Hi folks. I’m new to Real Estate. I’m looking to learn about Real Estate investing, but looking to purchase my first home before aquiring any investment properties. I found a property locally that is a possibility for purchase, and was wondering if I found a good deal. After researching the property info, it turns out it is listed at $115,000, but the 2006 property appraisal is set at over $150,000 (up from $137,000 a year ago). If I were to purhase this property, would I have a better chance at gaining financing because of the huge difference in the appraisal value? And would this mean I would have nearly $35,000 in equity from the get-go? The county records list the owner as a Bank in California. Is this property a foreclosure? While looking for my first home I’m practicing using all of these resources to put to use in finding deals for imvestment properties. Is this one of those deals? Thanks.
if it says that a bank owns it, yes it is a foreclosed property.
depending on your local market there, the tax appraised value of the land and structure, could be more or less. what does the local market suggest? what are similiar houses going for in that area?
if market suggests 150k value - then that’s pretty good (over 20% below market). for your personal home, that’s a really good start.
you cannot rely on county tax records alone. you have to get the market info. a good realtor can furnish a CMA on the property to give you an idea of the value. make sure the CMA is tight too. sometimes a realtor can really give you crappy data. Comparative Market Analysis = CMA…
I agree with TMCG. To define crappy, your agent needs to compare like properties (size overall all look age and construction techniques) and they need to be from the same area. You also don’t want sell datat aht is over a year old.
Where are you located?
I am located in Wisconsin. How large of an area would you consider local? Same zip code? There are very few houses in the area that are this small, so I don’t think there is much to compare to. Also, the most rescent sales transaction for this particuar property was from 4/06, for 123,500. So the current asking price is less than the rescent sales transaction from April by 8,500. I can look at property info on the county gov. website to find my own comps, but I’m not sure what size area I should include. I’d assume I should be looking at similar neighborhoods. Would the similar tax assessments give me an idea of similar market values, or is that completely different? Thanks for the help. I’m a journeyman carpenter who loves fixing up houses but hated the commercial construction I was doing. Now I’m going to school for my associates in Civil Engineering/Surveying. After this I’m thinking of taking some classes on Real Estate while working towards my Registered Surveyors License, so I can put all of my assets together and put them to use. If I can find 'em, buy 'em, fix e’m, and sell 'em, maybe I can make a little money. Looking for deals and trying to determine a homes potential gets my blood flowing. Is investing in my blood?
If I can find 'em, buy 'em, fix e'm, and sell 'em, maybe I can make a little money.
that’s the end all/be all - IF
more than likely, you will be able to do this just based solely on the fact that so many others are doing it.
it comes down to knowing the market you plan to invest in. is it selling…or if it isn’t, is there a high demand, but low supply. over the past 10 years here on Long Island - i’ve seen it all. and i just started really getting into real estate in the past year.
but 10 years ago, you couldn’t find a house for sale, but people were looking more and more. no one was really selling. people had owned their homes, like my mother, since the 60’s and weren’t going anywhere. after 2001, HELLO.
rates dropped, the population had a lot of people approaching retirement and WHAM. within 4 years, supply met demand, but did not overtake it and rates were LOW LOW LOW.
everyone in there mother started selling, but it had balance. the result - sick appreciation. a house in 2000 worth 185k was now worth 400k in 2004.
NOW, that 400k house won’t sell for more than 360k and lower.
this is knowing your market. but as an investor, which i would consider myself a work-in-progress investor - you’ve got to work that much harder or network aggressively to find deals. here on LI, the foreclosure market is sickly competitive. unreal.
but in general, i know that the market here is not selling. houses are sitting and i’d say, from what i’ve been looking at (tracking 10 houses in 5 different areas) - the average is over 8 months and more near 10 months. i know a few investors who rehab and sell and they’re sitting dead in the water right now, with projects approaching the red and the kicker here is, you can’t just turn around and rent’em…
i mean you can, but you’re not even going to come close to breaking even. alot of people here just slapped down 300k for a rehab, thinking they’d be in and out for less than 10k with a quick resale of 390k and the market just took a dump on em.
Erik, it’s awesome that you’re motivated and have a good sound plan and approach. just get very “cozy” with your market. it really doesn’t take a whole lot. it’s basically just driving some neighborhoods, working with a few realtors, reading the classifieds and if you want, joining your local reiclub. it just comes naturally. now, if you plan on investing in another part of the country, or at a long distance, well then that’s harder, cuz you don’t live there. but in your local area, trust me, it’s easy.
also, go to your local court houses or clerks office, find the public administrator office and get on a list to be contacted regarding estate sales and other auctions. check your legal notices as well. get familiar with foreclosure proceedings. subscribe to a few papers.
what are you sitting there for? go man, move it, move it, move it!
go out there and kick ass man!