Posted by Ronald * Starr(in No CA) on September 09, 2003 at 01:51:28:
I see bargain buying and own home buying as being two different activities. And incompatible. Not to say you never can buy your own home at a bargain price, but just that I don’t think it works very well.
When you buy a bargain property, you don’t really care much about amenities: location, neighborhood, style, size, and amenities of the structure and land. You will always be able to find find somebody to buy or rent from you. There may not be many people or there may be great demand. Either way, you make out from having gotten a bargain.
When you buy for yourself you do care about the amenities: quality of schools, types of neighbors, reputation of area, access to job, shopping, recreation, churches, etc. Also, the number of bedrooms, baths, the layout, the age, the structural features, the yard, the garage(s) etc.
Few properties will satisfy you. Very few properties can be bought at bargains prices. Tying to simultaneously buy at a bargain price and also get the emenities you desire makes it very difficult to find a property. You will likely spend a long time looking.
Here is a plan: look for bargains. Evaluate each bargain that locate to decide if you want it for you personal residence. If you find one that suits, you, great, buy it.
If you find one that does not suit you, great, buy it anyway. Then either resell it or refinance it to get out all your money invested and also get some cash flow. At least you will be no worse off in terms of cash than before you bought it and you will have s long-term asset.
Continue ot operate this way. If you find several bargains and not a one of them is desirable for your personal use, sell a couple to get together more cash. Then use that cash to find a home you want to live in, paying full market value for it.
Heads you win. Tails you win. Hmmmm. That sounds good. Either you find your bargain home or you else you find enough bargains to pay for your desired home, even though it is not a bargain.
And no, REOs are in most parts of the country not a good way to find bargain properties. The bargains you can get with REOS will tend to be in very poor neighborhoods, in deplorable condition, or both. Why buy a rundown house for you own use? Buy a nice house, so you don’t have to spend a lot of time fixing up where you live. Spend the time finding, and, if necessary, fixing up the quick-flip or the investment properties.
Just the way JT-IN sees things. Hmmm. Or something like that.
Good Investing************Ron Starr************