Some advice for first time home buyers from someone who's been there.

General Real Estate Investing
1

I’ve been investing in Real Estate for over 20 years and made a very good living from it. Mostly from buying and selling single family homes.

Here’s my advice to ALL first time home buyers…

You’ve got ONE SHOT to do this right…If you do it correctly the first time…It will pave the way to a VERY BRIGHT future for you and your family…Do it wrong (or like MOST people do) and you won’t be buying a HOME, you’ll be PAYING a 30 YEAR SENTENCE!!!

My first advice for any new home buyer is this…

S L O W D O W N.

Learn your market…Pick very specific neighborhoods you like and TARGET THEM…Send out post cards to EVERY SINGLE home in that neighborhood. Tell these people you want to BUY, will look at anything regardless of condition, and can act QUICKLY. Put your name and number on the cards and start mailing. BUT… Expect to wait 6 months to a year before anything happens. This is NORMAL and it’s why most people just GIVE UP!!!

If you want to be REALLY aggressive, run an AD in the small local penny saver or town newspaper. The ad will have to run for AT LEAST a YEAR before you get a response. (It could happen sooner, but the BIGGEST mistake new guys make is PULLING an ad before it has TIME to work)

While you wait… you learn, TO THE DOLLAR, what houses are worth in your targeted neighborhoods. You go to EVERY OPEN HOUSE…Take notes on everything, even what OTHER people say about the home…Make notes of ASKING PRICES VS SELLLING prices. When you marketing pays off and you get that phone call ask what they want for their house. NEVER OFFER FIRST…YOU may be thinking $50,000 is a STEAL for this home. THEY may be thinking if I can get $40,000 for it I can move somewhere warm!!!

I’ll give you one guess how I learned this???

NEVER make the first offer…EVER…

If you do this right…Your first home should be a HOME RUN…Your first HOME must be a HOME RUN…It’s the foundation for your investment FUTURE. If you find a home for $40,000 that needs $10,000 worth of repairs but THEN is worth $100,000…YOU DID IT CORRECTLY!!! You DO NOT end up in the situation almost ALL new home buyers end up in…Owning a new home with very little equity and BIG DREAM$$$ of making improvements. Any equity these people HAVE gets pulled out to REMODEL the bathroom, Kitchen, ect. At this point they’re LOCKED UP…The house owns THEM.

And it’s a 30 YEAR SENTENCE!!!

Be SMART…You have ONE SHOT…

Act accordingly!!!

My best deals ALWAYS come form people who NEVER LISTED THEIR PROPERTIES!!! I was the ONLY person who knew that home was even for sale.

That’s GOLD folks…PURE GOLD!!! But you gotta DIG for it!!!

2

This is good advice to the newbies. Buying right on your first deal is the key to whether you will end up becoming a successful investor or a failure from day one; and most of the great deals come from houses not for sale.

Find people problems and you find deals. You will likely look at 50 to 100 properties until you find that 1st real deal. Look at many at first so you can learn what a deal is and what a deal isn’t. Be patient and Go Slow as fdjake says.

Come here and post all of the numbers (purchase price, rent, after repair value, etc.) on what you think is a deal and we will honestly tell you whether you have that gem or not.

3

why are unlisted houses the best deals? Why would a person want to sell their house for really cheap when they could just list it and get more potential buyers and basically higher selling price?

4

You are looking for problems. They probably have a bunch of judgments that you will have to negotiate and they think they can’t sell the house due to that.

The house could need 10-20K in repairs and they think that who would want a piece of crap that you couldn’t actually live in.

It could be a landlord who doesn’t want to pay a realtor 5-6% to sell the house for him.

It could be you are mailing out of state family members of a diseased relative and they don’t really know what to do yet. They think if you give them a fair offer they will sell it. You position your offers to seem fair with exaggerated costs to repair, etc.

Maybe it is a divorce from probate court records you got and you are the first person they are talking to.

Vacant houses are all over the places in many towns. Why don’t they just sell them? Because each house has it’s own unique problem. You find out what that problem is and fix it.

5

This post was put together very well with alot of good information. :beer

6

This is one of THE MOST asked questions I get from new guys.

It’s actually an excellent question because it gives us great insight into the MIND of the new Real Estate investor. Let’s take a look…

The first thing you need to understand about REAL ESTATE is this…

EVERYTHING YOU’VE BEEN TOLD IS WRONG!!!

Sounds crazy doesn’t it??? But upon closer examination we can see this is a completely true statement.

Let’s start with the quote from above…

The REASONS people sell properties DIRECTLY to guy’s like me and HOOCH is LAZINESS…

NEVER…EVER…UNDER ESTIMATE THE LAZINESS OF YOUR FELLOW AMERICANS.

