First deal on the table.

Rehabbing, Fix and Flip, Rental Properties
1

First off, I love forums. This one is my new favorite. Thank you all for the great insight I have snatched from your replies.

Here is where I was:

27 years old. Car nut, pumping all cash into my hobby, good with my hands and little to no debt, a small salaried position and the realization that unless I made a change soon, I would be poor forever. Great credit just not a ton.

Here’s what I did:
Cleared out all debt. Sold off car assets. Saved $ like crazy. Simplified my life. Cut costs. My lifestyle cost me about $500 per month. That’s it. That’s with rent.

I had some Retail Brokerage experience and had always loved the idea of real estate as a life catalyst. I began buying audio books on the topics and listening to free podcasts and voraciously hunting down informational sources online and locally. Got an IPHONE. Best choice ever for productivity. Plus it was free.

Hunted my area. Walking with the dog, looking at property searching them all on the IPHONE is a great way to kill 3 birds with one stone.

I found a foreclosure less than 2 blocks from where I live that has been with the bank for over 6 months now and had one old offer rejected months ago. Details:

City appraisal = $69k
NOW asking = $34k
Rejected offer of $24k when property was at $42k months ago
Decent area, next to a bar, by public transport and major thoroughfares. Adjacent houses appraised at $80k-$150

I am working out family financing with an out of state aunt and uncle who are willing to put up the CASH offer offer to prove funds to tie up the property. I was going to offer $25,500 or 75% of asking price. Inspection is next.

Any initial thoughts? recommendations? You should do this/that? Don’t do this? Anything really. I’m just trying to flush out all the potentials on my first foreclosure, hell, first home.

I would live there for roughly 1-5 years then rent it once paid off and in good shape. My full rent is $700 and this should fetch $600 per month.

If after the inspection, it is sound enough to rent right away, I would potentially do that.

My ultimate goal is to rent and hold with occasional sales.

2

How did this turn out for you?

3

Well we learn a lot on the ones we pass on too right?

Turns out we are paying too much in rent. We are on the upper end of rates meaning the condition and location will not make it worth the amount I thought originally. Cheap lesson.

The location while unique, isn’t the most family friendly. I think it would have had plenty of vacancy. The price may or may not have been good but, looking at more info on this site and reviewing the formulas and examples of “good deals” I needed to keep looking.

At this point I have doubled my cash and tripled my knowledge. I am going to be writing out my plan and going step by step as to how I am going to get there. Any blanks I can’t fill in will need to be addressed.

3 hours per day, everyday. That is my educational regiment when it comes to learning about real estate investing.

More deals will be found and passed on. Eventually, it will be right. I am learning what “right” means.

4

Good job Milwaukee on passing on a deal and most importantly LEARNING!! If you find 10-20 deals like this then you can cherry pick the best deal. There are tremendous deals out there and will be for the next 3 years or so. If you learn how to get lots of prospects like this deal into your pipeline, you will always have great deals. Best of luck.

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Description:

iREI stands for iReal Estate Investment. It is a tool for analyzing potential rental properties as investments. Enter the property value, closing costs, monthly rental income and all other costs associated with running the property and iREI calculates your Annual Income, Annual Return on Investment, and Break Even Monthly Rental Income.

This is a useful tool for real estate agents who want to show buyers these statistics on the fly while at the property or to make these calculations quick and easy any time! Email the results to yourself or your client with the click of a button! Also great for personal use!

http://itunes.apple.com/ca/app/irei/id380604691?mt=8