Re: Too thin - Posted by Killer Joe
Posted by Killer Joe on April 04, 2005 at 13:49:48:
whyK,
If you do velocity deals like many of the successful REI posters on this board do, my method would consume too much time to make it worth doing.
I like the rehab niche because I grew up doing construction (My sister even MOVES houses, she’s my hero in the rehab biz. Her latest project is a 3500 sqft house from the late 1800’s).
I do this part time to support my inventing Jones, and have other businesses that cash flow. My big problem is if I don’t have a project lined up that requires some type of hammering, I go into withdrawals. That’s the price I pay for 45 years on that drug.
I drive around to pick and choose neighborhoods where I expect my tools will be safe, as an example, and where I could imagine myself living without fear of overly stupid situations rearing their ugly heads. I’m not an ‘in and out, turn and burn’ kind of guy, don’t have to be.
I have no problem finding ugly houses in my part of LA. Doesn’t mean you can land every deal you think is a good candidate, just that I don’t think there will ever be a shortage, here at least.
Here’s where driving around pays a benefit. Everyday you drive down the same highway(s) on your way to work, passing the same subdivisions you have for years, yet you have never turned into one of the streets leading into that subdivision, or neighborhood. One day you just decide to check it out and you find that here is a neighborhood that fits your criteria, and yea, there are a few older homes that need your touch. You makes notes of the property from what vantage points are available to you, and you start your DD on the neighborhood.
If you don’t know the comps in that area you will have no idea what you would Pay or Sell for. You know from experience what the prices are at HD or 84 or Lowes, so when you get access to the property later on, you have a good idea what your rehab costs will be, they’re fairly standard, and you can then pencil out your offer. Will the owner take it? Who knows?
But here’s what you know, you now know what that neighborhood sells for, and the kinds of houses that are in it, and that info can prove to give you a jump on your competition when a distressed property from there comes on the market.
This method has made me close to a half a million dollars, so when all the velocity snipers jump in to tell you what an idiotic idea this is, let 'em rip, it won’t change my reality, that’s for sure.
KJ
