Posted by Mark (SDCA) on April 26, 1999 at 09:50:42:
sigh So would I. But I don’t hold out a lot of hope for finding any 25K fixers in San Diego.
Mark
Is my logic correct for making big bucks in real estate? - Posted by Ronnie
Posted by Ronnie on April 22, 1999 at 23:59:03:
HI!
I’ll start by thanking Jim Piper for his encouragement in my getting re-started in real estate. I’m hoping that my question and the responses will be helpful to me and to others:
Here goes:
#1) You find a nice house that has a FMV of $150,000 with a $148,000 mortgage. You buy ‘subject to’ from owner. According to LeGrand, I should be able to get a minimum 10% down for this property (and I should be able to sell it for 160,000) from a buyer with poor credit if I sell it ‘owner financing’ … putting it in a land trust … selling the beneficial interest, etc. Are my figures correct? Are many of you doing this on a routine basis? I’d love to get some idea of how many of these some of you routinely do per month.
#2) I don’t have to travel too far to find gorgeous homes that retail for $200,000 and higher! Do the percentages still work … or do you sit on the property for a long time?
P.S. I’m under financial pressure to make real estate work for me. I’ve started calling ads (finally) but due to lack of success so far in finding a L/O candidate, I’m thinking of simultaneously trying to do the ‘owner financing’ type deals described above. All advice is greatly appreciated!!
PPS I promise to send a Success Story once I get my first big success!!!
Re: Is my logic correct for making big bucks in real estate? - Posted by Irwin
Posted by Irwin on April 24, 1999 at 04:21:13:
If you’re planning to operate in this price range with low spreads like you described, you better be in a hot, hot, hot market. That is one where your phone starts ringing before the ink is dry on the newspaper ad, and people can write large downpayment checks. Otherwise, holding costs eat you alive, and you need spreads of $20-30,000 to make decent money, and avoid disaster. Frankly, I’m not a great fan of higher end homes as investment deals. I’d rather buy a $25k fixer, put in $10k and sell it for $55 to make my $20k.
Your logic… - Posted by Sean
Posted by Sean on April 23, 1999 at 10:19:30:
…seems pretty good and both JPiper and Mr. LeGrand know what they’re doing. Just make sure you get a good spread between the mortgage interest rate you’re paying and charging because that’s where most of your profit will come from.
You should focus on properties that are in the price range that first time buyers will be interested in. That, of course, depends on your area.
Re: Is my logic correct for making big bucks in real estate? - Posted by Karen McCall
Posted by Karen McCall on April 23, 1999 at 07:24:45:
It really depends on the average market price in your area, whether or not you’d have to sit on it for a while to reduce the amount of time I’d concentrate on houses in the average market price range, which in the area where I am it runs from 85-115K. The more expensive the long on market time.
As for the deal above…it seemed like you are cutting it mighty close…I’d look for a house with a bigger spread.