buy properties from other investors? need feedback

8 Replies

Hi guys,

I went to an investor club meeting yesterday and they are offering some contracts (wholesale price) for a pre-built or watever it's called. After the building project is done, we have to close the deal or something like that. Is this normal in a club meeting?

Also after the meeting I got a chance to talk to several people and one guy know that I'm just starting so he's offering some duplex for sale in colorado for about 50k - 70k with "positive" cash flow.

How do I know if these are true? I'm a total newbie so dont know where to start.....

Do you guys think I can start with the cheap duplex since I dont have any money rite now....

Please give the newbie some suggestions..... :oops: :oops: :D :lol: :lol:

Let's see, you're a total newbie, these guys are PROFESSIONALS, you don't seem to know any details of the financing or the deals. Let me point out a few keys to successful investing.

Whenever ANYONE offers you a deal, get ALL THE DETAILS, who, what, when, where, and most important, HOW MUCH?

Never go into any investment (this applies to stocks too, not just RE) that you don't completely understand and can explain to ANYONE else, how the program works, how much you have at RISK and how much is your ptential reward.

INVESTORS own RE for only ONE REASON. To maximize their PROFITS. They don't do it because they're bored, or for bragging rights (well, maybe a little bit) and they don't do it to GIVE GOOD DEALS to wannabe investors. If investor A (the other guy) is MAXIMIZING his profits, you can bet that investor B (that would be YOU), is NOT.

After you've read and understand all of the above you'll have the answer to your question.

Oh yeah, don't go into deals more than 30 minutes from your home.

all cash

Oh yeah, don't go into deals more than 30 minutes from your home.

Thank you very much for your input....

The problem is I dont have much money for a down payment with the high price in my area (Orange County, California).

I can either wait for a couple of years or invest outer state? I dont really know any where that's cheap in California rite now.....

Thanks again

Originally posted by "thisryanguy":
The problem is I dont have much money for a down payment with the high price in my area (Orange County, California).

I can either wait for a couple of years or invest outer state? I dont really know any where that's cheap in California rite now.....

Thanks again

I know the feeling, I myself is in Pasadena, Cali. Alot of people just dont feel what we are feeling here in southern california atm. Quick example, if you want to buy a SFH in Compton or South Central, you are talking about 300k-400k get the picture?? So I also am forced to look out of state, and I also am a newbie but I am determined.

It's tough to get cashflow in CA right now. I've seen a few properties come close in central CA. I was recently able to make couple of properties cashflow on paper in a small town called Taft. There might be some possibilities in Fresno or Bakerfield too.

Have you considered other nearby states like NV or AZ

What do other forum members think of NM? I can cashflow properties there but I just can't see the appreciation.

Hey TonyB, what do you mean, "cash flow on paper"? Does that mean you put a bunch down in order to make the place cash flow over and above your note? Hope not.

I've looked at some places in NM, I live in central TX so it's only a long day's drive and the cash flow looks pretty iffy, and their appreciation is pretty much as bad as ours is. Ppty taxes are much lower than here though.

I dumped my last rental in about 2000, just been doing seller financed flips since then, very successfully I might add.

all cash

Originally posted by "all cash":
Hey TonyB, Hi there! My reply is in TEAL. what do you mean, "cash flow on paper"? Does that mean you put a bunch down in order to make the place cash flow over and above your note? Hope not.

When I say cashflow on paper, I mean that I have not bought the property but just worked out the details on a spreadsheet. For example, I was in Albuquerque two weeks ago and found properties that cashflowed with ZERO down as non owner occupied purchases. The case in point was an old triplex and IIRC got about $350 per month rent from each unit. The price of the Triplex was about $97,000. It just barely cashflowed. As for the Taft property, I think it needed 10% down.

I've looked at some places in NM, I live in central TX so it's only a long day's drive and the cash flow looks pretty iffy, and their appreciation is pretty much as bad as ours is. Ppty taxes are much lower than here though.

I found a few examples in NM for break even or tiny positive cashflow but I just couldn't see the appreciation unless I just used the past 1-year, which isn't realistic to do. I have a few friends in the are area and they told me how much they paid in the areas they lived and when they bought. A few calculations later, it was clear to see that appreciation was barely keeping up with inflation. Maybe different parts of Albuquerque had different results.

I did a lot of investigation for the three days I spent there and found that they are building a lot of new homes and infrastructure to the SW and continueing to the NW in Rio Rancho etc. So speculatively it is possible to see appreciation but I hate to speculate. Just not my thing.

Also, the high plains desert is a tough place to visit. I mean, the air is thin and the temperatures vary widely. It even snowed when I was there. I hear they get a lot of sunshine though. Did I mention the air was thin? :D

I dumped my last rental in about 2000, just been doing seller financed flips since then, very successfully I might add.

all cash

Please, if you have time to elaborate on your success so that we may pick up the technique of a few tips.

Just experimenting with using this forum. Thanks for the feedback.

I did see your new thread, I'll post a comment over there.