Real Estate Deal Analysis & Advice
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 14 years ago on . Most recent reply
My REO purchase - Will you be onboard
Hi,
Just few moments back I posted a REO question where I got very sound advises. I would like to share with you another thing about this which is slightly nagging me due to my first REO(investment too). This is a duplex which was bought five years back for 55k. Right now at a REO status it is at 25. I have not yet got the inspection of the heating, plumbing etc. However otherwise there are few things to rehab like the kitchen appliances, one room carpet and some paintings. I was told that it was an investment property for some investor that went bust. Now my question to you is that would you buy such a property at a good price knowing that previous investor went bust. In other words my fear is if I cannot rent these two units then I have to pay everything from my pocket which will be a tough sitution for me. How would you research if these will rent and bring money. I know that in a previous post I was advised to look around for rent signs in the neighbourhood. Is there any other way I can research here to have some idea that the duplexes will rent. They are in decent (I would say good) condition after taking care of all the list of issues that is found out in inspection. Your advise will be a big help to my first venture in first realty investment. I hate to spooked in my first try.
Thanks.
Most Popular Reply
Jack,
All the properties in foreclosure right now were owned by owner-occupant or an investor at some point. Just because they went bust, doesn't necessarily mean that it's a bad deal. The investor in this case could have underestimated the operating expenses, didn't have any reserves and went bust with a big expense.
As far as getting more information on the rental market is concerned, look for for-rent signs, call craigslist ad and ask the property manager or landlord how long has the rental place been on market.
But just because someone else went bust doesn't necessarily mean it's a bad investment. The investment could have been in the hands on a poor investor.