okay i really need help with a basic question

in early '07 i will have around 20-25K in hand, two signers for a loan with ficos over 750, and 60K annual salary between the two of us.

we will be looking for a property that we will mortgage with a very low% down, HUD insured loan.

OUR GOAL: to get as much money when we sell it a year later, so we can go use it for a downpayment on a more expensive property.

are we best served with

  • condemned house renovation?
  • ‘fixer-upper’ that needs basic TLC?
  • finding a buyers’ market or a sellers’?

we have no current investments, and 1.5 years of study going into this. we don’t care where in america we go for this, we are only trying to make as much as possible a year after the acquisition upon resale. i’m so confused, i keep reading and reading and reading, and feel i know a lot, but can’t seem to put it together to answer my own question.

any help is very greatly appreciated

Have you joined your local REIClub. If not, I suggest that you start there. Network with the investors and they can help you with your questions. You will also learn about your market. Knowledge and education is a powerful combination.

Good luck.

Take a look at hardship sales.

my local REI club is a joke

the guy who runs it is always trying to get you to buy into his 3K$ courses, and nobody there is very successful at all.

also, the odds of me ending up in my area are slim to none… i am going to go wherever i will have the most success, and i doubt it will end up being my area (but who knows i guess… it’s just once i find what strategy i will pursue, i find the best spot in the country for it. the odds of it being where i am must be infinitely small)

Sorry to hear that your REIClub is a joke.

Where are you located? How close are you to a major city? Maybe someone from your area is on this forum and can help you further.

What is your rationale for getting a HUD insured loan in lieu of conventional financing?

that isn’t a definite yet, it is just the only assured way i know of finding a less than 5% down loan. very well may end up being a more conventional approach, my basic requirements are:
low/no points
low % down

not fully sure what type of loan i’m going for yet, hud is just the best one i know as of now. also, i will be going out of area, so i don’t know what my options will be where i go

There are plenty of programs with 100% financing. Fannie and Freddie both have 100% LTV loans. There is also the increasingly popular 80/20 piggyback loan with no MI. There are low downpayment ‘My Community’ loans as well. HUD is not very ‘investor friendly’ so that wouldn’t be the first place I’d look to get a loan for my property if I were you.

great response, thanks a lot.

again, i’ve been a bookworm in this area for a year. i did several months of unsuccessful foreclosure searching, and have just done a ton of studying. unfortunately i believe, in retrospect, it was misguided. i was reading only guru-type stuff: carleton sheets course, a local guru’s course, ron legrand, etc etc etc; i have since taken a course at my school (that i take my final in tomorrow), and will continue to read through my entire textbook before going back to reading more profit oriented stuff. the textbook has given me a much greater understanding of things, i just haven’t read the chapter on mortgage types yet :slight_smile: , although i just did finish mortgage calculations/equations. very useful, as i would have been interested in interest rates before, now i am aware of things like how much a discount point will effect my ‘ebc’/effective borrowing cost if i only plan to hold a year…

You must be looking to live in this property because HUD only insures homes you’re going to buy to live in. What state are you in? If this is your first attempt I would STRONGLY recommend buying close to home. Now that you’re through all the guru crap, you might consider finding a good real estate agent who specializes in the investor market. If you find the right agent, they will answer all your questions and your path to success will be quick.

yes it will be owner occupied

the thing about investing where i live is a ) i need to get away, i’m 23 and have lived in the same area forever, but all over it. b )i’ve lived within a 2.5 hour radius, so i’ve never been in a place long enough to really feel i know anything about it. i mean i don’t know a thing about my market out here, and i don’t think there’s a ton i can learn here in 6 months while working full time that i can’t figure out in like a month while i’m not working at all (when i first get to where i’m going to go)

yeah i just need to get the hell out of my state for personal reasons… if i actually knew a good deal about my area, or really much at all, it would probably make me think twice, but like i said i’ve bounced between parents, friends, dorms, apartments, colleges, i haven’t been in 1 place for a helluva long time since i was old enough to even understand the first thing about realty.

i’m a ridiculously fast learner when i try, i am not terribly worried about learning about the market that i plan on going to. i’m not saying i’ll be a pro, but i will have months to research it from the internet/other sources, and a little bit of time when i get there.

Oh, I see. That makes sense.
Just starting out I think it’s important to live in the market you’re investing in, wherever it is. Not only does it help to know the market, but being on site from time to time during a rehab wouldn’t hurt. Much of what we do as investors is managing relationships. It’s just easier when you’re there.