reading,pa property help

[Marc Oister]

hi everyone. Im new to bp and have already found a wealth of information on here. I have been interested in the reading,pa market for some time now and would like some insight on my current dilemma. I am from pottstown and spend a lot of time in the city of reading so i know the city well.  Everything i have read says to stay away from some of the less desireable areas of the city but i was figuring it cant be as big a nightmare as everyone states.  I have run into a property on the south side of reading off of cotton st.  I have friends that live two blocks away so i know the reputation but the property is a 5br 1bath for 17k which has been newly rehabbed and the owner needs to free up some money.  It would be a cash deal and this would be my first property. I figured with the price and condition of the house along with the instant equity it would put me in a start to real estate investing. Any insight would be greatly appreciated before i pull the trigger on the deal.

[Mitch Messer]

Hi @Marc Oister! Congrats on taking the all-important step of looking at an actual deal. It may not seem like it, but looking at (lots of) deals is the key to becoming a better investor!

That said, here are some questions/concerns that immediately popped into my head:

• What is the market value of this property? How do you know you'll have "instant equity?"
• Just because the seller wants all cash doesn't mean you have to go that route. Why not consider a terms offer?
• Are 5/1 homes common in that area? That layout makes me wonder whether keeping tenants will be a problem. Assuming no doubling-up, I don't see five people being happy sharing one bathroom for very long.
• Is the property vacant? If so, for how long? Did this owner ever have tenants?
• Given the low asking price, it sounds like the owner may have started a rehab project and then run out of money. Be extra careful to ensure that the work done was of high quality.

The point is that there is always a story involving any seller and any property. Be sure you learn what it is before you plunk down your funds, rather than after!

Good luck!