Thread: First time investor

Nobody?

Originally Posted by davidm

I have been browsing the craigslist website,

Yikes! I guess that is a way to find properites... I might need to try that.

Originally Posted by davidm

and have come across some properties that seem too good to be true.

During these times, it would seem to be that way... Some ARE too good to be true and some ARE NOT too good to be true. It all depends on the area, the condition of the house, the condition of the area, etc. So, you need to do your due diligence before investing, to weed out the BAD opportunities from the good.

Originally Posted by davidm

I don't have any good real-estate knowledge though, so I may be mistaken.

Well, that could be a problem... You don't want to just run into something without first knowing what you are trying to get out of it. It could cost you more than the $50K that you have to invest... It could bring your whole financial situation down with it. It is best that you get an idea of what you are intending to do with your RE investing career, and then take the steps to fulfill that. Do you want to buy and hold? Do you want to buy, rehab and flip? Do you want to just find and flip to someone else? Do you want to ...??? You need to know your strategy before you get involved, for a property might be a great investment for one way of investing, but would be devistating for another. You want to be on the "good side."

Originally Posted by davidm

Such an example is a property I found in South Chicago that is listed for $15,000. It is a 3 bedroom, 1 bath house, roughly 1,056 sq ft. It looks fairly beat up, but definately has potential.

Does it? Or is in in an area that NO ONE really wants to live in, but is forced to live in, because of their station in life? I mean no one really wants to live in "the projects" if they had their choice, but you have to do what you have to do. I would definately stay away from those areas, as your salability is very limited.

Originally Posted by davidm

I stumbled upon an article on CNN Money that claimed some homes were being sold for as low as $3,000 in areas such as Flint, Michigan. Does this sound legitimate, or are there thousands of dollars of costs that have not yet been mentioned?

Some houses in the Detriot (as well as Flint, I suppose) area have been around $5K, BECAUSE the auto industry is failing. Without the industry, there is no work, and therefore there is no workers, and therefore demand for housing, therefore it will become a ghosttown. You don't want to go to areas that are not growing, and MI is not growing (in those areas at least.) I would (personally) stay away from those areas, since unless another industry comes into the town, it will become "the ghetto" and barren.

Davidm, again, you need to understand what you are wanting to do with your RE investing before you start investing. You want to make sure that you invest wisely.

Here is a phrase that YOU NEED TO ENGRAIN IN YOUR MIND: Money/profits are MADE when you BUY, and they are REALIZED when you SELL!! You can not make up the profits, if you bought poorly!

Hope that helps.

Later!!

Originally Posted by REITrainingWhse

Yikes! I guess that is a way to find properites... I might need to try that.



During these times, it would seem to be that way... Some ARE too good to be true and some ARE NOT too good to be true. It all depends on the area, the condition of the house, the condition of the area, etc. So, you need to do your due diligence before investing, to weed out the BAD opportunities from the good.



Well, that could be a problem... You don't want to just run into something without first knowing what you are trying to get out of it. It could cost you more than the $50K that you have to invest... It could bring your whole financial situation down with it. It is best that you get an idea of what you are intending to do with your RE investing career, and then take the steps to fulfill that. Do you want to buy and hold? Do you want to buy, rehab and flip? Do you want to just find and flip to someone else? Do you want to ...??? You need to know your strategy before you get involved, for a property might be a great investment for one way of investing, but would be devistating for another. You want to be on the "good side."



Does it? Or is in in an area that NO ONE really wants to live in, but is forced to live in, because of their station in life? I mean no one really wants to live in "the projects" if they had their choice, but you have to do what you have to do. I would definately stay away from those areas, as your salability is very limited.



Some houses in the Detriot (as well as Flint, I suppose) area have been around $5K, BECAUSE the auto industry is failing. Without the industry, there is no work, and therefore there is no workers, and therefore demand for housing, therefore it will become a ghosttown. You don't want to go to areas that are not growing, and MI is not growing (in those areas at least.) I would (personally) stay away from those areas, since unless another industry comes into the town, it will become "the ghetto" and barren.

Davidm, again, you need to understand what you are wanting to do with your RE investing before you start investing. You want to make sure that you invest wisely.

Here is a phrase that YOU NEED TO ENGRAIN IN YOUR MIND: Money/profits are MADE when you BUY, and they are REALIZED when you SELL!! You can not make up the profits, if you bought poorly!

Hope that helps.

Later!!

You sir, are a gentlman and a scholar.

This post gave me more than enough about what I wanted to know. For that, I am forever in your gratitude, so thank you very much!

This is the best period to invest in real estate. I will recommend to invest for rental, foreclosure or low size properties because it is easy to resale these properties again. Try to get fresh properties instead of going after resale offers. Keep in mind that real estate market is very competitive now so do a good bargain not only for the bucket price but also for the related services like legal formalities, minor repairs etc. To know more about latest real estate business practices and trends, you may visit foreclosureworkouts.info/ also.

If you can find underpriced property in good condition, then go for it, but in general I think it's too early to start looking at properties.

Properties priced as low as $3000 and lower do exist and not only in Flint, Michigan. Ohio also sees their fair share of property selling at low, low prices and sometimes, the areas are not the typical definition of "bad"......there is another reason why this is happening. Real estate is local, very local.

Let me give you a great example of why you might see a house priced low in an area you might see as "good". If you have a chance sometime, take a look at the houses on Realtor.com (low to high) in Cleveland Heights, Ohio. Cleveland Heights has some classic well done old style colonials, the architecture in that city and neighboring Shaker Heights is amazing on a lot of the older houses. It is an area with lots of shopping, diverse restaurants, parks, et al so why are the houses so cheap?

Local government.

Cleveland Heights is one of many cities on the east side of Cleveland making it incredibly difficult for any new buyer to enter the market whilst damaging their property values all in the name of somehow maintaining them. If you purchase a property in Cleveland Heights, the property is required to be inspected by city inspectors PRIOR to transfer. The inspection is inside and out and it is very intrusive. Violations listed are required to be corrected with in a specific timeframe after closing. However, here is the kicker. The purchaser is required to put in escrow in most cases 125% of the cost to cure the violations, that is in addition to the purchase price. So if you purchase a house at $20,000 and the violations listed are estimated (by the city, did I mention that....not your estimates but the city's) at $25,000 then you are required to put in escrow an additional $31,250 to close bring your total to $51,250 plus whatever title fees, etc. for that $20,000 house. Other east side markets such as Bedford require 150%, so be aware that the price you see is not always the price you will pay.

Good luck!

David, welcome to the world of real estate investment. There are a ton of L.A. people investing in the midwest. Particularly here in Cincinnati. Why? Because property here is a lot more reasonable than there.

No problem buying a home here... you can search the Cincinnati MLS and find a number of properties at the extreme low end of the price range.

The question is, once you've bought it, what are you going to do with it, and how?

Is it a buy-and-hold, that's intended to produce long-term cash flow? Or a fix-n-flip, that you hope will produce a nice chunk of change quickly? If the latter, you'll want to consider title seasoning rules. You'll find a post on this at http://www.hubpages.com/hub/Title-seasoning-issues.

How will you determine that the subject property has any value at all? How will you hire contractors to do the repairs? If it's a rental, how will you find/screen prospective tenants?

Lots of questions... more than you'll find answers in this forum. If you're not already networking with other investors who are investing out-of-state, you should be. Find a local REIA (Real Estate Investors Association) chapter in your area, and start learning and networking.

Real estate investing can be fun and profitable. And, it always involves some risk. Best to get some education under your belt before you start throwing your hard-earned money around.

Good luck!