New to real estate and seeking some advice

Tucson, Arizona
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New to real estate and seeking some advice

Alex Kanaval
Member since 2022 · 4 posts · 3 votes

Hi everyone, I’ve been listening to the bigger pockets podcast for a few months and I’m very new to real estate investing.

I have an opportunity to get a townhouse for $15,000-$20,000 under market value. This townhouse is in very good shape and in a nice part of town and is owned by a friend of my sisters. He needs to sell it fast because they are moving out of state. My question is, if I pick this property up would it be better to try and wholesale it or buy it and immediately sell it or is there a better option? 

A little background on what I have going on.i currently live in Phoenix and I’m getting my house ready to be put on the market to sell and hope to have it on the market by the end of January. I’ll be moving down to Tucson some time in March. With what I’m listing my house  for, I should make around $50,000 profit. With this money I would not be able to purchase this other townhouse cash, I would still need to get a loan for it. My sisters friend wants to sell his property in March and I’m trying to figure out what my best option is in this situation.

I know opportunities don’t just end up in your lap like this and I want to take advantage of it. Thank you for any and all the help

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Matt Horn
Investor · Tucson, AZ · Member since 2020 · 15 posts · 10 votes
4y

Hello Alex,

Seems like a great opportunity with several options! Would you considering occupying the townhome? If so, it would make a lot of sense to buy it with FHA or a loan with a small down payment and capitalize on the low interest rates. Occupy the home for a period of time and then convert to a rental if you decide to live elsewhere.

If you are looking for a quick profit, the wholesale route may be the way to go but that really gets back to your investment strategy and goals.  If you are looking for long term holds, this would be a great candidate to buy as a rental.  

The biggest challenge in the Tucson market is finding good deals and you have seemingly found one, so this is an exciting way to kick start your real estate investment career!

Feel free to reach out to me if you want to discuss it further and good luck!

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  • Matt Horn
    Investor · Tucson, AZ · Member since 2020 · 15 posts · 10 votes
    4y

    Hello Alex,

    Seems like a great opportunity with several options! Would you considering occupying the townhome? If so, it would make a lot of sense to buy it with FHA or a loan with a small down payment and capitalize on the low interest rates. Occupy the home for a period of time and then convert to a rental if you decide to live elsewhere.

    If you are looking for a quick profit, the wholesale route may be the way to go but that really gets back to your investment strategy and goals.  If you are looking for long term holds, this would be a great candidate to buy as a rental.  

    The biggest challenge in the Tucson market is finding good deals and you have seemingly found one, so this is an exciting way to kick start your real estate investment career!

    Feel free to reach out to me if you want to discuss it further and good luck!

    4Reply
  • Cade Olof
    Real Estate Agent · Tucson, AZ · Member since 2020 · 103 posts · 64 votes
    4y

    Hello @Alex Kanaval! Sounds like you have a great opportunity on your hands. Is this townhome going to be your personal residence in Tucson? Or do you already have another place in mind? This would have a great impact on how you decide to move forward.

    3Reply
  • Alex Kanaval
    OP
    Member since 2022 · 4 posts · 3 votes
    4y

    @Cade Olof This place would not be used as my residence. I would like to take the profit from the deal and hopefully help set me up for others in the future. 

    1Reply
  • Bobby Hosmer
    Investor · Tucson, AZ · Member since 2016 · 29 posts · 25 votes
    4y

    Hey @Alex Kanaval

    Nice find! One suggestion I have is to be completely transparent with your sister’s friend, especially if you decide to wholesale it. Whatever the situation, it’s best to avoid bad feelings or put your sister in an uncomfortable situation.

    Second, how is the market value being determined. Is this property renovated? Then maybe a purchase followed by a quick sale would be best. If the property isn’t renovated, then wholesaling might be the route for you; however, most investors who purchase wholesale deals will want a substantial margin on their flips.. e.g. 15-20k below renovated market value doesn’t offer much room for end-buyers profit.

    Hope this helps!

    2Reply
  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    This seems like a great opportunity! What is the rental market like in the area? Since you are getting it for a cheap price you could probably cash flow pretty well. You might want to hold onto the property for a while, build up an income history and refinance later down the road to pull out even more equity that you are looking for right off the bat. 

    [email protected]614-502-5316Podcast Guest on Show #1
    2Reply
  • Alex Kanaval
    OP
    Member since 2022 · 4 posts · 3 votes
    4y

    @Bobby Hosmer I haven’t pulled any comps or anything yet. This all kind of fell into my lap the night before this post. He’s wanting to sell the townhouse for $185,000 and it’s in a nicer area of town (speedway and Harrison area). Everything I’ve seen in that area is well above what he’s going to sell it for.  I know he’s done some upgrade to the house but I’m not sure everything he’s done. 

    I talked with him yesterday and I’m going to be in Tucson next week so I’ll be able to go a check it out in person and see what he’s done to it. 

    I’ve been interested with getting into real estate and I’m very new at this so any and all information is a huge help. 

    1Reply
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