My neighborhood is a goldmine

by 27 replies
31
Hello Warriors,

I'm kinda skeptical about posting this. I'm not sure how many of you will take this. In my neighborhood(middle class suburb). There's a bunch of foreclosed homes ranging from $15,000 to $40,000. I want a piece of this. I want to own rental properties or either rehab them a little and resell them. I think it's big money here but I don't know where to begin. I have some money to play around with but I would like to have a few investors as well. How can i find people who are willing to invest? Craigslist? Here? I want investors now because I know when the market recovers we'll be sitting on a fortune...I am kinda skeptical about having partners as well because everyone has a different agenda and a different outlook on things.

There's so much money to be made here....Just need a plan to get it. If I were to purchase a 17k home...cash...split 50/50 with a partner. I could rent the home for $850 per month. split that with a partner or 2...maybe im getting ahead of myself...I dont me to ramble..but I just got done browsing these homes. I wanna get into it but I cant do it by myself.
#main internet marketing discussion forum #goldmine #neighborhood
  • Banned
    Sounds good.

    Where that houses located.


    Mario
  • in a suburb of Cleveland, Ohio
  • Wow!

    You can't get anything under about $200,000 here. And that's the kind of house where you cross your fingers at night and hope when you wake up in the morning the whole thing hasn't collapsed.

    For anything decent, it's more about the $300k mark.

    Those sound like a bargain, especially with that kind of rental return.

    Is the rental market strong enough to keep them occupied?

    cheers
    Sam
  • Yes, the rental market is strong enough to keep them occupied. Man, there's a lot in this neighborhood. It's unbelievable. I'm going to purchase atleast 1 of these in the next 30 days. I want more though. I don't know many people with the mindset that I have so it's hard for me to find partners.
  • Make sure you do your research. Liens, tax certificates, garbage or city liens, home owner association dues, 2nd mortgages, federal tax liens still attached all affect the houses you might be interested in.

    Most of the time all of these liens stay attached to the house.

    REALLY research why a house in a middle class neighborhood didn't sell for only $15K when it is worth a lot more.

    Go to your county property appraiser and start doing your own title search there for a house that already went to foreclosure and figure out WHY no one bid on it.

    After that, go to your tax collector's office & look for any tax liens

    Then city for city liens

    After you know down to the penny why no one bought it, do a live house that it is on it's way to foreclosure and attend the auction. Bid if you want to as a businessman up to the number you decided to bid before hand, no emotion.

    Meet and get to know your local investors, you will learn a ton from them and find someone you can work with.

    Best of luck

    Greenovni
    • [1] reply
    • A title comapny in Cleveland will do all the for a couple hundred bucks.
  • solid advice, thanks green
    • [2] replies
    • You might want to partner with a Realtor who deals with this type of investment property. Someone in the field would be a great source of information.
      • [1] reply
    • I agree you MAY have some good opportunity here, but before you commit your hard earned dollars do a little more research first.

      An easy way to determine renter demand is to place ads for houses to rent on craigslist, or in the local Penny Saver/Thrifty Nickel type of give away ad mags that have 'houses for rent' sections.

      A huge asset for someone starting out in this field is a list of folks looking to rent. You're much better off getting a list of renters and then getting the houses than getting the house and then trying to figure out where your renters are coming from.

      Just place a few generic 'house for rent' ads, and when people call you can tell them 'that' house is no longer available but you will be having another one coming up shortly. Get their contact info if they will give it to you. Start building a list.

      As a side note, that list can generate some money for you if you develop a list of other landlords that will pay you a referral fee for a good tenant.

      Just don't abuse the tactic, you're not trying to stroke people or get deposits, you're testing the market.

      Many times what looks like a killer market for rentals is just an illusion. First off, banks won't loan on those houses. So you'll need to buy for cash, or investor splits, or other creative ways. There is a lot of potential here if you start off on the right foot.

      Look at it this way...If you want to attract investor partners and you have a list of potential renters you are way ahead of the game. This niche is all about cash flow. Forget equity for now, forget appreciation as well. Those avenues are dormant at best, downright dead in many areas. Don't get caught in a trap where you fool yourself about those having any value in the equation right now.

