So, i've been lurking BP and reading as many books as possible; (currently on Think & Grow Rich) but i'm no where near ready to start investing. Or, I don't feel ready. Well, I noticed this pop up near me and I'm curious on your thoughts just from looking at the listing page.
1) I don't see on the listing that it's a foreclosure, any idea *why* it may be priced $225K below the 2014 appraisal?
*The market appears to be decent in my area, we just went through the house buying process and ones we were interested were jumping off the market in days.
2) If you saw this in your area, what would your next step be? Would you be interested?
I'm not completely clueless on this, I have a general idea of what to do - but I am curious to your individual thoughts.
Thank you all from a first time poster!
Interested to what end @Candice Gold ? A $400+k rental? No way. A fix and flip? Sounds like it has already been rehabbed, although the "Investors Only" signals to me cash only, not bankable. That's weird.
I started small, with a mobile home investment after my first primary home. Bought for cash, fixed a bit, then sold on payments. I would not recommend a $400k house as my first property. Glad you're looking, though!
You need to call the listing agent and ask why they are selling way under the appraisal. Also ask if there are any known issues and why the owner is selling.
As a rental this seems way to expensive. Depending on what they say I suppose it could be a flip but if someone already rehabbed it then I don't know why you will do to flip it. Depends on what you find out from the listing agent. It is at least worth a call.
As far as being ready, I don't know that you will ever "feel" ready as you can learn everything and the best training is stepping out and going for it.
What are your goals with real estate?
I contacted (who I thought) was the listing agent, but it led me to a realtor who wanted to show me the house. Her *thoughts* were the current seller is an investor who purchased the property a few years ago as a foreclosure, remolded and is now selling. It doesn't make sense to me why they would sell $225K below appraisal, so you're right, I would definitely need more insight.
I agree with never feeling ready - this is actually the first house that has given me any sort of 'feels'.
My ultimate goal is to live off of passive income: house note, bills and living expenses covered. (Estimating 5K a month, any thing else is a sugar coating). I would also love to flip a house or two, just for the experience.
Steve Vaughan I have no plans to purchase this property. Like I said, I was curious on your thoughts of the listing. I don't understand why a flipper would ask 225K less than appraisal.
As an investor (much more than real estate), I have made my biggest mistakes with making purchases based on "feel".
There are ways to find out more about this home. Your county appraiser's office probably has records on the history of ownership of the property. This can give you clues. Talking to neighbors can also give clues.
@Harold Anderson - The only reason this house gives me 'feels' is because IF the numbers add up correctly as they APPEAR to be (I know that once I were to start digging it's possible to find out they do not add up), I could stand to make a substantial profit.
So, the agent emailed me this morning and told me a back story (along with sending me the 2014 appraisal). The seller is a contractor and purchased the house a few years ago as a foreclosure for 250K. He then gutted and renovated the entire house, adding on 1,500 sq ft. He is selling the house for 450K to liquidate his asset and free up some funds. The house appraised for 675K in 2014 and the agent says nearby homes have risen in value since then.
Again, I'm sure there's more to the story that I have to find out, but I'm just not sure if THIS should be my first house to purchase. It would be a BIG purchase, and I know there is no reward without risk: but as a rookie I am not sure to continue with it or let it pass.
I agree with the consensus, if houses are moving in your area, why would he leave 200k+ on the table? Maybe he wants investors only because there are known issues that need way more capital than he wants to put in (structural maybe?). Might be good for a flip (to fix whatever he isn't willing to, assuming that is the case) or a wholesale, but as a first deal this might be a pretty expensive flip. You might consider figuring out what is wrong with it, talk him down in price, and see if you can find someone to take it and pay you a finder's fee? Not quite sure how wholesaling/bird-dogging works in the real world, so someone else might have a better idea on that.
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