New potential rehabber

General Real Estate Investing
1

I’m a young woman who is interested in rehabbing and possibly renting if the rehab takes time. I have been searching MLS for homes and I’m not sure what to look for “exactly.” I know there are many books out there about this but I was interested in any advice some of the seasoned-successful rehabbers/renters might have for a newbie.

Thanks :biggrin

2

Virtuous1,

From reading your post, I don’t think that you’re ready to be looking at houses to buy. Before you think about buying anything, you need to get some basic REI education and you need to learn your market. The Carleton Sheets program is a good basic REI course and can be purchased inexpensively (dirt cheap on E-bay). To learn your local area, I’d suggest going to look at (without the intention of buying) a bunch of houses in your target investment area . Looking (inside and out) at 50-100 houses that are for sale in your area will give you a good idea of the market values of properties in your area.

REI isn’t as easy as it seems on the infomercials. The VAST MAJORITY of newbies fail. Some serious study and a lot of work will be required if you are to be successful.

Good Luck,

Mike

3

Thanks so much. I’ve actually looked at a good amount of houses. (Not a hundred though) I’m going to take your advice about the literature and looking at more properties. Anything else?

Thanks again

4

Yes, as you come across topics that you have a question about, use the “Search” function at the top of this page to search the archives of this forum. It is extremely important that you understand the real world expenses for whatever investing strategy you undertake. The number one reason that newbies fail is lack of cash flow, which is caused by not understanding expenses and/or overestimating income. For example, if you watch those silly “flipping” shows on TV, you might think that the difference between the price you pay for a house (plus the rehab cost) and the sale price is your profit. That’s ridiculous, but it is what a lot of beginners think.

Good Luck,

Mike

5

I’m a newbie as well, but I can tell you that preparation will be key to me succeeding. I have read almost 10 books and attended my local REI club. I ask lots of questions and am trying to absorb as much info as I can. I haven’t even looked at one property yet, nor do I intend on doing so for several more months.

Why?

  1. Because by the time I am up the learning curve, the whole dynamic of my local RE market may have change. Why waste my time looking at properties now when I am not ready to invest now.
  2. Do I really know what I am looking for? There is a ton of properties out there, but if i haven’t nailed down the criteria for what makes a successful rehab, then I am just spinning my wheels. If I can’t analyze what qualities a comp has, and what a rehab needs to get there, as well as their costs, whats the point of looking?
  3. Why look at properties until you know what you are doing, have a competent team together, know the cost of materials and labor, have a network of people, know what my financing options/costs are?

Looking at properties will probably be the last step in my learning curve. I want to do this right. I know a lot of people who begin that don’t do their due diligence. Hopefully I will buy some deals from them. This business seems to me to be about proper planning. Many have said this before me-- but, you make your money when you buy. It seems like newbies fail because they buy houses for more than they should, they have problems budgeting correctly and they further screw themselves by trying to make up for the bad purchase and budgeting by jacking up the asking price to a level based on cost.

Just my $.02.

Brian