Posted by Tim Fierro (Tacoma, WA) on August 09, 2002 at 15:53:14:
Chip, I see you already checked out PCI and signed up, hopefully you will be at the next meeting. Just ask the beautiful, georgeous, little hottie at the front desk to point me out to you.
Light fixers are easier since you can gage fix up costs easily. Houses with major problems take a bit more knowledge of repairs to get a grasp of what your total ‘rehab’ costs are going to be. But no matter the type of deal you find, or search for, it still comes down to how you will purchase and/or tie up; and that requires a motivated seller willing to leave dollars on the table for your profit.
If you find a home for $100k, needs $2k cleanup, it has a FMV of $102k, and the seller wants all cash and will not budge; that is really a retail deal and there is no profit for you.
Another aspect to keep in mind is your exit. You say you would like to resell, so you will have holding costs while you wait for your buyer to cash you out. These holding costs need to be rolled into your overall purchase price. Get to know your area: Tacoma, WA (City of Destiny, America’s Most Wired City, Kitty Litter On A Stick Capital Of Glass), so you will know what is a deal, and sometimes more importantly; what isn’t a deal.
Another thing to consider is how you will purchase. You have a motivated seller, you have a deal that inks well for a profit, you can get the repairs/cleanup accomplished, you know your market and how long it will take to sell; but do you know how you will actually take title of the property?
Yes, sweat equity buying is a good way to get started. But along knowing what kind of properties you would like to find, you also need to know the above things to able to close the deal and get to that point everyone wants to get to; The Check With Your Profit On It.