Posted by Thomas on May 15, 2007 at 12:38:07:
That’s funny that you said this, because an idea of doing something similar to that came to me while driving around looking for properties this morning. thanks Darren
19 year old; wholesale question??? - Posted by Thomas
Posted by Thomas on May 14, 2007 at 09:57:24:
Do rehabbers buy houses in bad neighborhoods if the price is cheap enough?
P.S. I live in Nashville, TN
Re: 19 year old; wholesale question??? - Posted by Tommy T
Posted by Tommy T on May 14, 2007 at 19:28:55:
Yes we do… if the numbers make sense, and it’s not a ‘war zone’,
where your life is at risk doing business there. The numbers: It has
too be cheap enough to buy, fix up and maintain, factor in debt service
and vacancy rates, and still make good cashflow for your efforts, i.e.,
really cheap. Unless you see the neighborhood starting to turn out of a
bad cycle, there will be no appreciation, so it has to cashflow well for a
buy/hold investor, or as a fix and hold.
If you are buying next to a better neighborhood, and your timing is
right, the rehabbers can actually start a trend to turn the neighborhood
around, one house at a time.
Back in the day, one of my rehabbing ‘tools’ was a sidearm and an
extra clip, but I don’t recommend that you follow that path, there are
other ways to put deals together in better neighborhoods!
Re: 19 year old; wholesale question??? - Posted by Kristine-CA
Posted by Kristine-CA on May 14, 2007 at 12:54:49:
My experience with bad neighborhoods is yes, you can sell anything
anywhere for the right price. But you may be surprised how low the
price has to be. In some cases the price needs to be practically free
and the property needs to be in good condition. Obviously, in those
situations there’s not a lot of room for wholesaling.
If you are looking at a neighborhood with a large volume of vacant and
abandoned houses, you may need to dig a little to find out why.
Sometimes those areas are a redevelopment zone and the houses are
slated for demo. But you might not know it unless you do some
research to find out who is buying them up or if they have been
condemned. And never believe what the neighbors say without
checking into it first. You won’t believe the amount if mis-information
out there. I have found it useful to find out who does own and who
does buy in neighborhoods with lots of problems. There are a lot of
buy and hold people out there. Low income housing wouldn’t exist
without them. There are a lot of landlords who have, IMO, a high
tolerance for the issues that go with rentals in bad neighborhoods.
One more suggestion, and you can take this for what it’s worth to you.
I find that there is no need to identify yourself by age, (or by gender,
marital status or anything else for that matter) in this business. People
judge with or without the info. No need to give them any info that isn’t
relevant. Ask good questions, listen well, be creative and be honest in
your dealings–no one will care if you are a 19 or a single mother or
college educated or a person of color.
Happy researching. Kristine
Re: 19 year old; wholesale question??? - Posted by Redline
Posted by Redline on May 14, 2007 at 11:15:29:
Unless the market is in a complete recession (in which case there are virtually no buyers or sellers) the answer would be yes. Be careful though, because it will be tough to find a buyer for the worst of the worst … and frankly, you shouldn’t be doing business there either. There are better ways to make a living.
RL
Re: 19 year old; wholesale question??? - Posted by Thomas
Posted by Thomas on May 17, 2007 at 11:19:53:
Do you live in Atlanta Tommy T?
Re: 19 year old; wholesale question??? - Posted by Thomas
Posted by Thomas on May 14, 2007 at 13:52:09:
Thanks alot for your help Kristine. The reason I asked is I was having problems finding vacant houses. I would drive around for like 2 hours a day for a week and maybe find 3 houses. then I read in one of Ron Legrand books, it said if your having trouble finding vacant house then your in the wrong neighborhood. It also said that most of the vacant would be in low income neighborhoods. So following his advice I switch neighborhoods and now I’m finding them everywhere, I wouldn’t be suprised If I can compile a list of 150+ homes this week. but when I look at the neighborhood I can’t think of anyone who would want to buy a home here. any ways is driving around an effective method and if so, is there anyway I can improve my chances of finding vacant houses in neighborhoods where people want to live?
Re: 19 year old; wholesale question??? - Posted by Darren
Posted by Darren on May 14, 2007 at 14:13:20:
Build a good buyer’s list full of Section 8 landlords who are looking for cheap properties they can invest a few thousand into and get cash flowing. Go down to the section 8 office and get a list of homes or just look in the Sunday paper and start calling. There isn’t a lot of rehabbing going on in the borderline areas, but there will always be landlords who want a great deal. You can make 2 to 3 thousand per property. Find out what buyers will pay and factor in a profit from there. Be very careful in the real ghetto areas where every other house is boarded up.