We are all saying now is the time to buy. But buy what ? I work with a lot of first time investors. So here is how I think about it.
First of all a first time investor is someone who maybe already owns their home and is looking to invest some money in real estate OTHER than their home investment.
I apply the sleep test. If you have this investment do you worry about or do you sleep well knowing you can make the payments. I always believe the investor should feel comfortable with his decision. As an example there is a super program here where you put 10 percent down on land and can hold it for 2 years without one payment. The developer is fronting the costs. Now you might think great I can buy 3 or 4 lots. But I advise against this just in case you cannot sell them and have to suddenly carry the payments. Sound familiar to those in the Florida condo market and elsewhere !!!
I also advise for the modest investor Land as opposed to buildings. The carrying costs are low . Now it is true you do not have the rental income, but on the other hand you do not have to worry about renters.
I would be very interested in learning how others feel about the first time investor and how they advise them.
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