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Author Topic: Finding the right environment?  (Read 2435 times)

Offline Jack-of-Trades

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Finding the right environment?
« on: January 05, 2005, 07:08:13 am »
Hi all,

Pennsylvania tradesperson looking to buy my first rehab property.  I have read the following titles:

1) Rich Dad Poor Dad
2) Retire Young, Retire Rich
3) Buy it, Fix it, Sell it, Profit
4) Buying Real Estate Foreclosures
5) Real Estate Investing A-Z
6) Making Money with Rental Properties

What indicators should one look at when investigating a region for possible rehabs?  According to Kiyosaki in his Rich Dad titles he made a large portion of his wealth in investing in the Portland, Oregon market while it was depressed and then moving into the Arizona market with his proceeds.  How did he know the Portland area was depressed?   How did he know the Phoenix area was ripe for appreciation?   Hard data of some sort?

  I know where I currently live has a large number of older homes that are in rehab condition (Older population = deferred maintenance on properties). However, I also know that the population base is still declining for the last twenty years and that if the local government doesn't get over its 'tax and spend' mentality it is not likely to see an uptrend anytime soon.  I would hate to buy into the market with flippers and holders, only to see the market trend down over the next ten years.  Suggestions on enlightening sources?

There are currently a couple of REI clubs and companies in the area.  One wants $5,000 to mentor investors through their first deal.  Seems steep to me (I could make a lot of small errors for $5000, or one big one ;-) ).  The second is a member of the NREIA but I have not had any luck contacting them.  There is also a franchise of the HomeVestors network operating locally (We Buy Ugly Houses).

My general business plan is to find properties that have the right things wrong with them.  Determine the cost of repairs, holding, etc and make offers to purchase.  Once my offer has been accepted I will rehab the property through a combination of sweat equity and bid proposals for the more involved repairs (electrical, plumbing) and either flip or hold depending on the neighborhood.

Offline handyman1977pa

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Re:Finding the right environment?
« Reply #1 on: January 26, 2005, 12:50:16 pm »
I am from pennsylvania also... I think you can find "good" properties anywhere. My idea of what my bottom line profit is might be totally different then any other person on the is message board.  Best thing in my opinion to do is go pickup a free copy of real estate weekly. Look at the different agents some will say "been doing investments for 16+ years" an so forth. Now call them ask them to send you listings in your area. I havent talked to a real estate agent who deals in investments and havent done some themselves. So instead of paying 5,000.00 for someone to help you out have the realtor help walk you through it I can name  alot of them in my area who would do it. But in respect make sure you use them to buy the property and to also sell it. Then everyone is happy.  
« Last Edit: January 27, 2005, 03:59:59 pm by handyman1977pa »

Offline DATAROX

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Re:Finding the right environment?
« Reply #2 on: February 01, 2005, 08:42:16 pm »
You can do well in real estate in almost any market with the right strategy. You are starting out so you might try to flip a few to build some real cash reserve before you start holding long term. I will suggest that you look for one more criteria that you didnt mention and that is find one that is selling under value. Its great if it has all the right things wrong that you can fix but honestly most good flippers including homevestors that you mentioned make most of their money on the front end of the deal. Youve heard the old addage buy low and sell high. Its true so buy as low as you can. To do this you should develop some good birddogging skills. A good agent can help but most of them dont usually hunt for "deals" as much as they look for nice homes to fit their clients needs.
If you develop this skill you can buy homes at large discount and walk into the house in a great financial position without lifting a finger. Then all the fixing up to sell at retail just makes it that much more valueable becasue then its marketable to the mainstream homebuyer.

 




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