Using money to make more money

[Guest nicemac]

The Apple stock may indeed be a more sure thang than death and taxes, but I recall times in the past when they would be flying high and then suddenly within months on the brink of disaster. Apple's survival for such a long time period has got to be less probable than "lightning strike" odds. Many companies founded about the same time did great and maybe made a few people a bunch of money, now dead, gone, and forgotten.

They have the highest market cap of any company in the world. Their cash reserves alone make them the 53rd largest corporation in the world. Their P/E is 13? The entire market would have to completely fall apart for the stock to fall far. Lots of upside, minimal risk.

[Guest Revelator]

I never found futures to be terribly complex or risky and I never traded stocks first (still haven't). Whatever your market, just do your homework and practice a lot before you go in with real money. It's personal preference I guess. I always liked the leverage of futures, and the stories of the guys in the '70s who made fortunes in commodities.

[1gewehr]

Don't put your money into something you are not intimately familiar with. If you are looking into a side-line business, then do something you know how to do, and can do well. The best investments are investments in your own skills and abilities.

You might look into investing the money on learning a new skill or improving you existing skills.

I have probably spent well over $20,000 of my own money on training and schools over the past thirty years. And that doesn't include all the free classes and seminars I have attended. Manufacturer and vendor seminars can be incredibly useful.

[Guest nicemac]

Don't put your money into something you are not intimately familiar with.

This. x 100!

Whatever you do, study and learn everything you can about it first.

[Guest nicemac]

Whatever your market, just do your homework and practice a lot before you go in with real money.

Good advice.

But I find I always do better with practice money than I do with the real thing. LOL!

[Guest Lester Weevils]

Don't put your money into something you are not intimately familiar with. If you are looking into a side-line business, then do something you know how to do, and can do well. The best investments are investments in your own skills and abilities.

You might look into investing the money on learning a new skill or improving you existing skills.

I have probably spent well over $20,000 of my own money on training and schools over the past thirty years. And that doesn't include all the free classes and seminars I have attended. Manufacturer and vendor seminars can be incredibly useful.

Excellent advice all around.

Maybe I'd have done better intentionally looking for needs and selling solutions. Actual market research and such.

But mainly kinda just bumbled from one endeavor to the other. Usually either get interested in something from personal curiosity, or learn to do something because I was too cheap to pay somebody else. And then people would start offering to pay me to do the same thing for them. Maybe formal training would have been better, but my method was just buy some books and gear and jump in with both feet.

Edited February 8, 2012 by Lester Weevils

[blizzard]

If you can find the right locations, vending machines can turn a nice little profit. Location is the key though. My brother several years ago had a bunch of candy machines. The problems he was running into was repairs. People trying to break into them or putting stuff other than money in them. Also,a few of the business owners saw he was making some money and asked him to pull his machines so they could put their own in.

[bigwakes]

I started investigating property tax auctions. And I dont mean buy some DVD on late night tv. I mean calling surrounding counties to see when and where their tax sale is. Every county has one once or twice per year. I went to the Hickman County sale with $3000 in my pocket just to see what happened. I walked away with 5 acres of raw land for $1500 and 5 acres of land in lyles with a trailer on it that someone is renting. I paid $627 for 5 acres with the trailer. I can't sell or take possession until mid December this year. The trailer property sold for $16000 back in 2006. The original owner still has the right to buy the property back, but they have to give me my expenses plus 10% if they want the property back. We'll see if I make any money or lose $2000.

[Guest Lester Weevils]

I started investigating property tax auctions. And I dont mean buy some DVD on late night tv. I mean calling surrounding counties to see when and where their tax sale is. Every county has one once or twice per year. I went to the Hickman County sale with $3000 in my pocket just to see what happened. I walked away with 5 acres of raw land for $1500 and 5 acres of land in lyles with a trailer on it that someone is renting. I paid $627 for 5 acres with the trailer. I can't sell or take possession until mid December this year. The trailer property sold for $16000 back in 2006. The original owner still has the right to buy the property back, but they have to give me my expenses plus 10% if they want the property back. We'll see if I make any money or lose $2000.

Thanks for the good info!