      Typically expenses for rental houses can run 40% - 45% of revenues over the long haul. Most people just getting into the game completely dismiss this fact as lore. It's a guaranteed path to failure. You need to get the numbers right, this is critical for your long term success.

      Bottom line...Go into this with your eyes wide open. Test your market for demand first. Find other local investors if you think you need a money partner. And get very familiar with your local tenant/landlord regs. Those regs will make or break your ability to profit as a landlord.

      Best of luck,

      KJ
      • [1] reply
  • Thanks guys. This is solid advice. It's nice to be around a group of people who share common interests.

    My eyes are so wide open now. I see endless opportunities with real estate and making money online.

    I'm convinced that once you have a solid plan in place, sky is the limit. I've succeeded with everything I've tried as long as I stuck to it. I believe I will be a millionaire soon. I just have a wonderful feeling right now.
    • [1] reply
    • there is alot of money to be made in real estate right now
  • Definitely do your homework before jumping in, but I say go for it!!!

    I have always been of the belief that "if you can't kick it" it isn't a real asset. Years ago I lots money in the stock market and have invested in real estate ever since. I only stopped buying property during the last few years when things were obviously crazy to everyone who could see what was really going on.

    Looking at what has happened in the stock market lately is proof enough of that concept.

    I hope this helps.
    Phil G
  • Why don't you call Lebron James of the Clevlend Cavaliers and talk to him about this :-)

    He might help you out.

    Tal
    • [1] reply
    • Another plus - a local Realtor that specializes in small investment properties might be willing to invest with you. Possibly.

      It is worth a shot.
  • You might be better off going to a real estate investing forum like Flippinghomes dot com. That forum along with some real estate courses helped me do several real estate deals.

    You will need to get educated to find out what the best strategy is to obtain houses. Every situation is different. Some examples of real estate strategies are wholesale (flipping homes), subject-to, and shortsales.

    Usually the best strategy for a house that is about to be foreclosed on is a shortsale. This is when a bank will take a short on the mortgage of the house that is behind in payments.

    I obtained 3 houses this year using the shortsale strategy. I will give you an example on how it works:

    I was marketing for people that were late on payments. I had a guy call me about a house that he was 3 months late on. His house was worth $275k. He owed about $285k on the mortgage. I negotiated with the bank to take $200k on the house. I then started marketing for a buyer. I found a buyer that wanted to buy the house for $225 for a $25k profit.

    This whole process took me about 4 months. I worked on this deal on my spare time and probably spent a total of 20 hours on it. Banks are getting rid of these houses for a lot less than they are worth because they have so many in stock. Make sure you get educated before doing any kind of real estate deals. You could lose a lot of money if you are not careful.

    Good Luck!
  • not know much about ohio, but for southern california, in certain area, the house price dropped a lot. it is definitely a good time for home buyers IF you can get the loan and will live in the house. If you want to rent it out, several things:
    1. check out tax. many houses, the price is not high, but still have $6000/year or above property tax, and about $45/month HOA.
    2. check out whether you can find tenants. In certain area, the rent fee actually is dropping, because of so many vacant houses. check local classified ads, how many houses are available?
    3. you will have to maintenance to house. takes time and money.

    good luck

    david
    • [1] reply
    • You've received some good advice here. If you live in a foreclosure state, you may want to find a Realtor to help you out unless you can get access to MLS services. The reason for that is to get solid and current market information on comparable sales.

      You will, as you have been told to do a lot of research on the properties you wish to bid on.

      Here are some tips:
      1. Get a list of foreclosures for the area you are interested
      2. Throw out all the FHA's
      3. Look at conventional, private, and VA foreclosures only
      4. Pick out the ones you wish to bid on and look at it-photograph it
      5. Go to the county records office to research the property (and owner name) you are looking for recorded liens, Federal, local, state, city, school tax-and watch out HOA's (home owners associations)
      6. Prepare for the auction-you want to look for the "trustee" that is selling the property or properties at foreclosure and you will need to pay for it at the auction-I used to have cashiers checks made out to myself in $20,000 chunks that I could sign over to the trustee or simply return to my bank if they were not used
      7. Never pay more than 65 cents on the dollar unless it is an exceptional property and the market is good for sellers where you are, in your case if you want to be a landlord that may not be as concerned about that but to get top dollar in a rental property it will need to be in good shape. Ask yourself this, "Would you live there?"
      7. If someone is living in the foreclosure, issue them an order to vacate. In Texas they have three days to vacate. This may sound hard and cold but unless you enjoy being lied to, stabbed in the back, and sued repeatedly you will learn being cold and hard will save you money and hardship in the future. (I learned the hard way)
      8. Get the insurance question answered before the auction, you don't want to go to your new acquisition looking to change the locks only to find it stripped or burnt to the ground with no insurance.

