Getting In The Game

[Mark S.]

I've been on BP for a while. I've listened to every single podcast, (used to be a lot more) active on the forums, attended a couple of webinars, read several books (reading Millionaire Real Estate Investor by Gary Keller right now), and have used the Rental Property Analysis Tool numerous times to evaluate deals. I'll admit I've basically sat out this past year when it comes to real estate investing and was focused on other things. I'm not getting any younger and know I need to get in the game. I found a property that COULD make a decent rental, but it definitely needs work (new floors, new windows, updated kitchen and bathroom, etc.). I walked the house with my realtor this morning. Neither one of us are any good at estimating what it would take to rehab it, and without an inspection, I'm sure there are other things we're missing. The area seems great, it's right off a main road that connects two larger towns (one has good jobs, the other not so much). I think I'm more excited about getting started than I am about the actual property. I'm considering making an offer and almost using this as a learning experience if it doesn't go well, but I'm not sure that's the best move. Since it's a low priced SFR instead of a multi, one thing that makes me feel a little better is that one possible exit strategy is always to try to sell to an owner-occupant buyer. Ideally, I'd like to have it as a buy-and-hold rental. To me, this poses less risk than a more expensive multi-family tha I would more than likely only be able to sell to another investor. Any thoughts?

[Yaw Asante]

I don't particularly think that an inspection is the right way to go at this stage. The guidance about finding a contractor who can list out what needs to be done at a high level is a good one. They can also give you a free estimate. My experience with inspectors is that because they want to CYA (cover their ***) they tend to say more is wrong that actually is.

Note also that the realtor may not necessarily be on your side as the more you pay the more they get in commissions. My 2 cents - When you reach a value that is reasonable, drop that amount by 15 - 20% and make your offer. Then go and hide till the next day and watch as negotiations begin