I had just assumed that hordes of real-estate pros would swamp such auctions and bid up any "bargains" out of reach for a fella with $10,000 in his pocket. Might be worth looking into.

If you buy something seized by the gov for tax reasons, how clear would the title be? Would there be substantial risk of buying a piece of land and also buying a giant stealth bank-note attached to it? Or buying something that eventually turns out to belong to somebody else entirely? Or buying onerous legal obligations from a previous lawsuit? Or buying a previous gov edict that a zillion dollars must be spent immediately to fix some flaw in the property?

Or does the fact of the gov seizure "wipe out" and cut the strings off most previous obligations? Except perhaps items such as previous expensive EPA rulings?

[Guest NYCrulesU]

I would give my left....pinky toe for 5 acres and a trailer for $627. Heck, 5 acres for $1500 is a STEAL.

I will have to look into my county and surrounding counties. Would love some land that cheap to have as a bugout location. Use it as a rental in the meantime.

[analog_kidd]

Tax lien auctions are a great way to get real estate on the cheap, but there are some gotchas. First of all, the current owners, the ones who didn't pay the tax, have a whole year to try and wrangle up the money to pay you back and clear their name. They have to pay you back what you bought it for plus some percentage on top of that. Meanwhile, they get to live in or use the property for that whole year. So, even if you get paid back, you get interest on your money, and it's a win for you.

For land, no problem, but if it's a house you want to use for rentals or for your own residence, they could pretty much destroy it before you legally get to take possession. Even so, if you paid $10,000 for the house, the land is probably going to be worth that, so, you'll probably come out ahead, but it could be frustrating. And getting them to actually move out may involve an officer.

Still, it could be a great investment, if you have the year to wait.

[jeffmem]

Find local storage auctions and buy a few lockers. Sell on craigslist.

[Guest NYCrulesU]

Find local storage auctions and buy a few lockers. Sell on craigslist.

More of a gamble than anything.

The one thing I prefer is....work. Solid work ethic and daily work that produces income.

I could hit the card tables, bet on sports, go shoot pool for $ (I put myself through HS with clothes and stuff by hustling pool) and so on. I prefer not to "gamble" my limited money away.

I would like to find something that involves honest work with limited risk/gamble. I understand there is risk involved with everything. I prefer to limit the risk as much as humanly possible.

So far I am leaning towards vending machines or pressure washing. Pressure washing is at the top of my list.

Edited February 11, 2012 by NYCrulesU

[Guest Lester Weevils]

Tax lien auctions are a great way to get real estate on the cheap, but there are some gotchas. First of all, the current owners, the ones who didn't pay the tax, have a whole year to try and wrangle up the money to pay you back and clear their name. They have to pay you back what you bought it for plus some percentage on top of that. Meanwhile, they get to live in or use the property for that whole year. So, even if you get paid back, you get interest on your money, and it's a win for you.

For land, no problem, but if it's a house you want to use for rentals or for your own residence, they could pretty much destroy it before you legally get to take possession. Even so, if you paid $10,000 for the house, the land is probably going to be worth that, so, you'll probably come out ahead, but it could be frustrating. And getting them to actually move out may involve an officer.

Still, it could be a great investment, if you have the year to wait.

Thanks for the good ideas, analog_kidd

The last few days was trying to think up angles how to benefit from tax sales. Maybe buying run-down properties then turning them over to a decent rental management agency would make a nickel or two if the properties are cheap enough? I'd not likely be inclined to personally go fix up slum properties and personally deal with renters. Am guessing that low-grade housing would cost so much in management fees and maintenance that only slim profit would remain, unless a fellow wanted to do most of the maintenance and rent-collecting and evicting himself. Never checked into it. Just guessing. Maybe guessing wrong.

I'd be more comfortable buying nearby property, within a couple of miles of the house, make it easy to keep an eye on it. Would most likely hire a rental agency regardless. Don't need the headache of dealing with deadbeats, and am told there are deadbeats at all income levels. Pay a pro to deal with deadbeats. Not my area of expertise.

