All Forum Posts by: Roy S.

Are you marketing it yourself or through a real estate agent?

Make a flyer. Distribute it among all the neighbors. Offer $500 if a buyer names them as a referral. Stress how they can pick their neighbor, whether it be family or friend.

Make another flyer offering it for lease option. Distribute it at nearby apt building (may have to get permission first).

Good luck!

Sounds like you're well underway.

Go ask them :)

I get the impression you want to buy a house for yourself rather than be a real estate investor - nothing wrong with that, but it changes what the relevant advice is.

Typically, you don't want to buy a house unless you're going to live there a few years (3-5 at least). The reason being that when you buy you have to pay closing costs (say ~5% of price) and when you sell you have to pay closing costs (say ~10% of price). That 15% makes for a lot of rent :). And when you graduate and want to move, a house can take a while to sell.

Also, when you apply for a mortgage, you get better rates as an owner occupant, and there's plenty of government incentives/grants for first time home buyers. But if you read the fine print, these often require you to stay there for a certain number of years.

I think your best course of action is to find a new real estate agent. Let him know what you want upfront. You may have to go talk to a few before you find one that clicks. Or since you're already looking at websites, they should list the selling agent. Often, they'll work for you as well, since it lets them pocket double the commission. I don't know if the ones showing foreclosures will do that though, as they may have to work exclusively for the bank.

You can also find a local REIA club. People there are looking to sell houses cheap. Listen to the annoucements and pick up fliers on the tables set up for them.

One local Las Vegas REIA club is Prosper. http://www.prosperreia.com/

Caution: while I like my fellow investors, some are more than willing to take advantage of a newbie. Just because a house is worth $X, doesn't really mean it is. Get a professional inspection done. It would even make sense to have someone you meet at REIA go over the deal and see what he/she thinks about it (someone different from the seller, natch :) (And yes, you should slip him some money for his time and/or at least treat him to dinner).

You should also go to a bank/credit union and get pre-qualified for a mortgage. Check what they say you can afford vs what your budget says you can afford. But this is the MAXimum amount - you'll probably want to go lower.

Good luck!

Basically, it's a neighborhood that no one wants to live in. High crime rate, drugs, murders, etc.

Do your compariables also have such a driveway? What about other houses in the neighborhood that sold but are not compariables except for a steep drive - what are the DOM for them?

As for me personally, I don't mind a steep driveway if it's the car that has to do all the work :) I do stay away from houses where you park on the street and then have to climb a bunch of steps to get into the house.

If she wants out of the lease, it may be better in the long run to let her out. She can easily do things that will make it fail inspection.

Good luck!

Before you do your mailings, you'll want to go thru the list and drop the addresses in "warzones" (unless you have a buyer who specifically buys there, as most buyers avoid such a place).

Good luck!

A couple of thoughts.

$85,000 * 70% = $59,500. If you're doing $25,000 in rehab, you're ok, but $30,000 is too much. But I think this if for getting *other* contractors to do the work. Unless your time is worth $0, you should get the houses cheaper.

$85,000 sale price
-$58,000 loan
-$5,800 interest
-$7,000 your down payment
-$8,500 selling fees (assume 10% of sale price)
-$1,700 buying fees (guessing 5% of $3500 buy price)
-$1,000 real estate taxes for a year
=======
$3,000 profit

Is $3,000 worth 6 months of work?

I don't want to be a downer. I originally planned to tell you to go for it, or you'd be kicking yourself for a long time. But I don't think the numbers work out.

As Justin said, the hardest part is finding the deals. Why not take one of the job offers, and continue to do RE after work, but hire someone else to do the rehab?

Also, before you jump into it full-time, how much cash reserve do you have? You want to be able to cover yourself when Murphy comes to visit :)

Good luck!

When you graduate, are you definately staying in the Pittsburgh area? With the current job environment, you'll probably want to be able to move to another town if necessary - which affects the strategy to choose.

You might try bird-dogging.

I like the fix & flip idea. It'll let you build up reserve cash for when you start landlording.

If it's a single family, don't live in it while rehabbing. Rehabbing goes much much quicker when they're not trying to work around occupants. If you get a good crew on it, the rehab shouldn't take long. After it's complete, you might move in minimally, just so someone's living there and it's not vacant - but be ready to move out at anytime. Also, if you're living there, but sure everything stays neat and staged, so it can be shown even without warning.

If you go with a multi, then you can live in one while you fix up another.

I would wait until you actually move into town to start doing rentals. That way, you can buy rentals around where you're living instead of clear across town.

Good luck!