So. I've read quite a few books about investing, I've listened to most of the podcasts, and I've networked with a few local investors. The number one thing I've learned is the best way to get started is to go buy a property and figure it out. I'm looking for my first deal in New Orleans. I want to flip a single family 3 bd 2 br. Opportunities seem to be abundant. Does anyone have any suggestions? Or would anybody be willing to partner up?
It has become very difficult to find a good deal in our market. Our area is completely saturated with investors, which has squeezed margins making it more and more difficult to find a good deal and make a nice profit. For example, an off market seller I was in contact with sent me a picture not too long ago of all the postcards, letters and various pieces of direct mail he had received in about a 6 week time frame... there were about 25 of them! All the same yellow letter, we buy houses, etc, etc stuff.
At this point it is just about impossible to find a good deal on the MLS, and the competition for REOs of any kind is through the roof with multiple offers on every property driving up the price well over asking. In order to find a good deal you have to find it off market, but even then there are so many people doing this (wholesaling, bird dogging, etc) that it also has become very difficult to get a good deal from them as there is usually a few hands in the pot all wanting a piece of the action.
My suggestion is to do things differently if you want to find a good deal. And make sure you find a seller that truly needs to sell, not one that just wants to sell. They need to be a distressed seller with a real need. Once you find them create a win-win scenario for the both of you. Good luck.
Braden is correct. Every now and then something will pop up on the MLS, but it is gone cash over asking in a couple hours. I'm finding a couple with a new strategy, but I don't know how long it will last. It took my partner and I a while to figure out. I don't believe I've seen it ever discussed. Just mentioning it because there are ways, like Braden said, but they are very outside the box or private deals.
@Pat Haggerty do you mind sharing what you're doing?
@Jordan Cardwell Hey Jordan, I agree with most of the statements above. It is very hard to make the numbers work in the New Orleans market currently.
Have you tried looking outside of New Orleans proper, such as the Westbank, Slidell, Laplace, Hammond, or even Baton Rouge? The numbers are a lot more generous in those areas. You might be missing the convenience factor of having a property in your backyard, but most of the areas mentioned are within a 45min drive.
Let me know if you need any help looking!
Well @Jordan Cardwell I have to say that if you read that "the best way to get started is to go buy a property and figure it out" I recommend you look up the recommended reading list. There are two kinds of risk. Careless risk and calculated risk. The better you get at calculating risk, the better investor you become. You never eliminate it, you just get better at identifying it and minimizing it with experience. One of the most important strategies to minimize risk is to "make your money, when you buy." The key to that is WHEN you buy, not after you buy.
When you put serious money on the line as a real estate investor, the most important thing to know is, do I have a good deal on my hands. A good deal always includes a margin for error/safety/profit, IMO. A deal can go awry after you buy, but the best thing you can do to prevent that is in your decision to buy.
Yeah, I also read not to get stuck in Analysis Paralysis. @Robert Leonard . With that being said, I'm continuing to read and learn. I also don't plan on buying the first property put in front of me.
When you say "the best way to get started is to go buy a property and figure it out" you offer no suggestion of ANY analysis until maybe after the purchase? I'm looking to make this point clear to the novice investor who reads these posts and forms ideas of how to get started in this business. It touches a nerve when I hear "jump in and and learn from your mistakes" or your own statement. Those flippant statements are irresponsible.
Am I suggesting that you paralyze yourself with analysis? I'm saying there is a method to the madness and there are fundamental strategies to minimize the risk and they happen BEFORE you buy. Analysis is necessary in making sound investment decisions and it is best applied before buying.
How do you know when you are ready to start? You'll know you are ready, when you know a good deal when you see one.
Well I'm sorry for the misunderstanding sir, but I believe my point has been misconstrued. I also don't appreciate the attack on my comment. My point is that I need to start. Let me ask you a question have you ever made a mistake when buying a property? Have you missed something when you bought an investment? Did you have to "figure out" what you are going to do once you discovered your mistake? My point is that I don't want to be afraid of mistakes I might make. At the same time, that doesn't mean I'm not going to apply the analysis I've learned. If I were to do what you are suggesting I would've bought a property last week. Finally, such unwarranted attacks such as yours towards a novice would motivate most never to buy a property which I don't believe was the reason this website was created.
TRUCE! @Jordan Cardwell
I'm not attacking you personally, but yes I am attacking your specific statement. My point is that words matter. The fact that you are an accountant, gives credibility to your statements, no matter what your level of experience in REI. I've made my point so I won't rehash it. I've made enough contributions here on BP that I think it's very clear I'm here to help other investors, no matter their level of experience.
Have I made mistakes, learned things the hard way and am I still doing that? Yes. You never know it all. The type of things that go wrong or I miss are small things that amount to a bump or a bruise and there are always the unknowables. They are to be expected, and that's why I budget for waste and contingencies. If some unforeseen major expense makes a deal unprofitable, my risk is spread across a portfolio of properties and at the end of the day, all of my eggs aren't in one basket. If I didn't know what I was doing, I could easily break a leg or lose an arm. That's the difference.
I'm here to help others learn and grow, so they spend less time learning things the hard way or taking what I see as unnecessary risk. I'll be glad to help you too. Sure there are some things that are most effectively learned by experience. For the impressionable novice investor reading these posts, it's important that you understand how to manage/minimize your risks.
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