OK. I am glad I found this site because I have read way too much, and need to put it to use. The problem is simple, how do I make that first step? I found a vacant property that is listing with an agent for 130K in Houston. The neighborhood is ok, but I’m not sure I would live there. The way I found it was in a smaller publication where the owner put his own ad and is selling for 116K. He says he has a deal with the agent that if he can, he will sell it himself.
Here are my questions?
How I can I reliably find out the market value of this property?
How would you suggest financing this with as little out of pocket as possible? I have good credit.
Should I rent? Try to flip?
I want to do the paperwork myself - where would you get the contract, etc?
I realize these are basic questions, I just want to make sure I am covering my bases as best I can. Where do I start?
The property is almost irrelevant in the beginning stages. The situation and the seller’s attitude about the situation is where the process begins.
Yes, later you may get into analysis of the neigborhood, schools, amenities, potential curb appeal, etc., but initially it’s not important.
Don’t look for properties - look for situations/problems where your knowledge adds value.
Now, to your questions. To find comps quickly, ask an agent. The rest of your questions and comments indicate you’re not ready yet. In my opinion your goals, finances, and investment strategies help determine the potential exits, not the property.
I’d definitely recommend not holding anything until your knowledge level increases. I’d also recommend not doing the paperwork yourself if you don’t know where to get the docs.
If I were you, I’d slow down a bit. Attend your local club meetings, network with some doers, and see if you can help out or hunt for properties for them.
This is a long term gig so there’s no hurry. It can be a short term venture depending on your initial mistakes. Don’t let the desire to “just do it” force you into a bad choice. I still make mistakes frequently, but REI is very forgiving over time. The operative phrase is “over time”.
I just joined this forum couple days ago. What Tim suggest was great, you need to start slowly.
However, I hope my answers to your questions help you find some useful infomation.
How I can I reliably find out the market value of this property?
You can go to HCAD.com type in the address of the house to see what value its appraised at /property tax for the past year, look into the address nearby to see how much the surrounding houses appraised at, look also into how much those houses sold for in the past year, it will not be a complete comps list, but it will give you some ideas.
You also can get some comps from HAR.com and try also in Bankof America wedsite, you will find some comps there, just type in the area… I hope this help
How would you suggest financing this with as little out of pocket as possible? I have good credit.
If you plan to keep the house as an investment (rental home), you need to be prepare to have 10% down payment inorder to get a loan as an investor. And be very carerul of how you wnat the deed to be written, use a company’s name or use your name which will make you liable for anything if you get sue… a lot to learn in this area. If you plan to flip, you need to consider the income tax, many investor use a corporation to do flip homes and pay 15% tax or so. if you plan to keep the house for rental, investor use trust and LLC to handle the property… you need to think this ahead of time before you purchase…
Should I rent? Try to flip?
depends on how much you know, how much repairs are needed, what’s the cost and how much you make after you sell in… if you rent the ouse can the house produce positive cash flow base on the rental in that subdivision? Positive cash mean after you deduct your monthly mortgage payment, Insurance, taxes, maintenance… still have some cash to put in your pocket …
I want to do the paperwork myself - where would you get the contract, etc?
You can get the TREC contracts from TREC website, it has a lot of other contract forms too but you need to be very careful in using them, make sure you understand the contract completely else you need to get someone who can help you… since you want to deal with the seller yourself, you need to know a lot inorder to do that BY YOURSELF, I would strongly recommend you toget some help… Like Tim suggested, try to attend seminar, workshop, join realestate club etc…