Posted by Fox-IL on December 08, 2000 at 17:25:09:
Thanks for the advice. Strangely enough, today at the office, I received a call from a friend who has an uncle who wants sell his 4 flat building. It is bringing in more than the 2 flat I was looking at initially. The uncle is HIGHLY MOTIVATED and is DEFINITELY willing to do a creative deal. He’s willing to accept NO MONEY DOWN and pay closing costs. The only repair work needed is new windows. We will be getting together tomorrow to talk about the details. I will keep your advice in mind.
(By the way, the 2 flat turned out to be a major repair project. There’s a coach house that needs to be demolished, etc, etc. I personally don’t want to take on repair projects at this time. In the future, maybe.)
Can someone clear the confusion? - Posted by Fox-IL
Posted by Fox-IL on December 07, 2000 at 14:45:05:
I was excited until about 10 minutes ago when I read and article posted that detailed why a new investor shouldn’t buy rental property their first year.
I have gone through the motions of learning the basics, scouting properites, making contacts, and lining up pre-approvals. I found a nice 2 flat property with a net income of $6600 a year BEFORE I would raise rents (they are low for the going rates in the area). I thought this would be a nice way to start. The place is fully occupied and the tenents pay on time and are good people.
The one concern I have about this is that I will not have more money for another investment (if I use the traditional methods). However, I should be able to use equity from my first property to get another. The subsequent property could be a quick flip or lease/option. And so on and so forth.
If I am missing something, please let me know. I don’t want my first investment to be my first big mistake as well. I appreciate any and all advice.
You’re getting that question because you aren’t finding the MOTIVATED sellers that you need to do creative RE. Decide if you are going to go traditional or creative. Creative takes more work in getting knowledge up front. Also you first post didn’t really contain much useful info. for analyzing the deal. Especially what is it’s market value. You shouldn’t be buying until you know that, so you know what are buying. Also you really need to check ALL the info. the sellers gives you about the property and tenants, etc. Sellers have been known to lie in order to sell a (problem) property.