounts of money being made

Yes there are troops of people living off interest from inherited wealth who would never dream of having a day job, this is capitalism. well it is the end goal anyways i hate talking about finance but im sure there are alot of mbas on T-Nation

[quote]Ct. Rockula wrote:

Arent you in France or something?

If i come all the way out there then i better be getting my dick wet too.[/quote]

Bring BWG with you or any of your other girl/boyfriends.

We should have an orgy after working out.

[quote]Zeppelin795 wrote:

Just wanted to know if anyone has experience with both purhasing real estate as an investment vs. being a private lender on real estate. Which does one prefer and why? Personally I think being the lender is much better but just wanted some feedback from members. Am I still being too vague?[/quote]

I prefer to buy, change a few stuff around and then resell for a profit. It’s fun to me and I usually like to shift stuff quickly. I always go for the shitty houses, the type peeps won’t even look at twice. Fixing some pipes or a collapsing roof is not that costly to me. I get rid of the mould, splash some paint there and there, add a touch of modern deco, better lights and kitchen equipment and, voila!

I’d made handsome returns with the first two purchases. No plans for the 3rd one yet but I’ve considered letting it after renovations for long term growth. But I’ll see once I’m done with the other projects I’m currently busy with.

[quote]DarkNinjaa wrote:

[quote]Ct. Rockula wrote:

Arent you in France or something?

If i come all the way out there then i better be getting my dick wet too.[/quote]

Bring BWG with you or any of your other girl/boyfriends.

We should have an orgy after working out.[/quote]

Im not ever sharing BWG with anyone EVER.

Im down for the groupsex but we should find some local bodies. I dont want to buy plane tickets and shit for all of them.

[quote]Ct. Rockula wrote:

Im not ever sharing BWG with anyone EVER.

Im down for the groupsex but we should find some local bodies. I dont want to buy plane tickets and shit for all of them.[/quote]

Then bring your other girl/boyfriends. I’ll pay for the plane tickets.

Bring a girl who hates having her tities slapped though. The cries always turn me on.

Shit, what thread is this again?

[quote]DrEvil666 wrote:
all in all its propbably a strong 35% roic(return on invested capital)

[/quote]

Gross margin maybe, but after overhead a 35% gain is a homerun. And now-a-days you have HUD/Affordable Housing issues as well, which bite into your returns. (At least in my area, I don’t think places like Houston have the affordable housing rules and regulations.)

[quote]Zeppelin795 wrote:

Just wanted to know if anyone has experience with both purhasing real estate as an investment vs. being a private lender on real estate. Which does one prefer and why? Personally I think being the lender is much better but just wanted some feedback from members. Am I still being too vague?[/quote]

Z, I can’t say that I have first hand experience but to me it’s a no brainer. Right now is the time to be an investor, NOT a lender. As an investor you can get properties for a low price and at dirt cheap interest rates. You can get loans for under 3 percent which is a life time opportunity. In addition rents are kind of high right now. So, you can buy a house for a low price and pay low interest and charge a lot for rent. Sounds like win.

As a lender, you will only be making 2.75 percent. That’s pitiful.

[quote]DarkNinjaa wrote:

[quote]Ct. Rockula wrote:

Im not ever sharing BWG with anyone EVER.

Im down for the groupsex but we should find some local bodies. I dont want to buy plane tickets and shit for all of them.[/quote]

Then bring your other girl/boyfriends. I’ll pay for the plane tickets.

Bring a girl who hates having her tities slapped though. The cries always turn me on.

Shit, what thread is this again?
[/quote]

I will see what i can find…

And i think this thread is about France or some shit?

[quote]on edge wrote:

[quote]Zeppelin795 wrote:

Just wanted to know if anyone has experience with both purhasing real estate as an investment vs. being a private lender on real estate. Which does one prefer and why? Personally I think being the lender is much better but just wanted some feedback from members. Am I still being too vague?[/quote]

Z, I can’t say that I have first hand experience but to me it’s a no brainer. Right now is the time to be an investor, NOT a lender. As an investor you can get properties for a low price and at dirt cheap interest rates. You can get loans for under 3 percent which is a life time opportunity. In addition rents are kind of high right now. So, you can buy a house for a low price and pay low interest and charge a lot for rent. Sounds like win.

As a lender, you will only be making 2.75 percent. That’s pitiful.[/quote]

No offense but you don’t know what you’re talking about or misunderstand what the OP is talking about. As a hard money lender you can get 10-15% flat rate.

In my state you can only get your name on 4 mortgages, regardless of credit/income/price of the property. There are a lot of professional flippers who fix up houses and re-sell for profit, but due to the time it takes to sell houses / lag times in contracts, they cannot get any more mortgages. In order to get access to more houses, flippers will use private lenders and pay very high interest rates to get the money they need to buy past 4 houses.