looking for help to get MORE creative - Posted by mountaingirl

Posted by suzy on October 07, 2007 at 08:00:40:

mountaingirl… may i email you or could you email me. I have a question. :slight_smile:
Suzy

looking for help to get MORE creative - Posted by mountaingirl

Posted by mountaingirl on October 06, 2007 at 08:01:53:

hi everyone!

I read the board regularly and contribute when I have something to say.

I have been a fairly creative type investor for about 13 years now, learn stuff all the time and this board helped me get the best deal of my life – a great house on the river because I learned “and or assigns” in my contract!

well, now my little town has been “discovered” in a big time kind of way and while there are deals out there (I found two really good ones last year) it is a very small town, about five thousand people and more and more people are looking for the same few deals out there.

I have also seen many investors buy deals I thought were too slim to bother with – too much risk for the money, for example fixer uppers that were expensive to begin with. some are flipping, but the profits seem slim to me, ie: 25,000 on a 200,000 investement including fixing up and sitting on it six months or so.

so, I am looking for for ideas on how to get even more creative in a very small town market where things are still going up (believe it or not, maybe 15-20 last year alone).

one of my fears is that developers are driving up the prices and the end buyers won’t show up. but so far they still are.

anyway, what I do is good fixer uppers, especially large lots that can be divided into a fixer and a vacant lot to build on.

I also will do anything 20% or so below market that can be developed or fixed up to market levels.

so, I am looking for advice on ways to find deals in a competitive environment that is also VERY small.

thanks guys!

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Re: looking for help to get MORE creative - Posted by DP

Posted by DP on October 06, 2007 at 10:59:57:

I was just thinking about this the other day. One way you can pay more for fixers and still make a good profit, is to lease/option them. Take a good look at Bill Bronchick’s classic article: “Lease Option a Junker” for ideas on this.

You could pick up fixers for prices far above what you would be willing to pay cash because:
#1 You’re not paying cash
#2 You’re not doing any of the work

Sub-L/O it to a contractor who will fix it up themselves and you’ve got yourself a sweet deal.

Re: looking for help to get MORE creative - Posted by Bob the Builder

Posted by Bob the Builder on October 06, 2007 at 10:12:55:

If you are worried about Builders overbuilding in your area why don’t you become one? If you manage to get a 4-10 lot subdivision approved and build one house at a time, you should see a very good return on investment for your time and money. If you are your own General Contractor and hire everything done you should still be able to see a high RIO as you said your town has been found in a big time way. Find out what the newly built houses are selling for. Find out the square footage of the houses. Then figure out the cost per sf. When you build your stick built houses try and stay within 10% of that number.

How far away are you from a city that might have a Real Estate Investment Group? If you attend a meeting you might be able to find a partner that will make it possible for you to become a developer/builder with that investor or partner. True, this cuts down your ROI but if you can not qualify for a NOO construction loan you might have to bring in a partner.

Good luck in your future RE investments.

Bob

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Re: looking for help to get MORE creative - Posted by mountaingirl

Posted by mountaingirl on October 07, 2007 at 07:32:08:

funny, that is actually what I have been doing the last few years! the deals I have been finding are to divide lots and I build about one house a year on them. it is going well, but the lots are getting even harder to find.

Re: looking for help to get MORE creative - Posted by suzy

Posted by suzy on October 06, 2007 at 18:28:43:

Bob-
Can you tell me if there are certain requirements on being able to become a builder? I have thought about this in my town and i didn’t know where to get info on how to start. Thank you so much!
Suzy

Re: looking for help to get MORE creative - Posted by mountaingirl

Posted by mountaingirl on October 07, 2007 at 07:34:32:

a friend acted as a mentor to me. he never made me feel I couldn’t do it from lack of experience or from being a girl.

so just find someone and start asking questions. I make a very nice living and don’t work too much doing one house a year, financing it myself.