Posted by IB (NJ) on September 04, 2003 at 17:33:32:
You need to have a better understanding of REI AND your market BEFORE you purchase a 6 unit building that needs a complete gut out. IMHO, you are not ready for this type of project. You don’t want your first deal to be your last.
I Need $$ Help NOW! - Posted by Self and Son
Posted by Self and Son on September 04, 2003 at 15:52:08:
I have just met with an RE investor and motivated seller of two 6 unit apartment buildings which need to be completely gutted. Owner lives out of state and wants to sell all properties in DC to begin investing in new location. Asking price is $230K total. Owner is willing provide financing if I provide $15K earnest deposit. Otherwise, $10K deposit.
I have excellent credit, total debt of approx. $6K in car note payment, and no savings and earn about $41K annually.
Much thanks for any advise and help.
Re: I Need $$ Help NOW! - Posted by len
Posted by len on September 05, 2003 at 11:18:25:
Hi Self & Son,
I’ll echo everyone else’s comments here. I live in the DC area and can tell you that there are areas in our nation’s capital where it takes more than money and fix-up skill to have a successful rehab job. It takes Kevlar and a 9mm.
In fact, I recently came across a multi unit and wanted to birddog it to a seasoned rehab investor in the District–I didn’t think the area was horrible, certainly depressed and not great but not horrible.
Anyway, when I gave the address to the investor, he said, “I refuse to work in that area. That’s a pretty rough place.”
Something else to think about…especially if you don’t know the area well.
Cheers,
Len
Re: I Need $$ Help NOW! - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 04, 2003 at 21:56:37:
Self and Son–(DC)-----------------
I don’t think you should do this. You don’t sound ready to be taking on a project this serious. Too many other people before you have ended up losing much money and then quitting real estate investing when they did similar purchases in similar circumstances.
Just observe what happens. If you see somebody fixing it up, try to talk to them. Become friends and find out how much work and money it takes them to do the deal. If they are experienced investors, you can learn a lot.
I encourage you to read my post for beginners. You can find it by putting “beginners success” into the search function on this main bulletinboard forum of this CREONLINE.COM website.
Sorry to sound negative, but sometimes not acting is a better choice than acting. When I was starting out, I was going to buy a rundown 7-unit property which is a few blocks from where I live. I had it looked at by a contractor. He agreed that I could fix up everything over time with enough money. However, I only had enough money for a downpayment. I would not have had enough money to rebuild the bathrooms. I passed. Then I started out with single family houses, so there was less investment in each one. I sometimes wish I owned that building, given that is is worth a lot more now than it was then–over twenty years ago. However, who knows if I would be a real estate investor today if I had gotten chewed up by that property? Now I am on the edge of being financially independent because of my real estate rentals. Within a year I should be completely self-sufficient with the rental income. Might not have happened if I had bought that property.
Good InvestingRon Starr
Re: I Need $$ Help NOW! - Posted by phil fernandez
Posted by phil fernandez on September 04, 2003 at 18:39:02:
What do you plan on doing with the properties. You will need a well thought out exit strategy.
A word of caution. If the properties need to be gutted, as you suggest, have you had any experience in rehabbing. It’s not an area of re investing to get into without prior experience.
Re: I Need $$ Help NOW! - Posted by mattc670
Posted by mattc670 on September 04, 2003 at 16:33:48:
Do you plan to rehab the properties, or sell
the deal to someone else?
Do you know if these properties are worth the asking price - since they must be gutted?
Re: I Need $$ Help NOW! - Posted by Self and Son
Posted by Self and Son on September 04, 2003 at 17:06:17:
I plan to rehab and hold the properties for rental income.
I don’t know if they are worth the price. I don’t know and agents who could look up the comps and rental rates for this area. Any suggestions? Thanks.