Newbie working in Columbus Ohio

[Donna Smith]

Hi my name is Donna Smith and I am a single mum with a 6 year old daughter living on the Gold Coast, Australia. I am looking to make the future a bit more secure for my daughter and myself by getting into real estate investing.  I have been unemployed for the past 10 months but I have just found part time work as a book keeper which will greatly help to pay the bills.

I have recently completed 2 real estate courses in Australia and attended a 3rd in Las Vegas, NV.  I have gotten into land banking and property trust deeds to start with and now I am wanting to find cash investors to work with me in wholesaling property in Columbus Ohio.

This whole process is a bit daunting but I am willing to stick it out to see where it takes me.

[Jamie DeRossett]

Hello Donna it is great to hear from you and you have done a very smart thing by posting your thoughts online.  I am going to try and help you save your time and money. I am a seasoned real estate professional and a seasoned real estate investor that has alot of successful experience in local investing.  You did not reveal your intentions to rent or fix and flip, but trying to do any investing online is a very bad idea that will end in you losing your money.  Any seasoned investor will tell you the number 1 most important factor when investing in real estate is you must know the market intimately.  The overwhelming majority of successful investors live where they invest because they either know or learn the market.  You cannot be a successful investor without a handle on market values both before and after renovation.  Number 2 on the list is you must be able to identify deffered maintenance and items in need of modernazation.  Those 2 items with determine if the property is a good investment or not.  It would be very difficult to do this with a ocean between you and the property.  

Investing has become very competitive in Lexington. So, I have been buying and selling properties in the surrounding counties.  The property I am finishing this week is 20 miles away.  That does not sound like a long distance, but it has been more of a headache that I anticipated.  I am at the property at least 3 times a week checking contractors work, delivering materials, and making sure everything stays on schedule.   This is a must for the average investor.  Plus I have the best contractors that work at great prices.  My labor is about 50% of typical costs.  If I paid market for the roof, windows, floor coverings, paint, kitchen remodel, bath remodel I would never make any money.  These costs have to be as low as possible and the work done as quickly as possible and I have to be there to be on top of it.

It seems as though you have been mislead in your real estate courses.  Real estate investing is a tough competative business.  If anyone tells you your just goning to go out there and find cheap properties and rent or sell for big profits with no market knowledge or experience they are not being honest and trying to take your money in the form of useless information and wasted class time.  For every profitable house there are many seasoned investors trying to buy it.  So, you are going to be competing with the best of the best in Columbus that is all that makes in this business.  It is by no means a get rich quick oppurturnity and the overwhelming majority of people never make it past the first deal and it takes years of experience and actual work to have a profitable business.

Your only chance of success in my opinion is to team up with a local guru and be an investor if that is possible.  But this is risky too because every investor claims to do 5 deals a month, but the reality is that dont do 1 a lifetime and the first is many times the last. 

Things the classes don't teach you:

1. Real estate commisions take a big chunk of change out of each deal.

2. If you have to get a mortgage closing cost are 2-3%.

3.Before buying any properties call some local contractors and determine repair costs for roofing, windows, flooring, painting, demo, clean-up, decks or patios.  These are just typical repairs you are in big trouble if there is foundation issues or mold and this is just a short list.  After you see how much remodeling costs are you will see the property is not as good of deal as you think and all the homes you are looking at(reos, short sales, estates) distressed properties will all have deferrd maintenance

4. Buy it for $50,000 put $20,000 in it and sell it for $100,000.  This is fantasy land.  Each property is unique and must be valued on condition and after rehab value.

I know this is alot, but it is the truth.  Unlike the gurus that are selling you information i have no vested interest in this post and am only letting you know the truth which very few people are successful real estate investors and chances of being successful from an ocean away is very very low.  I estimate 0-1%.  

Every market has opportunity even Australia.  High price properties does not rule out investing.  Successful investors get started every day in high price markets like New York City and Los Angelos.  Thats where the big money is and they get started with no money.  My advice to you is learn your local market.  Try to network with successful investors in your state or region and this will get a much better chance of success. I hope this information is helpful and saves you from the nightmare that awaits from investing from an ocean away.