Then again, on the other extreme, unimproved wooded property out in Polk county might be neat. Maybe some of Polk county is ugly as sin, but the parts I've seen are pretty scenery. Would be more inclined to get something like that as either use-it-myself and/or buy-and-hold. Wouldn't have time to try and be a rural slumlord.

====

Last Friday got curous and explored Hamilton county computerized tax sale listings. Records from previous years showed most listings selling at remarkably low prices, from barely 1X over the starting bid, up to sometimes 10X+ over the starting bid. But if the starting bid is $500 then even 10X ain't exactly high finance. Maybe the easiest way to make a buck would be if the previous owner DOES cough up the cash to buy it back within the first year?

Ham Co created a fairly well-done online mapping system making it easy to take a property id from the tax sale and find it on the map, zoom in with aerial imagery turned on, and also do street view. The system is slightly buggy but have seen much worse. Not bad for government work. Generally quite usable.

Anyway, might find time to study it closer. In generalities, from what they have listed at the moment-- Maybe it isn't a final list for this year-- Just an initial impression-- Maybe there are some gold nuggets hidden in there, but the list isn't very big right now. Haven't studied every single property--

Only a few properties have buildings, typically on small lots. Judging by the aerial pictures and street view (which are not detailed enough to get an accurate impression), the buildings don't generally appear in good shape and might be expensive repair even to qualify as legal slum rental. A couple look somewhat better and might not be too expensive to fix up. Some properties have numerous junk automobiles and other assorted old hardware out rusting in the weather.

Perhaps half of the properties appear situated in neighborhoods where one might ideally prefer to visit only in the daytime, wearing battle armor and driving an armored humvee. Maybe some are not really quite that bad though the overall neighborhoods are kinda run-down.

Most properties are small vacant lots between 0.2 and 0.6 acres. The small vacant lots are a puzzle how one could realistically profit except build an inexpensive dwelling to rent out. Some of the small vacant lots are in places that look tolerable to actually live in. Maybe a house-construction contractor could make money on a few of the better lots by putting up a house when he doesn't have anything better to do, whenever the housing market recovers? The more rural lots, one might install a used trailer to rent out?

Was wondering if there would be any reasonable way to squeeze a long term profit with buy-and-hold. Had been thinking for a long time, given that they ain't making any more land, that any land would eventually HAVE to get more valuable if you could buy cheap enough and hold long enough. On the other hand, most of those tax sale lots look like nobody would come begging to buy them anytime soon.

I'm not as short-sighted as decades ago, but may still be too shortsighted to see profit angles here-- When I was 20, mom and dad were BEGGING me to buy a certain 15 acre wooded hillside lot in the valley between Red Bank and Signal Mountain. Can't recall the price, was pretty cheap even when a dollar was worth something. I foolishly did not buy the lot of course, not understanding that the valley would be full-up with apartment complexes within 10 years, rather than woods and pasture. Heck, even if hadn't sold it for handsome profit, it would have been a great place to have a house. Live and learn.

Some of the tiny vacant lots may be ideally situated for a franchise business modeled after the Central Park burger chain. Central Park ran the little postage-stamp drive thru fast food joints-- Some of the tiny lots may be ideal sites for Central Crack drive-thrus. A couple of the other tiny lots may be better suited to Central Meth franchises.

Apologies yet again wasting valuable computer bits. Was thinking out loud in case somebody has innovative ideas how a person could profit from really cheap postage-stamp vacant lots in unremarkable locations.

Edited February 11, 2012 by Lester Weevils

[bigwakes]

The auction I went to had about 150 properties go up on tue date of the sale. Most of the best properties I scoped out were paid off prior to the date of the sale. There was a house owned by a person with a California address that sold for $27000. That house had a tax assessment of $125000. Not a bad snag if it holds up. I suggest going by every property you are looking at. There were several that looked great on paper and arial view, but were pretty trashed when you pulled up. It was my first sale and I wasn't very organized. I'm hoping to clear $10-12000 for both properties early next year when the deeds come in. There are some risks, but if the bank has a note on the property they have the same rights to the property as the owner. If the bank doesn't pay the note within a year of the sale they now have an unsecured loan with the previous owner. I spoke to a person at the assessors office that said most real estate has the taxes paid by the lean holder so their property doesn't get sold at auction.

