Real Estate Investment

So, I am about to take a very big step this week closer to the point of no return when it comes to real estate investing. I had briefly considered doing it a couple years ago when an investor bought the house next door with a group of people, but that group was doing flipping, buying and selling houses within months in a very speculative market. I looked into it a little but it sounded very risky and the stakes were just too high in my very expensive housing market. Fast forward a couple years to October of this year. At work, a friend of mine recommended and lent me Robert Kiyosaki's book "Rich Dad, Poor Dad". It talks about various topics, some of which was financial advice that I already, some of which was old advice emphasized in a new way, some of which was new to me. He spoke of real estate as being a great basis for long-term wealth, and had a lot of figures to back it up. I looked more into it, and bought a few books myself, the best of them being "Real Estate Investing for Dummies". Another excellent one was "What Every Real Estate Investor Needs to Know about Cash Flow". I'm still reading that one.

I decided I needed to get started, but I needed to find a good place to do it. My options were fairly limited. I needed to either do it locally, or someplace where I had connections and felt comfortable with. That meant either the DC area where I live, Asheville, NC where my parents retired to, or upstate NY where I am originally from. Housing prices are very high in this area compared to rents. I would barely even be able to afford a down payment on one small property with the home equity line of credit that I got, and even then I would probably not even break even on rents because of the high mortgage payment. Asheville prices are more reasonable, but even there it looked like the ratio was not very favorable and the city's growth has been more recent, so the most desirable properties were again very expensive because they were quite new, so I went with upstate NY. Yes, I won't get a lot of appreciation in that market on the property, however because the mortgage/rent ratio is so favorable, it gives me a great opportunity to pay off the HELOC as soon as possible and buy more property.

I got my team together, a realtor, a property manager, a mortgage broker, a lawyer, and an accountant. All of them are in NY except my accountant who is local. I've identified the properties that look like they will give me the best cash flow, and on Thursday I will be flying up there to take a look at them. I plan on buying two initially and then deciding my next move in a few years when I pay off the HELOC. We'll see how it goes!

The election. Ah, yes. I helped elect Jim Webb and put the Democrats over the top in the Senate. I was ecstatic, needless to say. I thought Allen would somehow pull it out, but he did not! The same went for Talent in MO who was beaten by McCaskill. As for the House races, it looks at this time like there will be 31 total seats picked up by Democrats, more than my prediction of 19-23, and right in the 30-36 range that Stuart Rothenberg guessed. Governorships, I was dead on. The total was a gain of 6 for Democrats. Now I hope we can prove in the next couple years that people were correct to give control back to us. Social conservatism has hit the high water mark for the foreseeable future, and not a moment too soon. Of course, I think that it was already heading toward that end well over a year ago, but the people didn't get a chance to voice it much until now. All of the stupid moves that Republicans have pulled in the last couple years, Schiavo, Katrina, "stay the course", various scandals, finally came home to roost. Now it's time to prove that we Democrats can do a better job! Obama in '08? Has a ring to it, but honestly, I could live with McCain or Giuliani as president, and they are the Republican front-runners, so maybe it's win-win? We'll see!