Warren Buffet defines “risk” as “losing money.” Combine that with one of a million different quotes (or statistics) out there that basically say, “Nothing has built more wealth in the U.S.A. than real estate.”
So is investing in Bellingham real estate risky? Or to re-phrase that: Does it have to be risky?
If you buy a single family or a triplex or a 16-unit apartment building, with a full feasibility period, seller’s disclosures, financial analysis out the ying-yang, rental histories, 3rd party inspections, property management on board, the works… are you STILL taking a risk — or taking a chance on “losing money?”
I just read this quote: “You should recognize that investing is a program for the long-term building of wealth, and it has little or nothing to do with speculation.” –Frank Gallinelli
“Nothing to do with speculation?” So nothing to do with ‘gambling’ or an ‘unknown outcome’ is what Frank is proposing.
Don’t you just so WANT that to be true? I love investment analysis. I have a packaged software program that I use for my clients to create an APOD — or annual property operating data — and a proforma — or a hypothetical analysis on the property’s future performance with a couple assumptions built in. (None of us have a crystal ball, afterall.)
It spits out a tremendous amount of data that goes way beyond the surface-level ‘gross estimated rents’ which — I might gripe — a tremendous number of agents and sellers seem to use to calculate advertised cap rates in this town. (???)
We see properties in Bellingham that cash flow with less than the non-owner-occupied lender minimum of 20% down. We see properties with years of paid-on-time, no-vacancy rental history. We see non-owner occupied property in Bellingham for sale with a seller (bank)-provided 3.99% 30-year fixed rate mortgage.
As an investor, can you do as Frank suggests and, with proper due diligence, eliminate risk from Bellingham investment real estate? Maybe not with just one unit? Well how many, then?
It may take a while, and a near-infinite amount of research and practice, but I aim to find this answer for my clients and for myself.
