All Forum Posts by: Michael Rossi

Charles,

What are you doing to locate desperate sellers?

I have found that real estate investing is a people business. You've got to get out there and meet people. I would suggest starting with your local REIA. The key to making useful connections at your REIA is to meet and make friends with the SUCCESSFUL INVESTORS. Don't hang around with other newbies. The successful investors will often know of deals that they'll refer to you, often for nothing. Moreover, the vast majority of newbies rapidly fail and it is often possible to buy properties from these disgruntled new landlords. I have bought a LOT of deals from disgruntled new landlords (they don't know how to deal with tenants and get eaten alive).

A good realtor is extremely valuable. I suggest trying to find a young realtor that is just out of school. Tell her your purchasing criteria and then buy these deals when she finds them for you. Realtors talk and network and they know when someone MUST sell. I've got two excellent deals that I'm working on right now from my realtor. One of them is a SFH that is going to (private) auction on Monday. It's worth over $80K and I think i might be able to get it for $20K. The other is a mobile home on it's own land. Retail is $45,000 and I'm putting in an offer today for $18,000 and I will almost certainly get this one. The owner is desperate.

I also buy a lot of REOs and have a small ad in the classified ads section of the newspaper that brings in 3 or 4 deals a year.

I do not do direct mail, cold calling, knocking on doors, etc.

Charles,

I think that your strategy of making 20 offers a day is flawed. I make 2 or 3 offers for each one accepted. The difference is that I only deal with DESPERATE sellers. I completely ignore houses being sold at retail prices, because I'm not paying retail.

I think that you'll have a lot more success if you just look for desperate sellers!

Good Luck,

Sure, I would buy a note like that if the collateral was good. I might pay 50% of face value. No-one would pay face value for a homemade note. However, I'm not sure how that be helpful to you.

We have 2 great REIA's in Columbus. I would strongly urge you to join at least one of them and attend every meeting. Learn all you can.

I've never heard of the real estate arena. You shouldn't have to pay anyone to be a birddog for them. Check it out carefully if you consider it. There are 1,000,001 scams out there.

Good Luck,

Bling Bucks,

There is every reason to be cautious when you're first starting. You should definitely ask questions, read books, join your local REIA, post questions on this forum, etc. The truth is that the VAST MAJORITY of newbies fail. The number one reason they fail is that they don't have sufficient cash flow for their business to survive.

"Just Do It" is great advice if you're thinking about starting an exercise program, but it is terrible advice for buying real estate. First, learn everything there is to know about your business. Then, thoroughly learn your market. Develop a reallistic business plan using real world numbers. Then, after you've done your homework, THEN buy a property. Don't mistake what I said. I'm not saying to procrastinate. You can do all the research in a very short period of time if you're motivated. If you want to be in the Real Estate Investing Business, then study hard and get started.

Good Luick,

In my experience, any alleged money-making scheme where they can't tell you what it is....CAN YOU SAY SCAM?

watapolice,

"Flyover Country" is what you see out the window as you fly from one coast to the other. Generally, prices are far overpriced on the east and west coasts. The vast majority of the country in-between the coasts is still very reasonable and sane.

Again, I would like to emphasize that it is VERY DIFFICULT to make money with rentals long distance.

Good Luck,

Starting a business should be all about the numbers. You didn't give any numbers, but rather just a general desire to start a business. If you only pass through this town once a month, how would you run the business? How much is the property? How much would it cost to build whatever building you are considering? How much do you estimate your gross income would be each month? What about operating expenses and debt service?

Generally, if you could start a buisness and make a significant profit, then starting a business is a good idea.

Good Luck,

watapolice,

I don't have properties in the areas you listed, but I do have several dozen rentals here in Ohio. You can buy properties at these prices in the majority of flyover country. However, buying a rental at $30,000 is no assurance that you can make money with it - not by a long shot! The purchase price is irrelevant, what matters in a rental property business is cash flow and equity. Lower purchase prices usually mean that the rents are lower, vacancies are higher, tenants are worse, etc. Long distance managment and maintenance can wipe out your cash flow in a hurry.

Good Luck,

It is best not to dabble at all. REI is a serious business like any other business. It is MUCH easier to run a business if it is close to home. You didn't say what area of REI you are interested in, but it is difficult and expensive to manage rentals or manage contractors for rehabs long distance. In fact, it can be a nightmare. I know that because I see out-of-state (primarily California) investors buying rentals here in Ohio all the time. Almost without exception, they fail in a short period of time because they didn't know the market; didn't have a good property manager; didn't understand cash flow issues; and ended up losing their rear.

Of course, that's good for me, because it gives me a steady source of properties to buy for pennies on the dollar.

I'd suggest investing close to home. If your market is terrible and you REALLY want to invest, then moving might be the answer. Almost all of "flyover country" is a great place to invest.

Good Luck,