      Me and my associate researched, purchased at auction, fixed up, sold and closed 18 properties in 23 months. That's about a property every 45 days and it is a lot of work.

      What I have outlined here is just a "brief overview" of what it takes to be successful at buying and selling foreclosures without getting burned or "flashing" any equity that there may be available. There are many details of each phase I mentioned above. I have a blog with other information as well but being a babe in the WF I believe I am muzzled for now.

      Ed.
      PS....
      The government is looking to stop foreclosures for up to 90 days and that can be a concern going forward.
  • update: I tried to get a house..it was in perfect condition for only $17,500 but someone already had an offer on it and they're not accepting any more offers. Disappointing.

    I need to raise more money somehow.
  • I have been in this type of rental market for years, and houses like the one you've described have been available in my market throughout.

    It seemed like the easy way to riches, and I built over 30 houses. Let me tell you why it's not:

    1. Tax and insurance expense (this can go WAY up any time)
    2. Vacancy Expense
    3. Clean up, re-rehabbing expense every time someone moves.
    4. Ongoing repair expense

    Believe it or not, these last three expenses often add up to MORE THAN THE RENT YOU CAN COLLECT! It seems hard to believe but true. So go in with eyes wide open and meet some landlords who work these neighborhoods and see what they go through to make a buck.

    Usually the only time I'll rent something out is when I get it nearly free from an owner struggling with a tax sale and I can make my money back in a matter of months. Otherwise, I'm the guy selling to YOU for $17,500, and loving it!

    Rick Dawson
    • [1] reply
    • There's the other side of the coin. I would agree with you completely and I've seen similar results from my Uncle who rents in a similar market and has lost thousands on taxes and vacancies.
      • [1] reply
  • Real estate rocks. The best investment I ever made was buying a house. I only had my first home 3 months, and then sold it for $30,000 profit. Real estate agents are making a killing doing what I consider a really easy job. 7%commission on a average house price of $200,000 is awesome. Where I live people have doubled their money on homes in a years time. The market is slowly falling, but prices are still holding well.

    I live in Canada, and when the canadian dollar was higher than the u.s. lots of canadian were snatching up bargain properties in the U.S. of A. Even though our dollar has dropped, it still looks to me like us properties are a bargain. Maby you should phone up some wealthy canadian real estate agents and ask them to partner up with you.
  • You got the right mindset, just make sure you take care of all the details and you can probably make some money.
  • It's not easy as it seems.

    Like in IM, it looks easy from the outside.

    Better to be a member of investors group like Income Property Loans|Investment Property Financing- Real Estate Investing.

    There are people who can help you there and people who're looking for JV.

    Don't go by yourself at first.
  • It is a good idea to invest in real estate when the market is low and then sell them when it picks up. You can initially take only your friends or close relatives for your partners so that you can rely on them, rather than taking somebody as partners and losing out on them. Check all the documents of the property you propose to take over through a legal adviser and go as per his advice. You may take the advice of property appraiser also who will be able to give you a fairly reasonable judgment on whether the property is in for a boom when the market starts picking up. But also be aware that it will take a few years before you can get the kinda profit you are looking for. Make sure you are able to withstand the strain till then.
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    My neighborhood is a goldmine

    Hello Warriors, I'm kinda skeptical about posting this. I'm not sure how many of you will take this. In my neighborhood(middle class suburb). There's a bunch of foreclosed homes ranging from $15,000 to $40,000. I want a piece of this. I want to own rental properties or either rehab them a little and resell them. I think it's big money here but I don't know where to begin. I have some money to play around with but I would like to have a few investors as well. How can i find people who are willing to invest? Craigslist? Here? I want investors now because I know when the market recovers we'll be sitting on a fortune...I am kinda skeptical about having partners as well because everyone has a different agenda and a different outlook on things.