So for the last few years I have been interested in the idea of Real estate investing, but have suffered from a bout of paralysis, so it had fallen to the backburner for a time while I worked my life away at my office job. Then a few weeks ago, it began to dominate my thoughts again, to the point that I know this is what I have to do. Almost simultaneously, a friend of mine(who has no idea I am interested in real estate investing) tells me he will sell me his duplex in my hometown of Alma MI for $10000.00. He was willed the house and has never really lived in it, he has let a friend of his live in it for the last few years for free. To me, this was my sign, that this is the opportunity to take action and get into the investing world. The house definitely needs work, as he never lived in it, and is not the type to keep up on repairs, but it is not in complete disarray by any means. I guess I am writing this because the paralysis is still there in my mind, and I am wanting to just use this place, because flop or not, it would be a first stepping stone. Maybe I am writing this hoping some more experienced guys out there will tell me "its a bad idea" and then I have an excuse to carry on being afraid to jump in. My mind works in mysterious ways! My main question though, is it possible to get a mortgage for a house that is only 10000$, or is this out of the question?
Allan, sounds like a good deal from what you described. 10K for duplex-probably will cash flow a bit. You may want to link up with someone on here that knows the area and can possibly walk it with you to help assess the opportunity. There are many financing options as well. BP gives us the platform to link up to private money with decent terms. Search around a little on this and see who you can link up with.
All the best!
Thanks Ty! Getting someone familiar with the area to have a look at it is a good idea. I do not own a house already, nor have I ever tried! So the financing part is a little daunting to me. I have worked for a contractor in the past so am fairly confident I can do a lot of repairs myself, it's just the initial "wow am I doing this" feeling I need to overcome! Thank you for the advice!
I can't imagine successfully landing a mortgage on a house like that for $10k - it's just too far below the threshold most banks are willing to deal with. If you have decent credit you should be able to find a couple of credit cards, or get a personal loan for that amount of money.
Whether or not it is a good deal depends on the amount of work, the market for tenants, whether you can afford vacancies, repairs, maintenance, etc. It's hard for me to argue against a house that costs $10k, but on the other hand there are a lot of properties nationwide that can be had for free because they are albatrosses.
I would say that if you cannot come up with that level of funding outside of traditional banking (mortgage), you are not ready to own rental property. You need to have a greater asset base. Owning rentals is great but it is more than just coming up with the purchase price. Don't let fear paralyze you - let ration and reason paralyze you. If you cannot reasonably come up with that low level of funding, you should work on compiling a greater net worth before going that direction.
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