I am new to the game and have a couple questions for you more experienced investors. 1) I am looking to buy my first home, have 6 months on my current lease, and was curious if you think REO’s were a good avenue for a first time buyer? 2) My buddy and I are looking to begin investing in real estate for the long haul. Starting with single family homes and working our way up. Do you think REO homes are a good idea for such a long term goal? Do we need to try and play the preforeclosure game as well? 3) How did you all get involved and get your name out there to lenders, realtors, etc? 4) We are both very lucky in having large investors who have already given us the ok to find them deals and get paid a percentage of the deal when they sell. How would you personally go about using this avenue of financial backing?
Sorry for all the questions, just very green and looking for whatever ideas you may have.
I would say yes to reo’s. Or any other option for the right price. Don’t get locked into one idea. Read, research, listen. All your answers are on this site. click on the search button on top and type any question you might have. Every question about investing in RE has been asked by someone else.
That being said, If I was young and single and eager I would find the cheapest dump I could find, live in it while I fix it up then sell it for a hefty profit (or pull the equity out) then do it again and again until I got to a point where I no longer have to sell the property I’m living in. but now I am still investing. Will this take time? yes. But it will be worth it.
Yeah, I am 25 and single, so living in a dump is no big deal for me. I have a great job right now, but I know that I’m never going to make it big on pay checks alone. Thanks a lot for the information. I have been reading this stuff day and night for a while now. Just ready to make a move and not just reading it anymore!
I just think that REOs would be a good avenue to begin with? I plan on starting there, but also plan on making investments in mulit units and raw land (my father’s specialty) but I have to walk before I run.
TWP - my 2 cents (coming from someone with little experience)… If you are renting right now, the first thing you need to do is stop renting… In my mind it doesn’t make sense to think about real estate investing while you are renting from someone…
Having said that you could find a duplex, live in one unit and rent the other. If you buy at a discount, you could probably live almost for free…
Another option is what Makethemoney said… find a property that needs work, buy it, start living there, fix it, and sell it.
The other thing I would do is to be really careful about who you do business with. Remember that doing business with a buddy may seem very good idea now. But if you and him don’t have the same goals, energy, focus, etc what looks really good now may become a nightmare… Just be careful about who do you chose for a partner. Sometimes is better to not do a deal than to do a deal with someone that you will have problems with. If you ask in this site, I am sure a number of people will tell you stories about partnerships that didn’t work…
Hey I don’t want to discourage you… Just be sure you have all your ts crossed and is dotted… Good luck!
Yeah, I understand what you are saying. Not taken the wrong way at all. The reason I have yet to buy a house is because of my work situation. Been in a training phase for the past year and a half and have moved three times during this time. However, I now am firmly planted in my territory and willing to set some roots down.
As for my partner, our partnership is more based on ideas and shared interests. We are both very driven and willing to do the work that is needed. But we are not full partners in business. We will both do our own deals and have our own companies. I guess I should have used my wording differently. Thanks for the heads up though. Any and all advice is greatly appreciated!
You happen to be coming into your home purchase (and RE investing) at an ideal time. In the past, pre-foreclosures were more appealing to me, but now that the foreclosure market looks like the episode of The Chocolate Factory on I Love Lucy…too many chocolates to eat…too many REO’s to handle from the banks’ perspective, we’re in a phenomenal investing time.
If you’re going to be living there yourself, make sure you choose a good, solid neighborhood, where your liklihood of resale down the line is strong.
When you start writing offers…they should be embarassing offers. If they’re not, scratch out your offer price and go lower. See what the market will bear and absolutely go for it!
Good luck and congrats on preparing to move forward in your new adventure!!
Stacy, thanks for the input! I was reading some posts on here and saw how some people were making great deals using cash money on REOs. Something like 60% of what they were asking for and the banks were taking them!!! I might have read it wrong but I was thinking that if banks really are overloaded with inventories then it would make good money from the get go. Either to rehab and sell later or to hold and rent out. Does this make sense to any of you more experienced investors? Like I said earlier, I have some big backers if I find the right dealns and this seems to be a good idea or at leat along the lines of the super low offers you were speaking of. Thanks again for the help.