I have a little bit of a dilemma. I’m currently a university student who is obsessed with real estate Investing. Although I haven’t made the plunge yet, I 'm planning to within about a year and a half after I’ve completed my degree and obtained a real estate license.
The problem I have is trying to decide whether or not I would be able to make a career with this in my market. I hear alot of people saying that a smart investor can make money anywhere and anytime in any market.
What are some ways to determine whether or not the market in which you live will support the career of a rehabber?
Also, is there anyone on this board that is a fulltime rehabber?
you might want to check out michigans tax auctions. we bought a property at auction last summer for 7,000. ( a three unit ) put 20,000. into it and now it is rented and brining in 1200. per month. it is now worth about 100,000.
we bought another property a month ago for $4800. we havn’t yet decided what to do with it because its 21/2 hr drive. we talked to an agent who wants to list it as is for 19,900. if we put 15,000. in it it would be arv about 42,000.
i think being in ontario, you may be close to michigan, if so check out their state treasurers tax auctions
Hey sorry I didn’t answer just saw your post. I am in Genesee County. Actually Oakland Co. is literaly down the road. We live in Grand Blanc. We have bought at the Genesee co. auctions I have been to Roscommon Co but didn’t buy and in August we tried the west side of the state in Muskegan. So far I’m happy w/ the auctions. Will definetly keep going.
As you know our economy right now is well…horrible. It didn’t effect my business until recently. Unfortunately, I’m not sure if we’ll have money for the rehab of the Muskegon auction, we have it listed with an agent and are hoping to drop it quickly.
I would love to rehab it though.
The auctions usually begin in July. Let me know if you need the website.
I do drive by’s (sometimes sneak ins) of all properties I plan to bid on.
I live in Midland County ( MI) . The tax auctions are conducted by the county here and so far the pickings have been slim. I looked at one that I considered bidding on but the home was in very poor condition. Most tax action props in this area are land only. Very few with homes.
I ,too, am considering going full time as a rehabber in the near future. While it is true the economy in Michigan sucks, there is money to be made here. Everything is realtive, buying price and sales price.
My understanding is that counties in Michigan can opt out of the state - conducted tax auctions, which is what Midland has done. They hold two auctions a year at the Midland County building.
here’s the web site. http://www.tax-sale.info/
Let me know what you think.
No knew auctions in Michigan until July.
I need to find the web sites for other states as word is spreading and many states have decided to consider this method of regaining lost revenue.
It looks as though we are going to need to rehab our last auction property which is actually probably for the best.
We had an offer for 6,000…ha
If we rehab it we’ll rent it out until the market returns, and eventually it will.
Keep in mind that most of these homes do need a complete rehab. We purchased ours for 4,800.
It needs…new roof and some trusses, siding scrapped and repainted, new windows and doors, plaster wall repair, carpet, paint, new kitchen, and bath rehab.
So for approximately 18,000. and ALOT of elbow grease we can make it a go. The properties that may not need all of these things do sell for more.
You must know your budget and what knid of time you can spend.
I’ll keep you posted as we begin work and let you know the outcome.
I am not a full time investor but it seems to be headed more and more that way. I have sold real estate for the last 6 years and up until the last 2 years I was making my clients rich. Then one day I thought why not just do it myself.
Now I will make over 6 figures rehabbing and wholesaling, and over 6 figures selling, but I like rehabbing alot better than regular selling. Essentially I could be a full time investor but why not follow both career paths as they seem to intermingle quite a bit.
I live in Michigan (kent county), our market is terrible but there is still plenty of money to be made. I closed on 2 homes Monday one I got for $18,500 plus I get a $1250 commission on it so essentially $17250 and I have it sold as is for $33,000, to a cash buyer.
I picked up another 3 unit that sold 2 years ago for around $87k, I got it for $36,000
I close on another one this coming tuesday, I thought that I had it sold for around 42k to another buyer but I lost him, so now I am selling it on a 10 year lease option with $4,000 down for $53k “as is” and i am getting it for $30,500.
The deals and buyers are out there you just need to know where to look.
If I were just starting I wouldnt quit my day job until I had a great knowledge of my market, a great buyers list, and enough cash to live for a year without making any money.
I still consider the land lording and rehabbing I do to be my hobby.
In the Michigan market if you have alot of money to play you could really make some money. Our market has gone from many who have ownership to many who need to rent, or buy creatively.
Unfortunately my and my husbands primary businesses are beggining to take the toll of our slow economy so we don’t have as much to invest.
Wow, a bunch of people from my old neck of the woods. I grew up in Flint, Michigan…and now live in Arlington, VA just outside of DC.
I am a full-time rehabber…now developer. If I lived in Michigan, I think I would go after “Subject To” opportunities and rehab and sell them, or lease-option them as an exit strategy. Short sales, subject-tos and lease options are a great way to gain cash flow in this market.
Rehabbing is a great way to learn all of the true costs of real estate investing, but it can be stressful. People think I am rich because I am writing big checks all of the time. It’s the bank’s money…not mine. I do get big paychecks once every six months or so, but it is stressful to not have consistent cash flow.
I currently 23 units underway…with my next paycheck being more than 5 months from now.
To me, the perfect balance would be to develop about $10K per month positive cashflow and do 10-20 deals per year that make at least $50K for my share of the profit.
If you are currently in school I would personally not jump right into real estate full time. Some people have a more risky approach and some people try to minimize risk. Both strategies can work well. Personally I would get a job. This will give you some cash to work with and an income. This will help so that if you find a property you will be able to have a down payment and a lower interest rate since you will be less risky when banks look at you to give you a loan. After doing a few rehab projects if you are successful you can move into doing rehabbing full time. If you are looking in different areas that would make a good market instead of staying where you are and buying a property somewhere else I would move. It makes it easier to have a good understanding of the market. I dont know about too many potential market. I live in Austin Texas and the market is pretty strong down here.
be VERY careful doing tax auctions, especially in Michigan. Most title insurance companies will NOT insure tax title properties, unless and until you jump through a billion hoops, and/or do a Quiet Title Action in court.
My advice is to take advantage of your current situation and buy a house to live in, and fix it while you are living there and going to school.
This is how I originally got started in this business. I bought my first house (primary residence) when I was 21, and because I couldn’t keep up with the mortgage by myself at the time, I converted the upstairs to an apartment and rented it out while I fixed the rest of the house.
Then after the house and the yard was all tightened up, I sold it and made a $35k profit. This took me about 13 months total from close to close.
Because you are a student, and a first time home buyer (i assume), you can qualify for some really affordable financing (possibly 100%). And believe me… they are giving loans away to just about anyone these days.
This exercise will give you the ability to practice your negotiating strategies to buy, give you an opportunity to learn how to rehab, learn about your market, and give you a place to live all at the same time.
If you buy it right, and sell it right… you could pay off all your student loans when your done with school. =)