Investing for the long run

[PipeDope]

The basics, I'm 22, I own a sub-contracting business in the oilfield making around 200,000$ a year. I don't have much time off and I sleep away from the house when I work. I was wanting to get into real estate. Buy a house and rent it out until it's paid off, take a loan against the equity on that house and buy another, do the same until I have more than I could handle. I know this takes a lot of time and effort but I could pay a family member for any maintenance issues on the house. My home town is around 5,000 people strong and there is never any rent houses that stay on the market long. Is there any advice one could give on this? Am I getting too far ahead of myself?

 

[dasein]

Sounds like a plan. Just make sure that the small town is not overly dependent on one plant, mill or industry (or a few), standalone on its own even if large employers withdraw. Are there larger population areas close enough to you to invest in? 5,000 population is kind of risky without more context. Good luck.

 

[speed dawg]

The basics, I'm 22, I own a sub-contracting business in the oilfield making around 200,000$ a year.

If this is true, pay for your houses in cash. You could theoretically buy a 200K house outright in 2 years if you saved half your income. Why are you wanting to take out loans?

 

[Tenacity]

speed dawg,

Because taking out loans allows you to leverage/manage cashflow, rather than putting all of your liquid cash into a property (in which you can't get it out of).

To to OP, I wouldn't jump into Real Estate Investing just like that without any experience. Do some side work under a Real Estate Developer/Investor, while also learn the industry on the side. Give yourself 2 years for the learning curve, then consider the investment or putting your money into other ventures such as:

- A business (I recommend you do this because you have more calculated control)

- Stocks, Bonds, Mutual Funds

- Treasuries, CDs, Money Markets, Annuities

- Alternative Investments such as business cashflows, offshore investing, hedge funds, start-up venture capital, etc

 

[fuerdai]

You are a very strong-minded girl，I wish you good luck！

 

[Bible_Belt]

Lower-priced units return a higher percentage on your investment. It's common to convert an old house into a duplex. Where I live, a $10,000 trailer and a $50,000 house rent for about the same monthly amount. I'd rather have twenty trailers bringing in $500 a month each than I would a $200,000 house bringing in $1500 a month. You'd have enough revenue to pay for a full-time maintenance man.

 

[AAAgent]

speed dawg,

Because taking out loans allows you to leverage/manage cashflow, rather than putting all of your liquid cash into a property (in which you can't get it out of).

To to OP, I wouldn't jump into Real Estate Investing just like that without any experience. Do some side work under a Real Estate Developer/Investor, while also learn the industry on the side. Give yourself 2 years for the learning curve, then consider the investment or putting your money into other ventures such as:

- A business (I recommend you do this because you have more calculated control)

- Stocks, Bonds, Mutual Funds

- Treasuries, CDs, Money Markets, Annuities

- Alternative Investments such as business cashflows, offshore investing, hedge funds, start-up venture capital, etc

definitely recommend this. There's 2 types of people that i've come across that make good money. The type that takes their money and makes it earn them more money. These people end up wealthy and rich. Then there's the latter type that dabbles in things they don't understand and spends the majority of the money they make. Many end up broke but some do end up with some assets but aren't as wealthy/rich as they could have been (my dad is one of these).

I would hire a financial advisor/PWM if you get into the 100k+ range and see what they can provide you as alternative investment options. their jobs are solely to take your money and make it grow depending on your risk levels.