newbie question - possible to find THIS good of a deal?

Question

since i no barely enough to ask intelligent questions, I'll start out tonight with this one :)  ...

i goto har.com and view the properties for sale here in houston all the time.

1) is this a good place to find the best possible deals?  If not, where?

2)  Is it possible to find a 300k house to buy for 250k?  That much instant equity would really jumpstart me into wanting to go forward!

Tom Sylvester · Answer

The best deals that you will find almost always come from your own marketing or through people you have networked with.  Look at ti this way... whoever has more options in a negotiation has the upper hand.  If a property is on the MLS and a seller gets 3 offers, you are competing against two other offers.  Additionally, you will submit these offers via an agent and will not talk ot the seller directly.

If you say, hear about someone who moved to another state but their old home is sitting vacant, you may be the only person talking to this seller.  You can find out a lot more information, such as their motivation.  You can also do a lot more negotiation on the price.  Since you may be the only one talking to them, you have more options than they do.

As someone else mentioned in your other post, I think you are confused on what exactly subject to means.  Subject to is a way to buy property.  You can buy any property that has a mortgage subject to/  Basically, you are buying the property "subject to" the existing mortgage staying in place.  So you get the deed to the property, and instead of going out and applying for a new mortgage, you will just begin to make payments on the current mortgage that the seller has.

So this is one way to buy property.  Some seller may not want to sell this way.  By talking to the seller, you can find out what their motivations and needs are.  Based on this, you will want to structure a deal that works for both you and the seller.

Jason Schmidt · Answer

ahhh 83% - you see?  My math skills are crazy good.  I didn't almost flunk algerbra for nuthin', you know! :)

Now regarding these "deals" - I am getting the picture now.  Do most RE investors NOT look on the MLS then?  Is the name of the game 'advertising' yourself?

If I am planning on buying a 300k property and renting it, you all are saying I shoudln't be looking for something that is 250k, but rather closer to 200k?  Would this be a sub2 deal, or just an underpriced property?  If this is the case (getting a 300k prop for 200k) and these deals actually exists ... then THAT *really* excites me.

Tom Sylvester · Answer

You can find properties on the mls, but they are often few and further between than finding them on your own.  Many properties on the MLS have already been picked through by other investors, or you will be competing with them.

I have found the best way to find properties at a discount is to find the people myself.  I do this buy letting everyone I know that I am a real estate investor, and sometimes I get calls from people who are motivated to sell their house and are only talking to me.  This makes it easier for me to make a good deal, rather than if I am only one out a number of people looking at a deal.

Jason Hanson · Answer

If you are paying cash, don't pay more than 70%.  Buying a property worth 300 for only 250 is not a deal.

Dean George · Answer

250/300 = 83%

:roll:

also, if you read these boards a little bit more, buying in at 83% of market value, in this buyers market, isn't going to get you very far in making a real go of the RE business.

Unless you are buy/hold (waiting for the magic appreciation), that's going to be a huge cash drain unless you can rent it for ~$4k/month

Timothy W. · Answer

") Is it possible to find a 300k house to buy for 250k? That much instant equity would really jumpstart me into wanting to go forward!"

I don't know your area but I would have to imagine that you could find a home at better than 83% FMV in this current market.  Check out what realtor.com has listed.  In many places, listed REOs are cheap.

Jason Schmidt · Answer

83% sounds like a random number - is it?  How do i find out what the value should be?