Looking For 1st Deal
Been driving neighbohoods, looking in newspaper, internet, MLS, but having a hard time finding for-sale property even close to below MV. Is it necessary to find that 15-20% below market property to be successful. Rents on houses in my area are very high in comparison to some other places.($150K house for $1300/Month) Even if I paid Market Price, with depreciation, mort interest, and appreciation, it seems I am still coming out ahead. What am I missing?
I understand your approach but most of hte 15-20% below FMV is going to come from you calling and talking to people or them calling you. If you live in an area with high sales, then it may not happen as much but doesn't mean it can't happen.
Of course, also depends on your focus and what you want to do. If you are trying to lease-option, then the 15-20% may not matter as much if you can charge a little higher rent and then a good profit on backend. If you are looking to buy straight out to make profit on front end, then may not work. Most homeowners are smart and know what things are selling for around them or they get led by agents. Starting pushing the boundary areas you are searching now and move more towards the fringe, that should help plus it should also allow you to keep the rents right and sell at a good costs.
Good luck and hope that helps some,
Christian "The Solutions Kid" Beebe
[addsig]
Thanks, Solutions for youe input. Although I am relatively new to this area, I have never lived in an area that the general population was so real estate informed to the extent it seems it is keeping the prices up high. I am content to buy and hold to the extent I can use to tax savings to offset my earned income and pay the mortgages of these rentals.
If the deal is good, paying closer to fair market is OK. Example...my third rental that I am buying. The seller is holding a second mortgage at 6% with interest only payments, splitting closing costs 50/50. Money out of my pocket will be less than 2k including closing costs. For me it is worth it to pay closer to FMV for this deal, as it is costing me little out of pocket. As I will hold the property for several years, I get to reap the benefits of ownership (rent, taxes, appreciation etc) and do not have to structure the deal to make my money up front.
Thanks Clevincc, curious though. What kind of term did you agree to for the 6% interest-only sell note? I have been seeing non-occupied 95-100% loan programs at 7-7.5% 30 yr am. Any thoughts on carrying that high of leverage when trying to build a protfolio of rental properties? Or does it come down to what the projected cash flow will support?
Can I have the phone# of these lenders with such great rates. I live in the New York area, and I have never seen rates like that. Thanks
I don't know if it is a State specific program, but go the lender tab above and check them out.
Quote:
On 2003-11-18 15:36, elissnurse wrote:
I don't know if it is a State specific program, but go the lender tab above and check them out.
Where is the Lender Tab?????
the green tab at the top of the screen "Lender"
Property values down here are absolutely insane, proportionately. The ONLY way I've been able to find anything close to 30% off FMV is by calling preforeclosures. FSBOs sell only slightly slower than realtor-listed properties, and for almost the same price.
Have you tried the "active adult" communities? It seems awful to say, but in this retirement haven, there are a lot of out-of-state relatives having to offload Grandma's house when she passes.