I’ve purchased homes and did NOTHING TO THEM…N O T H I N G!!!
and sold them for 3 times what I paid. Last year I purchased a home in Roanoke Va that was completely FILLED with a lifetimes worth of JUNK…And I mean FILLED…Squatters had gotten into the house and crapped and pissed all over it. The owner was a moron that just left this once beautiful home to ROT. I purchased the home directly from the owner for $8000 and immediately LISTED it with an agent. I did NOTHING TO IT. It sold 2 weeks later to an investor for $29,000. It wasn’t a pile of money, but it sure as hell was worth the $300 plane ride down to Roanoke.

The owner sold this home for DIRT becasue she ASSUMED IT HAD LITTLE value. I offered her $2000 LESS than her $10,000 asking price and she GRABBED IT.

I GUARANTEE you that RIGHT NOW…You are DRIVING BY similar deals EVERY SINGLE DAY!!! These homes are NOT for sale…But if ASKED, some of these owners will SELL.

This is no different than the person that lets a car ROT away in their yard when they could get THOUSANDS of dollars for it if they simply advertized it!!!

I don’t know WHY people do this…I just THANK GOD they’re OUT THERE!!!

I was given some PRICELESS advice when I first started out by a guy with a 4th grade education who became a MULTI MILLIONAIRE through Real Estate investing…His advice was deceptively simple.

He asked me just ONE QUESTION…

HOW MANY PEOPLE KNOW YOU WANT TO BUY HOUSES???

Think about how BRILLLANT that question is…The answer for me at the time was 2…Me and HIM…He said…“The more people you let know…the more people will call you.”

That folks is better advice than any $10,000 Real Estate BOOT CAMP out there.

As far as buying DIRECTLY from OWNERS???

Let me ask you this…Do you think you can buy a CAR from a CAR DEALER under it’s REAL VALUE??? You can’t…Just like you CAN’T BUY HOMES WAY UNDER their REAL VALUE once a REALTOR is involved. Reators KNOW values, their PAY is DIRECTLY TIED to getting THE MOST $$$$$ for that property. If you get to that property BEFORE they do…You have an excellent shot of buying at a BIG DISCOUNT. It’s no different than seeing a car parked in someone’s yard with no plates on it…If you knock on that door and ASK, you have much better ODDS of buying that car at HALF what a DEALER would charge because your NOT dealing with someone who’s JOB it is to KNOW that cars value.

I STILL have not purchased a BANK OWNED Property…Probably never will. The banks just LIST these homes with Realtors. And let me tell you…THEY AIN’T GIVING THEM AWAY!!! I see TON’S of new investors getting SMOKED these days with this bank owned CRAP. If I can;t buy it for LESS THAN 50% of it’s value…I’m OUT!! It’s WAY TOO EASY to get HURT over paying for distressed properties.

I want the HIDDEN GEMS…Not the TURDS that REAL investors have already passed on…Believe me…If it’s on the MLS…It’s probably a TURD. The only guys I know making money on MLS properties are playing with VERY CLOSE NUMBERS. They’ve been doing it for years and know to the PENNY what that property will REALLY cost them. There’s not a NEW GUY on the planet that has the connections to subs these guys have or the knowledge to compete with them…SO…YOU DON’T compete with them!!! You find the DIAMONDS…The STEALS…It’s really hard to get hurt buying a home at a 60% discount to that neighborhood.

Buy homes that aren’t FOR SALE…You can make a few mistakes (which you WILL do) and STILL make a nice profit. You can also do a QUARTER of the VOLUME and make the SAME $$$$$$$$$$$$ the MLS vultures are making!!!

A quarter of the work and BS for EXACTLY the same money!!!

WHERE DO I SIGN_________________________________________.

Believe me…THIS WORKS!!!

7

FD is right. Laziness is definitely a key factor. His post couldn’t be more true. Listen to what is said and you will succeed.

FD, stay out of my buying area. These Roanoke VA junkers are mine :biggrin

8

I’m actually going to INCREASE my advertizing budget in ROANOKE by 300% and I will donate ALL the profits to the OBAMA 2012 Campaign… IN YOUR NAME!!!

Just KIDDING…

There’s some real deals down there Hooch. :beer

9

That is basic, but damn good advice.

f you think about it, those guys who run the national “We Buy Ugly Houses” franchise capitalize on that single idea. They want people [EVERYONE!] to call their 1-800 number to sell their old junkard house, and they in turn pass the deal along to their franchisees and get a piece of the action - not to mention those $5000 /mo advertising fees PER FRANCHISEE that the collect.