Posted by Ronald * Starr(in No CA) on January 04, 2003 at 16:48:30:
Need more advice lol - Posted by JR
Posted by JR on January 03, 2003 at 20:17:47:
ok lets see ive ben coming to this site for 3 days and posted a total of four messages. I just cant help it the answers are so helpful and come so fast. well anyway here’s my question.
I saw an add in my local newspaper that says this
3 bedroom farm house
$700 plus utilities or sell for $125 000
now I have not even seen this property so I do not know even what it looks like. I thought to myself that maybe since the owner is willing to rent or sell that perhaps the owner is a widow for example and her husband previously rented the place out and then died. She is now left with the property and has no idea what she should do with it so she is trying to sell it or rent it.
whould you say this is worth looking at?
what should I do first call and ask questions like why they are willing to sell?
Re: Need more advice lol - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on January 03, 2003 at 21:48:28:
JR----------------
I would suggest that you not buy this property. You are nowhere near ready to do something like that, in my view.
And, you could talk to the owner on the phone if you want to see what happens. It will give you a taste of reality to help you. But this could be a waste of time, your most precious resourcse. I would suggest that you have not a clue as to whether this is a great deal, average deal, terrible deal and will not know after talking to the owner(s), probably. I’m not sure how much you could learn from this encounter, but I worry that it will not be much. There are probably a lot of more productive ways to spend your time at this juncture.
My advice for you is to not start slapping paint on the walls before you scrape off the old loose paint and get the hardware and windows masked off. What am I saying? It is an analogy–comparing painting the exterior of a building to being a real estate investor. I am hoping that you have some experience with painting so you can understand my analogy. If not, just say so and I’ll stop the analysis.
Ok, before you start applying paint to the building you have to do the “prep” work–the preparion work. You have to get the surface ready to take the paint and hold it for years to come. You have to fill voids and crevices to make a smooth service, you may have to do some priming, you will want to cover the scrubs and anything else that you don’t want paint on. You will have to do a lot of work before you ever open a can of the paint you want on the building. Beginning painters don’t know this and often screw up the work. Beginning investors often also try to work without doing adequate prep work, in my opinion. I recommend that you do not do so.
You should, it seems to me, spend several months studying up on real estate investing before you even start looking at properties in any kind of a serious way. And certainly before you start putting out offers or spending money.
If you have not already done so, I recommend that you read my post for beginning investors. Just put “beginners success” into the search function at the top of this main bulletinboard forum of the CREONLINE.COM website. The first post should contain my advice, after the first couple of paragraphs.
Now, I will give you a little lesson here about the property that you are mentioning seeing an ad for. The rent and the price seem out of whack to me. Either the rent is too low or the price is too high, I think. This might not be so. The way to know is to know what rents and prices other houses command in the area.
I would not consider buying this house as a long term rental if that rent amount is a market rent for the area–just way too high a price for the rental income. Is the rent low for the area or the price high? I have no idea. And I’d guess you don’t either. I’d be inclined to think probably the latter. To answer that question you would have to study the rents that other properties are going for or at least are being asked for. Then find out what similar properties sell for. Then you might have some idea.
Now, if the rents are too low for the area, one way to make some money here might be to rent the property with the right to subrent it to other people. And get an option to buy the property sometime in the future, if you can. Say for the next half dozen years. With the price set at today’s fair market value of the property or their asking price, whichever is lower, again, if you can.
Yesterday here was a long post on this forum titled something like “new year and newbies” which discussed this type of investing. If you have not read it, you might want to do so now. This is the best post I have seen on the topic of subleasing properties for income in the 22 months I have been reading this site.
Good Investing and Good InvestigatingRon Starr*
Re: Need more advice lol - Posted by Kristine-CA
Posted by Kristine-CA on January 04, 2003 at 12:32:26:
Ron Starr: I am interested in reading the post you mention–new year and newbies regarding subleasing for income. I cannot find it, but it wouldn’t be the first time I couldn’t see something right in front of my face…
Do you have the url? Thank you. Sincerely, Kristine
Re: Need more advice lol - Posted by JR
Posted by JR on January 03, 2003 at 22:52:34:
Thank you for your advice
I am going to get a far more solid understanding of real estate mechanics before I actually attempt a deal
thanks again for the advice