BiggerPockets

Hello, my name is Adam Harrison. I fix computers for a living. I have read a ton of real estate books, from people such as David Lindahl, Gary Eldred, Reggie Brooks and Matthew Martines. I am very interested in getting started in real estate, but I currently don't have the money for a down payment, so I am continuing to study real estate while I am working on improving my credit and putting together money together for a down payment. I look forward to doing my first deal soon.

I'm looking at starting my investing career by investing in single family properties in the mid-west. I have seen several companies that do prepackaged deals on these properties, such as Integrity Real Estate Properties, Texas Investor Homes and Buckingham Investments ([LINK REMOVED]). Does anyone have any experience with these companies or any other similar companies? Are these properties really deals or are they high priced dumps?

Thanks for your response.

My plan is to first pay off my debts and then get together some money for a down payment. If my credit card balances were not so high, I would probably have great credit so I am fortunate in that respect. In the mean time, I'm going to continue to study real estate books and forums such as this one, so I am ready to go once I have the funds put together.

And then, when I start investing, I plan on starting small, investing in residential investment properties and then gradually moving up to large apartment buildings. Overall I have a buy and hold, although I have studied flipping.

The answer to your question, why the mid-west, is based off of preliminary information I have gotten from publications such as Realty 411, it is possible to buy a property in the mid-west for as little as 5,000 or 10,000 and actually have a positive cash flow. The properties I have looked at in Los Angeles, even in the bad areas, are outside my price range. They don't cash flow at all with a down payment that small or they only cash flow on an interest only mortgage. And I would much rather make the inevitable newbie mistakes on a property worth $30,000 as opposed to an LA property that runs for $300,000 or more. Having said that, I'm always on the lookout for deals and if I find something in LA that makes sense, I'll go for it.

As to managing the manager, if I had a property in say, Texas, I would stay in close contact with the manager to keep up to date and I also would make surprise inspections from time to time to keep the manager honest. I understand your point, and I agree, owning property in another state is not ideal.

And thanks for your recommendation, I'll be sure to continue to study the forums, great resource you have here.

Just wanted to welcome you to the board. I am a newbie from Charlotte, currently bird dogging until I build cash reserves. Perhaps that is something you can do in your area to build cash while you learn. Good luck!

Adam, Many of those companies you mentioned sell "turn Key operation" properties. They buy those houses, rehab them and find tenants. They sell them at premium primarily to people who want to get into the game but have very little knowledge.That's how I found my little gold mine. I followed one of those companies and checked the location of those properties. I then compared them to properties listed on the MLS. I soon learned that properties offered by that company are sold for tens of thousands of dollars more than the ones next door. For instance, There is a house for sale by that company right now which listed at $54,000 (Not negotiable). I bought a house in October which is located two blocks form that house for $7,500 and it will take me about another $7,500 to rehab it. Yes, it is a smaller house than the one offered by that company but still, the price difference is staggering.

Hi Adam,
I would have to agree with Peter.

A few years back I got burned by buying a "great deal" in Pueblo Colorado, it was only $15k and it was currently being rented for $400 a month. I felt I did my due diligence, by hiring people to go look at it for me, and guess what, it turned out to be termite infested.

Long story short, I was able to resell (a year later) for $8k. It could have been a lot worse.

From then on, I only buy properties I can put my hands on.

There are plenty of deals to be had in the greater LA area.

Read through BP to see all the different ways to find properties.

If you are interested in working together, let me know, (send me an email) letting me know some of your background, and goals, and what you can contribute to a profitable partnership (hint: I am not talking about any cash/money contribution).

Thanks,
Brian