Creative strategy in today’s market

[Coua Lee]

With today’s challenging market and a newbie in real estate investing, I wanted to start my search initially finding a single unit where I can rent out rooms or find a multi family however I’ve often come across good deals in good locations that are overly price. There one house that’s going for $299,000 but probably needs 80-100k work, I guess you can say it’s a gut job but it’s 5 mins from a prestige university and in an extremely appreciating neighborhood. Houses in the same area are going between 400-500k. Would you consider a deal like this or bring in a partner to put the down payment in? Let me know what kind of strategy I should explore in this kind of crazy market.  

Thanks! 

[Jaron Walling]

@Coua Lee I love the excitement and ambition for real estate investing. The harsh reality is in today's market if that property was a good deal it would already be pending. Great deals have been hard to find and the majority are off market. If it's listed on the MLS even faster. Very few stones unturned on listed properties. If it's a full gut renovation it probably won't qualify for a conventional loan. Can't answer that without pictures.

If you're new to investing I'd continue market research and learn as much as possible. Purchase an easier deal, build skills, gain experience, and connect with local investors. That's how you build relationships and find partners following a similar strategy. Never stop learning. 

[Jonathan Greene]

Don't even think about making an offer yet, you aren't close to ready. You are saying the deals are all bad (they aren't, the market is just hot), but then interested in a gut job and a new investor? This is literally the blueprint to failure and losing all of your money. Why would a partner come partner with you, a brand new investor, on a gut reno that is on the market? What value are you adding there? Spend much more time learning and reading before thinking about buying. Too many new investors get so eager to get in the game, they buy something bad and lose it all before they even start.

[Drew Cheezum]

@Coua Lee congrats on starting your investing career! It is difficult to determine if something is a good deal simply by what it's priced at and what comps are going for. You'll want to consider what potential income from the property is, how much could it appreciate/why is the area appreciating. If you are considering bringing a partner on, you will want all of your ducks in a row.

It's important to have a team in place to help you digest deals and determine if they are "good" or "bad". Any solid investment team has a contractor, lender, Realtor/Broker, and property manager that you can trust to give you hard facts. I'd start by finding an agent/broker that is investor-friendly in the area you are searching, they typically have connections to all other members of your "team" and some investor-focused Realtors spend a solid chunk of time finding off-market deals to send to clients. Good luck!!