All Forum Posts by: Jon H.

So How do we know if your getting a deal. What i do is i'll check zillow to see what has sold in the last 6 months. If i'm really interested in a property i'll call my realtor and have him pull the comps. If i think there is enought meat on the bone i'll then go see the property. This is when knowledge of what things cost is an advantage. Google investment property costs sheets or Construction lists. Take the list with you and check everything you think will need to be done. Or better yet to get started call a contractor and have them meet you at the property. He can go through the property with you and give you an idea of what things will cost. Do this with a couple of different contractors on a few diff houses. That way you'll get a feel for the different ranges. Also there are some great calculation tools this website offers. Use them to make sure you would be getting a good return on investment.

Hey Daniel,
I agree with jacob. I'll check out zillow for a deal in my target price range. I'll drive the area to get a feel for how safe it is, if i like what i'm seeing, etc. Once you get a feel for the areas in your town you can pretty much limit your search to the areas your most comfortable in. Then you can search Zillow, Hud, Craigslist for deals you might be interested in.

Hey Chris,
I live in the Birmingham Al area. My wifes family lives in Cumming. Anyway There are some great deals in this side of the Country. I'm finding houses everyday on HUD for next to nothing. I'm also about to take a real estate course that teaches me how to buy/find houses by marketing directly to the homeowners. Good luck in your endevors and i'll let you know how it works out for us to give you some pointers down the road.

Hey Jeremy, I am right there with you. However you seem very emotionally attached to this one. If your mentor is telling you to walk away. Walk away. If the bedrooms and pretty much the whole house is un-livable move on. It may seem like a good deal at 6-7K. However your thinking you can get all that done and somehow turn a profit. The reality is if the house is in this much need of repair you're going to spend well over what you could potentially find a better home for that doesn't need all the repairs for a bit more money that will have comps and you can flip for a profit. I would find out exactly what repairs are needed and how much it will cost to fix the house to a liveable standard, add that to what you were gonna pay for the house and then see if there are other deals out there that will cost that amount that will appraise. This will save you the head ache of possibly losing alot of money and time. I'm starting out too. So trust me i know where your at with this one. Best of luck - Jon H.

as for the loan. I work in mortgage lending/refinances. The underwriter will require a gift letter from you signed by whoever gives you the money. And they'll obviously want to see it in your bank account. If it were me i'd save the 20 sometimes 30% needed to put down. If you use an equity line you can always refinance it after 6 months and pay your equity line back and have a mortgage on your rental and use your equity line again to buy another one. Also there are some banks that will give you a personal loan up to i think 40K (this all depends on your credit and debt to income ratio). Obviously this will be at a higher interest rate but you could then turn around and refinance into a conventional mtg after 6 months for a lower rate. Then you could do it again. Best of luck - Jon H.

Hey Tina, You can do this. I'll tell you how. My wife and i were looking to buy our first home. We spent almost a year looking (we also got married within this year) for a foreclosure that we could eventually flip. We finally found a 4bed/2.5 bath home in a golf course neighborhood. We haggled with the bank and got it for around 168K. In 2007 the home sold for 275K. We have lived in our home going on a year an a half. We've done some landscaping and had to fix a pillar under the house. Other than that we've spent all total of about 9K on our home. We decided to refinance our home in june. Our appraisal came back at 225K. After a year a foreclosed home will show differently to appraisers. When we bought the home it appraised for 172K. Anyway we took out a 90% equity line with Compass bank. We now have a 50K equity line that we plan to use to buy our first rental properties. Our original plan was to flip our home but after seeing the market we love where we are at. So this makes much more since to us. However in your case you could live in it and do a fix and flip. However you'll get hit with bigger taxes if you sell before you've had it for a year

Hey Frank, I agree with Jimmy. Your letter is definitely too long. You don't want to come across un-professional either. Leave out "you are willing" and explaining what the homeowner will get. (they will expect you to handle everything). If it were me i would make it short and sweet. Hello, I'm Frank - lastname. I am an investor in the area. I pay cash for homes. If you are in risk of foreclosure, need to move fast, need cash for bills, want to relocate in town..... please give me a call. I will make you a fair cash offer for your home. Also if you know of someone needing to sell there home fast, please give me a call. Thank you and God Bless. Also i read another post on here where the Wholesaler drove around neighborhoods in his target marked looking for overgrowth and distressed property and mailed to them directly. You can get the owners name from the county tax records. Just a thought since your trying to save money. Best of Luck - Jon H.

thanks so much. I'm reading new articles on here everyday and am learning more and more. If i can find a Management co that only takes half the 1st months rent that would be ideal.

Thanks for the advise. I keep trying to post and it says the body is too short. I just lost a long post. Anyway, Here are the numbers purchase price: 18,900 Taxes: 350 yearly ins: 750-800 yearly property management fees: 1575 per year rent: 750 per month: $9000 Net income: $6325 I spoke with a property manager who has a rental in the same neighborhood and she said that i could get $750 per month (non-section 8). I will get an inspection if i win the bid. Here are my concerns with the repairs. the roof doesn't leak and has all new shingles on it. However you can tell that the underlayment has rot or in places and is sinking in. I know eventually i'll have to replace the roof. The floor gives in places but i'm thinking this is due to the house being built in 1945 idk. The carpet looks decent but will need to go. The walls are white and need painting. the outside in vynal siding but the facia and soffits need to be painted. Everything else seemed to be in working order. currently the owner lives there with her son. They kept the place well maintained. The market for the area looks like this: homes sold in the last 2-3 years are from 7K - 60K. I've noticed alot sold for between 10-20K. There are houses on the market selling for 15K-60K. the nicer ones are listed for 40 - 60K. I'm thinking if i can get it for 15K i can put in new carpet and paint and rent it out and worry about the roof later on. Assuming the inspection comes back clear of termites and mold and electrical and plumbing and foundation all check out. Please review the figures and let me know what you all think.

Thank you so much. I will definitely get an inspection. Do you know the normal CAP rate investors look for?