Re: Question about “My First Offer” - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on January 24, 2002 at 20:26:12:
In my opinion you are not ready to commit to a house purchase. I think it would be ok to look this property over, as a dry run, if you want to waste the time driving a half-hour north of town. But, keep your wallet in your pocket and your signature pen in the car is my advice.
Now, you could change my mind if you could narrow down the market value to a much, much narrower range. This is the main clue to me that you are not at a point where you should be risking money buying. That range of “comps” is just too extreme. From what you have said, it may well be that the property is worth about $125K to $130K, which is probably the central value for the comparables. However, I do not know for sure. AND MORE IMPORTANT: Y O U do not know for sure. Until you can peg the value a house to a range of about $10-15K, you are not knowledgeable enough to be buying, in my opinion.
you also say: “After a grueling 3 weeks of flyers, signs, and calling all the FSBO ads I could find, . . …” Whoa, three weeks? You are not even a “Pre-investor” yet, I would judge.
I suggest that you plan to spend about 6-18 months studying up on real estate investing, your market, the laws, financing, etc related to real estate before you seriously contemplate putting out your money for a property. You don’t know how little you know.
I suggest that you spend some time looking at houses for sale, preferably within less than 20 minutes drive from home. Look at a hundred houses for sale. Keep some notes. Call up to find out what happened with the properties after 2 months, 4 months, 6 months. What they sold for mostly. This is a technique that Bill Green mentions in his “Think Like a Tycoon” book, calling it the “hundred-house rule.”
I followed it when I first got serious about investing in real estate. Until about 50 houses, I was like a blind person fumbling around in the real estate jungle. After that, I began to really know what the values of properties were.
I have a post in 2001 about how to become a successful investor. It is on the CREONLINE.COM main bulletin board at message number 59703. You might want to read JohnBoy’s advice for beginners at message 70929, this year on the same site. In 2001, Paul gave his post for beginners on the Carleton Sheets board2. Put “expert” into the search function there and you can get his expertise.
Good Investing***********Ron Starr*************