I just went to see how things work and took the cash just to see what would happen. my wife was shocked I came home with anything.

[plank white]

build a couple small storage buildings and rent them out

[Guest lostpass]

We've been looking into buying a laundry mat or self serve car wash. Minimal time and, if you have that right location, you can make decent money. You won't get rich but you'll get by and have left over to do other things.

If I was going to start up a service type business I wouldn't go with pressure washing, I hate doing that. I'd go with auto detailing. Get really good at it and only do the higher end cars. The initial investment is minimal and people like clean cars.

[Guest jackdm3]

I had more than the allowance suggested for this $5,000 query, but the principles work just the same.

On my first flip, I didn't use a broker, a newspaper or any other source to find my target house. I drove. I drove my ass off street by street looking at houses, so slow that you'd think I was casing the area. Looking for houses that seemed to have been forgotten. Wrote them down and looked them up on our tax assessor's site. Entered the addresses and hoped for the mailing address to NOT be the address in question. From that, I knew it was a secondary home/investment. Mailed a letter to each prospect telling them I was looking to buy a house in that area and wondering if they still wanted it. The home's owner in question lived across town and the house was left to him and his 2 siblings and the house had been empty for over a year.

So we met up to look at the inside. I told him I'd call back. Waited 2 or 3 days. Called to ask him what he wanted for it.

"$72,000"

(intentional pause) "MAN! That's out of my budget. I just can't. Good luck with it, though. Bye."

I waited a whole month to let him think it out. Called him back.

"You still wanting to sell?"

"Sure."

"What are you thinking?"

"$70?"

"I just can't. Sorry. Good luck with it."

"Well, how much CAN you offer?"

" .................. I can probably make it work with $58 and have money left to do the work."

" (sigh) ... OK. Let's do this."

"Thank you. I'd like to start working on it now."

"I can't let you inside the house till I see some serious paperwork/money."

"That's fine. I'll start painting the outside while the atty does the papers."

Everybody flipped out. Mom said, "You're gonna paint this man's house? With no papers or guarantees that you'll get anything out of this?"

"Hell, yes. It's just paint that I had left over from painting an office. I've already got all the tools/materials. It's just my time and I'm on a clock to finish this and sell before the nasty Winter."

My ability to borrow from a bank I'd never heard of before was based on me having equity. Look around. People usually have juwt a little bit more equity than they realize. I had my house, though I still owed, nice paid-for truck and investments. If I defaulted on the short term loan, they'd simply take it back plus a small amount for the trouble ($3K or $3.5K?). They gave him the $58K. I put $12K in for materials. Stripped out the carpet. Refinished the hardwood floors throughout, minus kitchen and bath, repainted everything, new lighting and installed an entirely new kitchen. Had a pro install a totally new air system. When I had finished, the buyer's inspector only asked me to fix 4 things. That's practically unheard of! I know how to work on houses. It's what I do, still. And I knew my abilities and proceeded with no fear.

You'll have to know your deal, too, to make it work or you'll spend time and $ learning your trade. Learning the hard way is expensive.

I KNOW. I KNOW. The challenge for this thread was to work with less money. My point is that, in regards to real estate and its recent cheapness and deals, you CAN find something in your area on a smaller scale and make it work. My selling agent was "shocked" when they delivered the check on the first flip. Just over $37,000. My agent said, "You don't understand. First time flippers don't usually make this much." Quietly thinking to myself, "if I'd have used an agent to find that house, I'd have never gotten anywhere near that profit margin!"

Start small. Do what you know. You'll be happy.

Edited February 14, 2012 by jackdm3

[strickj]

We've been looking into buying a laundry mat or self serve car wash. Minimal time and, if you have that right location, you can make decent money. You won't get rich but you'll get by and have left over to do other things.

If I was going to start up a service type business I wouldn't go with pressure washing, I hate doing that. I'd go with auto detailing. Get really good at it and only do the higher end cars. The initial investment is minimal and people like clean cars.

Self serve car washes are going away and are being replaced by the $3 automatic assembly line type places..

PM me if you're truly interested