An amateur fisrt step : An advice from you please! - Posted by Javier

Posted by Bud Branstetter on October 18, 1998 at 10:59:33:

Mr Donald,

In my part of the country the middle class is the working class. Javier’s question was for an amateur to do investing. The control of real estate without using any money for long term is more difficult. Short term is not a problem. While an amateur can make money in most markets it is adviseable to stay out of certain area. Low end area are just harder to do L/O because of good tenant availability. High end L/O are more difficult too. Just not as many people in most markets can affort the $250K and up house. As you probably know note buyer do decline notes in certain low end areas. I think notes are great too but there is a lot of competition to make great amounts on flipping notes. Volume determines the note brokers surviveability.

An amateur just isn’t prepared for the high end. A couple of weeks ago I posted a possible L/O on a $540K property. I felt only one of the responses was positive or constructive. I’ll still advise amateurs to avoid low end areas.

An amateur fisrt step : An advice from you please! - Posted by Javier

Posted by Javier on October 15, 1998 at 09:04:17:

Hello there,
It seems like one of the most important issues for a begginer might be not to “buy and hold” but to “buy and flip” to get the cash to invest in "buy and hold…"
Either way (and, my answer may be more than one) I’d like to ask: why should I take into consideration when choosing a neighborhood to buy property? There are so many subdivisions I can go to, but want to know why I have to choose this one or that one. I’ve been told NOT to buy in a place where I’d like to live…that makes sense to me…but then, what are the rules to follow or, from your expertise, what’s the profile of a neighborhood where I should start?

I really appreciatte your help…
See you,


An amateur fisrt step : An advice from you please! - Posted by Bud Branstetter

Posted by Bud Branstetter on October 17, 1998 at 21:41:20:

The typical advise is to work in middle class neighborhoods. The ones with pickup trucks. You want to stay away from areas where they park on the lawn. The typical advice is also to buy where it is easy to get to from your house. Then there is the philosophy that you buy where ever you can get a good deal.

My view is that you want to accumulate cash so that you can buy and rehab if the deal comes along without using hard money or the banks. As you progress and don’t need their money then you start building your commercial line of credit with a bank so that you can do it full time. Along the way if you find a great deal and need to get a mortgage so be it.

I was discussing a deal with another investor this morning in which the seller wanted some cash now but was willing to wait up to 5 years for the rest. Because of this I may buy the note for an 79% ITV and make 35% anualized return. That is when you want the cash.

An amateur first step : An advice from you please! - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 17, 1998 at 23:03:58:


Your typical advice about middle class neighbourhoods, I beg to differ. If I see pickup trucks, I think working class. Whatever your thoughts - the adage of location, location, location is probably wrong.

Can you buy and hold or buy and flip or buy and control (l/o) with little money out of pocket? If so, it really doesn’t matter where the property is to a certain extent, as long as your fundamentals hold true.

That’s why paper is such a great deal if you know the mechanics of the trade - the returns are yours for the asking. You don’t have to worry about location, just the yield of the note, and its saleability (sic).

Hmmm… this may be the way to go, after all :slight_smile:

Mr Donald