when i search for a deal what are the main details that i search for.i dont know where to start. i look at houses in papers and drive bys but is it true that i can tell a deal by just looking at the details. i just want to understand what to search for so i can know if their is profit in the deal and if its worth my time. thank you
Branden
Before you start looking you need to know what you are looking for. If you are looking for a wife you need to know if you are you looking for big breasts, long legs or smarts. (In my case I wanted all of it) You don’t just walk around and marry the first female that asks you. Real estate is the same. You need to know if you are looking for rental property or buy fix up and sell or land to develop.
What I did was found out by using the MLS that houses that rented for $1000/month and lower stayed on the market less that a month. Houses that rented for $1100 to $1200 stayed on the market 1-2 months. That told me that I wanted to buy a house that I could rent for under $1000/month. I then found out what was renting fast. I found that in my area a 3 bedroom 2 bath 2 car garage over 1500 sqft moved the fastest. They rented instantly. So what I needed to do was find a 3-2-2- over 1500 sqft that could be bought and rehabed low enough that the note could make me money if rented for $1000/month.
I would find out what works where you are. I used the MLS that I bought access to using a service here in my hometown. You may have to get with a real estate agent and run them through rents, and solds, days on the market etc until you understand your market.
And once you think you found they type of person you’re looking for you might have to ask 100 people to go out with you before one says “yes”.
(Investors who make offers, get deals…)
What kind of service sells access to the MLS?
Keep this in mind also when comparing the houses and their rents. Are investors buying these houses? If I have some money, credit and a desire to own my own home, this is a perfect time to buy a single family home. There is a HUGE difference between an investor and a homeowner. The homeowner is paying all the expenses out of his pocket. The investor wants the expenses paid by the property and have money leftover. Bottom line. Don’t worry about what other people pay for properties. The actual and true numbers of the operations will always tell you if it’s a good deal or not. If you know how to read the #'s it’s pretty easy. If you don’t know how to read them, that tells you that you need more education before looking to buy properties. Be patient. It will come.
Mike
Thanks,
i guess thats where im not so great at. ITs reading the numbers. everyday i have been reading articels and books, and i know that its a lot of info, but im not giving up so what topic should i read if i want to understand the numbers.
Branden
You have a lot of good members here that can give you ideas. But if you want to study something that shows you how to analyze the numbers and breaks them all down, herer are 2 books that give you a start. I think I may have told you this before,but I can’t remember. Anyway, read " The Millionare Real Estate Investor" by Gary Keller. Read it as many times as you have to. It has proven models developed by over 100 RE investors. Then read “The ABC’s of Real Estate Investing” by Ken McKelroy. He breaks down the numbers well also. These books will also help you devise a plan for what you want to do. When you have a plan, you then assemble a team. These books will show you that too. When you have a plan and a team. You’re ready to start. Keep in mind that your learning will never stop.
It only works in Houston but this is who I use,
https://www.realdata.net/index.html
If you click on the sample for AVM you will see what I use to value the houses.
Bluemoon,
How much do you pay monthly for the AVM service?
I pay $125/month. I don’t sign up unless I am actively searching for deals.
1 thing that I can tell you, just to be on the safe side, is figure out what the 1st time home buyers market is like in your area. What type of properties they end to go for, which areas, and the particulars like beds, baths, sq ft, ect…
As we all know, that particular market never dies, so when I’m doing deals, I always make sure the ARV of my deal fits in the price range of what the first time home buyers usually qualify for.
Thats why I never really have a tough time selling when it come time for my flips, even thought I’m in the ultimate buyers market (Michigan).