Newbie in distress - Posted by Etinoco

Real Estate Investing
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Posted by Anne_ND on March 07, 2006 at 20:47:21:

I’ve gotten lots of recommendations from the Inspections Dept, and from Lowes and Menards (no Home Depot where I am) for local contractors. I’m a regular in these places so they know me, maybe that’s why I get all kinds of cooperation.

Realtors in my area don’t know much- those who are “investors” are usually slumlords, so their recommendations are pretty lame. I just believe in knowing the market, which is something you can get from going to lots of open houses.

Personally I would not recommend working cheap on someone else’s rehab. Is this going to be a business for you or a hobby? My time is better spent finding deals than hanging drywall for $8/hour. I don’t even want to contemplate the liability issues involved.

Anne

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Newbie in distress - Posted by Etinoco

Posted by Etinoco on March 06, 2006 at 21:31:15:

This will be my first deal and this is what I plan to do:

I have found a distressed property in a low income area in kansas city. The
property is inhabitable meaning it’s in perfect condition to be
rehabbed.

I have found the owner of the property, the city he lives in, and his
phone number. I will call him and first make sure that the property
belongs to him and that his property is for sale, see what the
asking price is, make an offer to buy wholesale and meet with him to
sign the contract of sale allowing me to control the property.

The contract will include a long settlement date with the right to
extend, a right to assign and remarket the property before settlement,
and a right of entry during my contract period.

Then I will find a rehabber in Kansas City by placing an ad on the
Kansas city star and other papers sophisticated investors enjoy reading
(like the wallstreet journal). Once they start calling, I’ll show them the
property and one will make an offer, I’ll double close, and then look back and
reflect.

Those are the basics of my plan, I will try to find a partner to shorten
my learning curve and have a helping hand. if this fails, then I’ll learn.

But seriously I’m on the web trying to find advice and all i can find is an
investor trying to sale me his system. I"m a broke, college student, with
no real estate experience whatsoever just book knowledge, but time is on
my side, enough time to start learning. I’m looking for any helpful
advice, from anyone.

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Re: Newbie in distress - Posted by Joe

Posted by Joe on March 07, 2006 at 09:49:25:

I’m guessing you won’t want to advertise in the WSJ. That’s a national paper, do they even offer local advertising? Seems like that would be similar to advertising in Times magazine. And if they did offer local advertising, the prices would probably be through the roof. Instead, find your local papers and advertise in there (if you want to advertise in the paper). There are other avenues of advertising. In your purchase contract, you should have wording that lets you post signs on the property. Once you have the place under contract, you can put signs up. Also, go to your local REI club. Once you have the property under contract, advertise at the meetings that you have a rehab investment for anyone interested. But make sure your numbers work. You need to leave enough room in your offer for your profit, the rehabber’s profit, repairs, holding costs, closing costs, etc. If the numbers don’t look good, no one is going to want it.

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Re: Newbie in distress - Posted by Anne_ND

Posted by Anne_ND on March 07, 2006 at 06:45:11:

I think the humor is when you say that you’ll find a rehabber by advertising in papers that sophistocated investors enjoy reading. Typically rehabbers are not sophistocated investors who sit on their derrieres and read the wall street journal. They find their deals by having coffee several times a week at the local greasy spoon with other savvy local investors. You’ll typically find them in the back, in the smoking section.

I see nothing inherently wrong with your plan, but instead of advertising for your rehabber, get to know who is building and doing construction in your area. Drive around and call numbers off of signs offering the property. Don’t give out the address until you have it under contract. Talk to people in the local inspections dept and find out who they recommend you call. Go to open houses and talk to realtors about who might be doing roofing, drywall, etc (don’t give them the details of your deal, just learn your market). Go to Lowes and ask who are the contractors that they recommend. Read the local classifieds (NOT the WSJ).

Real estate investing is not brain surgery. Mostly you need common sense and a knowledge of the local market. You could definitely benefit from the next CREOnline conference- picking the brains of experienced investors will help you a lot.

Good luck,

Anne

5

Re: Newbie in distress - Posted by John

Posted by John on March 07, 2006 at 05:16:10:

You seem to have the right idea, but the proof is in the details. You give no numbers, so no one can help there.
My advise is join your local REI group, the networking and info given there can be invaluable. Continue your education, read all you can find, invest in a course or two as you can afford them. I evvy you because I did not get started til late in life. You can do this, it is not easy but if you work at it you will succeed.

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Re: Newbie in distress - Posted by Alvin Teabag Williams

Posted by Alvin Teabag Williams on March 06, 2006 at 23:22:48:

Thanks for the chuckle.

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Re: Newbie in distress - Posted by marc

Posted by marc on March 07, 2006 at 20:15:59:

Is this what you do? I cant imagine anyone in the local building dept giving out recommendations for contractors – that would open them up to all sorts of conflict of interest problems. I dont think the local Home Depot or Lowe’s will actually recommend someone for the same reasons, unless it is their own contractors installing their own floors and windows etc. Is that who you mean?

I agree about real estate agents, esp those who have experience with properties that need to be renovated; they sometimes have good suggestions – it is in their interest to recommend someone good so youll come back.

Etinco, maybe gain some experience first, for example help someone else do a rehab, such as another investor etc. Work cheap; they’ll appreciate it and you’ll get an education, and maybe someone who’ll help you out in the future.

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Re: Newbie in distress - Posted by ETinoco

Posted by ETinoco on March 07, 2006 at 24:00:10:

You might have some advice? I would greatly appreciate it.