Help on property investment

[Drew Simpson]

I just want to say i’m a complete novice and new to this. I’m expecting some type of criticism for not understanding or maybe l do. I’ve always heard of people flipping houses & know of family friends who own a decent amount of real estate. Now lm looking into this one property and maybe totally confused but it seems like such a win win.

I found this Forclosed property on Hubzu.com for $549,000 asking price.

5 bedroom/4 bath

5,450sqft

.5 Acres

Backyard lake

Located in South Florida. Looks gorgeous. May need some work looking at pictures not much.

Anyhow I was looking at homes renting in the area for an idea and found a 4 bedroom/5 bath 3,500 sqft renting for $11,000 that last sold for $780,000.. The general renting price in the area is around $7,000-12,000.

So let’s say l put 20% down on this house for $110,000 with a 30 year fixed mortgage. Paying around $4,000 a month knowing obviously i’m not gonna mortgage it that long. Put around $20,000 into it. Rent it out for a minimum of $9,000. That is $108,000 a year. It take around 4 years to pay off the remaining $450,000 of the house or not? I could then sell it or now rent it out for profit?

So l invested $130,000 +/- for a return in 4 years.

I know that doesn’t include other small fees & factors but it’s just a rough estimate..

Again if l sound like a complete idiot i’ll go ahead and delete it but if so someone please explain what i’m missing?

[Jonathan Greene]

You are a complete novice and you want to spend 550k on a Hubzu auction where you will pay a 5-10% premium on top and have no allowance for repairs or requests? You also want to do it 3 hours from where you live and count on it renting for 7k? I would delete this and start over. What is the point of doing this? You don't know what you are doing and you are like Dave Kingman hoping for a homer, but batting .207 with 87 strikeouts in 200 at-bats. Stop looking for foreclosure deals, most of them on Hubzu will be cash only or those will be the only offers that win. If you don't dial down what you are looking to do as a novice, you are going to sink a bunch of cash into the Everglades.