Expert: Mike Fortunato - 7/18/2009

Question
Dear Expert

    I never owned property before. I just have been using master card for over 15 years. I know I have good credit because I was never negligent on paying my bills or my monthly rent checks, and I never had any debt problems because I am a money saver. I do not know my credit score, for I never applied to purchase any house or property before. I think my score is fine. The U.S. Department of Defense had to check my credit in order to grant me my security clearance, which I was qualified to receive. If I buy something, I will be first time property buyer. At this time I am working overseas.  I do not know when I am going back to the states because it is up to the company that I work for, but I can have up to 2 weeks vacation time every year, so I can make a trip for one week or two to visit every year.

    I am 33 years old single financial security seeker, who likes to plan to build a solid financial future before starting a family. I want to transform some old limiting patterns and choose new and more creative options. When I return to America, I will be going back to my mother's house located in Michigan. Before or after my arrival to the states, I will need to embark on something different to start moving forward and get settled. I will need to do something that can provide me with stable income, but I do not feel comfortable to buy property.  My mother bought a ranch house 15 years ago for $144,000. She spent another $12,000 for basement remodeling and she was trying to sell this house for the past 8 years, but she still cannot get any buyers even after reducing her original price to $120 thousand; however, if my project can generate nice profit, I might consider doing one of the following ideas:   

    Renting or buying a ranch house and finding some roommates who can help me with expenses, or getting a duplex home and living in first floor while putting other tenants upstairs, so I can receive monthly rent from them, or buying a property and putting it under section 8, or condo, or motel, or apartment building, or any other idea that can guarantee a successful and stable monthly income flow. I also like to invest in real estate and stock market, but I do not have any experience in all of these projects.

    Is there will be a big difference whether I start the project next year versus if I start it 2 or 3 or 5 years from now? Is the difference advantage or disadvantage?  I do not have a specific area in mind, but I will need an area where it can help me generate profit as soon as this project is ready for work. Please send me any ideas you may have, so we can think together to produce good results.

Thanks for being a volunteer to help.

Answer
You'll need to refine your goals a bit more before I can comment further, but overall your plan is sound. Real estate investment is normally a very good idea -- with the understanding that it should be viewed as a long term investment. The key is to buy wisely, in terms of pricing, location, and condition. Starting now versus 3 to 5 years is anyone's guess, but at the moment, there's never been a better time to buy (extremely low prices, and very low interest rates make it a perfect storm for buyers like yourself). So, once you identify a geographic area you're interested in, then my advice would be to hire a knowledgeable local real estate broker. At the same time, you want to educate yourself (lots of info in libraries and on the Internet). Good luck!