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Updated over 10 years ago on . Most recent reply
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True value of property
Advice that Brandon Turner gives is buy properties at 20 percent below their value. Unless an appraisal has been recently performed, how do you know what the true value of the property is? Is this based on comparable? Are you going to have to give a "low ball" offer to get a 20 percent discount?
Most Popular Reply
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Dev, the issue is that most of the newbies DO NOT know something others don't. Hell, how many, "I want to get started in REI/Wholesaling!!!" from people with no real estate experience, no life experience, and no money. Hell, even the people the are buying from at least have the experience of buying a house once, and probably getting a mortgage, making repairs, etc.
Whereas it is entirely possible, buying off the MLS and working with a good agent, to buy a property that may not return huge amounts, but will be solid, cash flow some small amount while paying its debt service, and provide that new investor with experience.
In the unlikely event that one of these new investors had the money to close on an off-market property needing rehab, what are the chances that they will correctly estimate the current value, ARV, rehab costs, project length? What are the chances they will successfully manage the rehab, select appropriate contractors, budget adequately?
More likely, they'll lose their shirt.
Nothing wrong with hitting a single your first time at bat in the big leagues. It doesn't need to be a grand slam.