I am brand new to this and have just started studying creative financing, & no money down techniques. My wife and I purchased our own home 2 years ago. We did it with a small down and it is owner financed. I went thru a realator to purchase the home. My question is, would it be wise to use this realator in @ least purchasing my 1st investment property.? I have about 30,000 in equity in my home but I would prefer not to use any of it or very little in starting this venture.
I hope that this is not a stupid question. I am very exicited about this.
I am 52 yrs old with a good job, but I would like to get out of the 8-5 routine within 3-5 yrs. Thanks in advance for your help!!
It all depends on if this realtor is “investor” friendly. I went through about 5 or 6 realtor before I found one that I could work with, and wouldn’t bring me properties listed only 5K below market. Trying to find someone that really understands what you will be looking for, instead of half of them saying they know but don’t have a clue… that’s the hard part.
When you do find one that will be worth their weight in gold, be sure to not waste their time, as in showing you houses and running you around town. I always take a driveby look at the property, get out if it is vacant and walk around.... half the time there is a door unlocked or a window near a door and you can get in. This actually turns out to be the case in more instances than not. So I can view not only the outside, but most times inside too and not have my realtor have to take his time out to run me around.
Someone that will send you a list daily of everything that comes up on the market in your area, and then you search through them for what you might be looking for is a great way to show them you know their time is valuable.
Thanks for your reply. It makes sense.
My next question is that I live in a small rural area in Northern Calif. where property values are still rising like crazy. I have found no lease options or rent to own properties advertised. Usually, most properties go quickly in this area. Any suggestions on how to find “motivated sellers” in a market like this. I know that as a “newbie”, the answers
will come as I continue to learn. But I’m open to suggestions.
Howdy: It is a little harder to find motovated sellers in a sellers market as you have become aware. Even divorce , back taxes and estate property are demanding high prices and getting it. I know one guy that is coming here to Austin to buy REO’s and other deals from proceeds from property he has sold there in Ca. He is dam smart. He also has some large numbers to work with. You too may want to try a partnership or pool together some money and make a play in a buyers market. I am working with a group of 15 from Ca too and trying to put together some deals. I saw this same thing in the 80’s too as well. Let me know if I can help in any way
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
I used a realtor for my first deal and found it quite helpful. I agree with the earlier poster in that you have to see if the realtor is investor friendly as investors are looking for bargains and deals. The more you pay, the less you stand to make if monthly cashflow is your goal. Just as if you were “interviewing” someone to work on your $$$$ car, do the same with the realtor. Take your time and interview them. Getting connected to someone that doesn’t quite mesh with your style or fully understands your goals and objectives can waist more time than a little bit. They will be a tool for you and are there to assist you first so take your time and use them.
I stress use them because by your agreement with the agent you are drawing upon his or her experiences with deals, property values, area trends, and market surveys. Very valuable. Search the web for more information, read, and go for it. If I can do this and succeed, most anyone can!
Ern
P.S.
Being 52 can be a huge advantage if you are open to it being one. Just think about all of the life experience that you already have and will not have to learn! I envy that ;D mynexthouse.us ;D
Leave your equity alone… Your job is to be free and clear on everything that is pesonally owned…
Let your business leverage…
Ask me how I learned this…
Repeat after me… I will not leverage personal assets…
People leverage personal assets… because they believe it takes money to make money…
Again… repeat after me… It does not take money to make money… it takes education, planning, and zeal…
Now, that I’m off my soapbox…
Using realtors to find deals when using creative financing techniques… Is like training an elephant to dance… It can be done… but, the elephant thinks your stupid… and it takes a lot of time better spent elsewhere…
Now you can homegrow your own realtor… find someone that ain’t one and make them one… Buy out a realty company where they have no choice… or something of that nature…
For the most part they only understand cash and listing properties… but, rightfully so… as that’s how they get paid…
Get out there and market to find some motivated sellers… so that you can reach your goals of being retired in the next 3 to 5…
Jump in the water is fine… and life is much better when you dont have to work for a living…
Thanks everyone for your replies. The willingness of the folks on this board to respond to a “newbie” like me is amazing. I should be receiving a course in the mail this week on investing & creative financing. I can’t wait to get started.
In the meantime, I will continue to search for my 1’st investment property. I do have one question I would like to throw out. I am in this for the long haul. I do not need instant income. My goal is to create an increasing, steady positive cash flow. As I mentioned in an earlier post,
I live in an area where property values are increasing and and there are no signs of that slowing down. It appears that I would not have a difficult time finding tenants if I decide to go that route. Therefore, is it as important to buy below market value in an are like this compared to other markets? Wouldn’t it be more important to acquire a property with good financing (OPM) than the price of the property. This does not mean that I would not negotiate the best purchase price. It seems like the appreciation and the positve cash flow would make this possible.
I know that I have a lot learn. Any feedback would be apprecited.
Thanks again in advance.
Although, I reccommend getting into the RE game even if your were to buy houses full retail…
You make your money when you buy… And once you’ve educated yourself about buying real esate creatively…
You’ll start to understand what makes since…
The problem with being in an area that is appreciating and buying based on that plan… is that no one has a crystal ball…
And then you end up with a whole bunch of properties with Little to No equity… or even negative…
Then your cashflow starts dissappearing…
So, you really have to always have two things going… Investments (houses that are keepers) and businesses (Real estate or other) that produce cashflow and can sustain you through cycles…
Hind site is 20/20 in real estate. I started buying in Austin when folks were saying why are you buying when everyone is giving their property away. I took as many free as I could . Looking back I see that i started too soon. It took 5 years for the market to start rebounding. I had 30 breakeven houses so I figured. When the payment and rent is $700 that is not break even. I figured I could do the maintenance myself so that would not sodt anything. Both thos assumptions were wrong and I had to bail out just before the big market upswing that would have produced $30,000 per house profit with zero down and sweat equity. Some advice from all this jibbersh is to keep your day job if doing this type investing and buy for the long run. In a few years you may be able to sell one or two to make a profit so you can buy some more. Prices will not rise forever so keep a sharp eye on the market and you will know when it starts to level off or take a nose dive. I have started buying Again in austin because feel we have seen the worst here and are leveling off and starting a rebound soon. I hope to catch the wave again
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
Thanks again everyone. The course that I have coming is the Carlton Sheets No Money Down system. I have heard that it is a good course to start with to learn the basics of cash flow and creative financing. We shall see.
I think that what I’m hearing from most of you is to Find a motivated seller no matter what. Don’t buy just to buy. Although the market is tough right now in my area, I beleive that there must be properties out there that will fit my needs as an investment. I have the advantage that I travel a lot in my day job. Although I seldom get more than 150 miles from home, I drive by a lot of houses and properties every day. I very seldom cover the same ground twice, so I will be looking @ the landscape differently now that I’m getting into this.
Anyway, thanks again. I will probably be asking a lot of questions as I learn. Hopefully I will be able to share some positve experiences & advice on this board one of these days.