Updated almost 8 years ago on . Most recent reply
Lesson Learned with almost first purchased
Lesson learned: Found what appeared to be a duplex by driving around looking for something else. Researched the property and it was for sale. Listed price, $53k. I ran comps for the area. SFH's were selling for $110K & higher in that area. The nearest duplex was too far away but still had a high resale value. The median for rents were about $900-$1000 for a 2bedroom. I estimated $20k in repairs and had a GC who I hoped would give me more of a better estimate since he has a lot more experience than I do. I called up hard money lenders & was told no since I had no experience or they didn't deal w/ duplexes. I wanted to buy & hold this place. I ended up finding a seasoned partner. He examined the place w/ me and determined it would cost about $40k to fix the place (foundation damage & other things) and I was able to get the purchase price down to $48k. He suggested I walk away from it and so I did. The house was selling as-is. Thank God I did have in my contract purchase agreement would be based upon me being approved for a loan and I was not.
Lesson learned: 1) I had an exit strategy. 2) Make sure the GC has experience w/ estimates and not just experience w/ their hourly cost. 3) It benefitted me attending more than one local REIA association. 4) The experience was priceless.
Most Popular Reply
I am very happy you learned some valuable lessons without any real money being lost. I realize with real estate investing, you can't just be reading the blogs and forums day and night but never take that leap of faith.
You really just have to do it and start learning along as you go. In the process you meet experts who have been around the block and can give you some great insights.
So again, really happy for you and happy investing.