All Forum Posts by: Ralph Stowe

The trick is knowing where the land will grow in value before it does so you don't end up paying top dollar for it. Like Robert Kiyosaki's "Rich dad" buying up parts of Waikiki beach before it became a major tourist attraction. On the opposite side of the coin you can buy land for storage units in places where the land can't really be used for anything else (Near RR bridges, highway off ramps, etc..) . You can go in and offer the county practically nothing for it, but it means more tax revenue for them, and no one would ever build a house or outlet store there.

@Joe Splitrock  That was precisely the reason for my post. Should I be purchasing $65k properties and listing them for $200k+ or would I just be following greedy fools over a debt cliff?   I'm sure there is a reason they are asking such high prices. The million dollar question is: Will they sell for more than what they put in?  I'll keep an eye on them. Even if they sell for $150k-175k, there is still huge potential in this neighborhood. 

Thanks for the input everyone. Yeah, its better to keep the ARV in the $120's as that's what the rehabs have actually sold for in that area. I'll keep an eye on the $200k's and up. I won't hold my breath on a sale.

@Greg Parker LOL I love House Hunters Intl. "I'm a part time substitute kindergarten teacher and my husband sells sawdust out of the garage so we have a strict budget of $920,000 for the house." 

@Theresa Harris  LOL "Ok I went WAYYY over budget.. So who is gonna bail me out?...anyone??...anyone??... Bueller??..." 

I've been browsing the local MLS just to see which areas are trending, etc. More and more I'm finding rehabbed homes listed for WAYYYY beyond what the average sale price for the area is. Example, there is a run down house, a 4 bed 1 bath, 1500 sq. ft. that could definitely use some TLC (new floors, paint, granite counters, etc..) they are asking $65k for it, as is. Well rehabbed homes in that same area have been selling in the $120k's (ie. officially "SOLD)". But less than a block away in either direction, there are some rehabs (one 3 bed 3 bath around 1400 sq. ft.) they are asking $223k and another 4 bed 2 bath 1800 sq. ft. for $275k. So either the house they are asking $65k for is the deal of the year... OR 2 house flippers are REALLY overestimating for the area and stand to lose a ton of money. Are they OK having to reduce their asking price every few weeks given holding costs? Are they just shooting for the moon and being way too optimistic? Are they trying to spearhead creating the next "Up-and-coming" neighborhood? Or did they just make a rookie mistake and overbuild for the area?

A common theme I hear from pro's is to pay in 3-4 parts. Maybe an initial deposit to pull permits, then pay them after rough-in work is done, then a 2nd payment when they finish and finally, the last payment when it passes inspection. This keeps them obligated to complete the work correct the first time to get paid. If they are total scammers, you are only out permit pull money, but hopefully your due diligence beforehand will avoid those types.

In my Biggerpockets teachings, I'm told you should be either the first or last to offer on a property. It's possible all the big time investors have moved on.  But yes, there could be a more serious underlying issue. Hidden water damage, foundation issues, asbestos, something that would turn a great deal into a nightmare. 

Brandon Turner's Book "How to invest with low or no money down" had a good section on Lease Options.  I just read through. As a Pro Member you should have access to it.  I recall off hand the key points are an agreed upon price to purchase the house, and a specified time in which that offer is exclusive to the renters. 2-3 years seemed to be the standard. 

House hacking is a good way to break into real estate. Just keep in mind if you put less than 20% down, you'll be paying PMI for awhile so factor that into your expenses to calculate cash flow. All the best to you.

My 2 cents worth on the Than Merrill and Fortune Builders thing:  I heard the radio ad so I must give credit for him lighting the fire under me to stop thinking about it and start DOING it.  I paid $200 for the 3 day seminar.  Do I feel ripped off? Not really. I did get tons of good, useful info.  But they are trying to see who has $50k, $30k, $10k to invest with them. I prefer Brandon Turner's advice at BP who says, "Put that money into your first property." This ultimately led me to Bigger Pockets where you can pretty much get valuable tools and teaching for much less. So I'm here now.. but credit for starting my short journey so far goes to Than.

Be careful, in a week or so you might be getting a call from that bank saying, "Yeah. About that check you deposited..."