All Forum Posts by: Ralph Stowe

One local guy says his speech is just, "My name is ___. I am really interested in buying a house in this neighborhood. Are you interested in selling or do you know of anyone nearby who is thinking of selling?"   You could also try the dealmachine app and send them mailings or leave a note on the door.

I was told by "the gurus" that FL. is the best market for that because they offer the highest returns.

I'm no structural engineer or architect but looking at the drawing, Is it possible to pitch the roof where the high point connects the center of the wall with the fireplace to the other pitched roof?  Otherwise if you pitch it to be parallel with the other section, any rain that falls on that (right) side will run towards the main part of the house and that could encourage eventual bad leaks, mold etc.. The best roof design gets the water away from the house as efficiently as possible.

Investment Info:

Single-family residence other investment.

Purchase price: $329,000
Cash invested: $10,000
Sale price: $389,000

I bought a lot for $51,000. I sat on it for a year. By the time I got my $281,000 construction loan, the lots next to me were selling for $106,000. If I was smart, I would have taken my $55,000 profits and ran. I was not smart. I built a 3300 sq ft house on the property, doing a lot of the work myself (and friends). I ended up going a bit over budget and sold the property around April 2004 for $389,000 and walked away with about $40,000 I put down on my current home.

What made you interested in investing in this type of deal?

I was 28 and still living with mom and dad. How pathetic was that? So I decided to get off my duff and invest in my future and bought a property. By taking out a loan, I was building my credit, so much that I qualified for a $281,000 construction loan.

How did you find this deal and how did you negotiate it?

I drove around where I wanted to live. This neighborhood was like that moment in Christmas Vacation where the beam of light was shining down on that one glorious tree. I felt, "This is it!! I want to live here!"  As far as negotiating, The developer said the lot is $51,000. He needed $1,000 down. So I paid him $1,000.  (I'm a hell of a negotiator aren't I ?)

How did you finance this deal?

I got a traditional loan from the big bank. For $51,000 for some land, the risk for them was minimal. The payments were easy as well.

How did you add value to the deal?

I did a lot of the work myself (Big no no!!) and took out a $281,000 construction loan with a bank that specialized in owner/builder loans. They were very nice.

What was the outcome?

I ended up going over budget, and sacrificed a lot of week-ends doing tile work, wood flooring installs, and hanging kitchen cabinets at 3 a.m. I ended up listing the property for sale and got $389,000 for it and walked away with $40,000.

Lessons learned? Challenges?

1. Don't do the work yourself! 2. Get it done FAST!! 3. If you have doubled your money on the initial investment without doing anything, take your profits and run!! 4. don't bite off more than you can chew. 5. Even if you make some dumb mistakes, you can still come out ahead in some situations.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Konvicka Construction who acted as general contractor for licenses, permits, and all the work I didn't do.

That does make a lot of sense. So there is still potential for a profit in these types of properties. You're not just having to clean up someone else's mess. Thanks, Joe.

So I'm finding several properties on my local MLS where it looks like a rehabber has purchased a property, did the demo work, cleaned it up, put on new siding, exterior windows, sometimes a new roof, framed out the structure, and now are advertising it for sale at this point. The only reasons I can think of why someone would do this is A: They realized they are way over budget and are heading for a loss, they want to recoup their investment and move on, leaving someone else to deal with it. or B: they are catering to designer investors who just want to put their finishing touches and design on the property without having to the nasty demo work and such. Is it 1 of these two reasons or am I missing something?

This morning the SWAT team raided a home in a nice neighborhood ranging from $220k-$280k.  Could this be a potential pre foreclosure buying opportunity? The house is in excellent shape aside from the front door where they forced entry. Trying to find the mortgage holder. They won't see another dime. All input is appreciated.