Is this a deal?

Question

Property Features 
            Single Family Property
            Status: Active 
            Year Built: 1930 
            2 total bedroom(s)
             1 total bath(s) 
            1 total full bath(s) 
            Approximately 572 sq. ft. 
            Single story
             Exterior construction: Vinyl Siding 
            Approximate lot is 30x106 
            Approximately 0.07 acre(s) 
            Lot size is less than 1/2 acre

----how do you determine its Full market value.
            according to my citys online assement rolls system its FMV is 35,500
            -i check it with homes in that area and their recent sales and it seems accurate.
            - they want 10,000k although it was sold to citimortgage a few months ago for approx. 20k

Matthew Green · Answer

thanks, i'll look into a different credit card. thanks for all your help.

Chris L. · Answer

Matthew,
Knowing that you will be leaving for basic training, tech school, and then a follow on assignment makes a tremedous difference on how you should approach this.
First, what real estate course are you taking?
Second, you have the right approach to study, study, study.  
I am gathering that you graduated a semester early from High School.
Are you working a job at present?
Knowing that you are leaving in the next 6 months, I would recommend the following:
1.  Study, study, study.  (sounds like you are already doing that)
2.  Save every penny you can by keeping your expenses low.  Although there are some out there who have figured out how to do this with no money, I have found it easier to have assets to get started.
3.  I would put an ad on craigslist for your area looking for an investor that is currently acquiring homes that would be willing to let you tag along while they preview homes.  That way, you are not requiring someone to go out when there is not much chance of you actually buying a property.  I know that I would be happy to let you tag along if you were in my area.
4.  I would recommend extreme caution about getting anything started that you could not have finalized before leaving.  You will have no time in basic and very little time in tech school to devote to keeping track of any unfinished business.

Once again, I applaud your enthusiasm and effort.

Matthew Green · Answer

I take an agent licensing course right now. Its online so i go at my own pace. And yes im working part time usually 3-4 days aweek, whichl leaves plenty of time to study and get to know my city better. I also save the majority of cash i make and keep it in a savings account with a 3.5 Interest rate. However i do spend alittle to try and build my credit up.  Im going to put an AD on craiglist tonight ! additionally, i've seen its common to start off wholesaling. So would it be a bad idea to start building a buyers list ?

Chris L. · Answer

Matthew,
I do not have experience wholesaling but there are plenty on the site who have so you can check with them.
Wholesaling would not be a problem to leave while you are away at basic & tech school.  Always a good idea to have a buyers list.
As far as spending goes, do not spend on unnecessary items just to build your credit.  I would recommend that you run all of your required expenses through a cash back credit card but only if you pay the balance in full every month.  In fact, most cards will allow you to set up to pay the balance in full from your checking account on the due date.  I do that with all of my cards.  We probably get $600-700 back per year without spending a penny on credit card interest.  You should not be spending anywhere near that amount to get those kind of rewards.
You have a bright future in front of you.
Keep up the positive thinking!

Matthew Green · Answer

okay thanks jon, you continue to be really helpful!

I know the rent for that area runs between 600-700 dollars. (i live about 5 mins away)
However i'm not sure at all what it could be resold for. houses in that are typically run between 35k-40k.

Although im not serious right now about buying property, it would be a good idea to examine the numbers and go through the properties?

Jon Holdman · Answer

Matthew,
You need to know what the selling price and the rent would be before you can determine whether or not its a deal.  You'll also need to know what work is needed.

Rents can be found by driving the area and looking for for-rent signs.  Call the numbers.  Look in the local paper.  Look on craigslist if that's active in your area.

For the price, again, best to drive the area and look for other houses for sale.  Get information about recent sales.  Zillow can be useful for comps (not value).  An agent can get you info from the MLS.  County records are good in some places as is a title company.   Really, there's no substitute for looking at a lot of houses in an area.

Repairs require some knowledge of construction.  You can get an idea by going through the property with a knowledgable person.  An agent may be able to give you input on what they think needs to be done.  Contractors can give you estimates.  After you look at enough houses in the same area, you'll get a good idea of what it should look like.

Matthew Green · Answer

Hi Chris,

My hometown is Niagara Falls and i'm not technically in the Air Force. I'm Scheduled to leave in September for basic training. I decided to finish my real estate course before i leave. Im thrilled to be going!
As of right now ill be specializing in HVAC which i think will transfer well into my real estate career  when i embark on it. With this house i dont think it would make much sense to fix it sense the profit of margin is very small. however it would be a good learning experience , yet a risk. Unfortunately the nearest REI club is in Syracuse. I know a few real estate brokers and agents and they werent able to locate one. Developing a club would be one of my first objectives when i start considering there are so many benefits of being in one.

Currently, i bought discounted books from gary keller and i have a few rich dad poor dad books. I'm sstarting to read them ASAP, and am gonna continue reading until i feel as though i fully understand the topics/strategies. 
As you can tell, im not going into real estate by force, its been a lifelong passion and i intend to make a career of it.

Thanks and looking forward to your reply.

Chris L. · Answer

Matthew,
I enjoy your enthusiasm to learn.
The FMV is ultimately determined by what someone is willing to pay for a property.  
To determine whether or not this is a good deal depends on what you intend to do with the property and the condition.
I have walked through numerous homes and written NFF on the sheet-meaning Not For Free!
Would you intend to try to wholesale this property or fix and keep for a rental or flip it to another investor?
I have several more questions for you:
1.  Are you from that area?
2.  I am only familiar with a reserve unit at Niagra, are you in the reserves or active duty?  Are you full time or part time?
These questions are intended to give me an understanding of your status so I can give you some better feedback.

I have some generic advice for you:
1.  Go to the library and read everything that you can for free.
2.  Avoid using your seed money for training materials that you can get for free.
3.  I have enjoyed the Rich Dad series for big picture thoughts and motivation.  Not a lot of specifics in the books though.
4.  Find a local Real Estate investing group and attend meetings there.
5.  The key to knowing a good deal is to get out and look.  When you have walked through 100 houses, you will know which one is the best.

I look forward to watching and hearing about your progress.