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| Where do I begin? |
The first topic topic we discussed was "finding a house". How do you find a house to buy? Where do you begin to look? He suggested the MLS (Multiple Listing Service) as a good place to start. The MLS lists all the houses that are for sale in your area, with a few minor exceptions. He picks 75-100 homes and begins to narrow them down. His strategy involves strictly buying foreclosures ranging from $20-$100K(depending on the area), fixing them up and selling them for a nice profit. It sounds simple, but real estate can be tricky and you need excellent agents, loan officers, contractors, and brokers. They can make or break a real estate investment.
Once narrowed down to a few houses...he personally goes out and looks them over, then he narrows it down to one home. Once he performs a brief inspection on his final choice, he then hires a professional inspector to look for damage to key spots in the house; such as the foundation, the roof, or termites in the studs. Those are probably the three biggest turn offs of a foreclosure purchase. After the inspector okay's the home and assures him that none of the big three problems exist, he proceeds to meet with his agent to begin the purchasing process. However, before finalizing his decision on a house he checks into the yearly property taxes. This is huge and often overlooked by real estate investors. Investors can end up finding themselves drowning in taxes after they purchase the foreclosure and can lead to losing the house. (FYI: you must also realize that the taxes will be higher than their previously listed price since the house will not be owner occupied.)
Once narrowed down to a few houses...he personally goes out and looks them over, then he narrows it down to one home. Once he performs a brief inspection on his final choice, he then hires a professional inspector to look for damage to key spots in the house; such as the foundation, the roof, or termites in the studs. Those are probably the three biggest turn offs of a foreclosure purchase. After the inspector okay's the home and assures him that none of the big three problems exist, he proceeds to meet with his agent to begin the purchasing process. However, before finalizing his decision on a house he checks into the yearly property taxes. This is huge and often overlooked by real estate investors. Investors can end up finding themselves drowning in taxes after they purchase the foreclosure and can lead to losing the house. (FYI: you must also realize that the taxes will be higher than their previously listed price since the house will not be owner occupied.)
***Please check back for the second segment of "Lessons I've Learned in Real Estate"***
Thank you Alfred for your contribution to W.S.I.
Please feel free to comment below regarding any questions you may have.
Interesting post. I might be getting into real estate. You definitely have some good tips.
ReplyDeleteJ. Fellows