Im new to real estate investing and looking to do rehabs. I have read a few books, and listened to several tapes, DVDs, etc. They all seem to say my purchase price should be 70%ARV minus the repairs. I have had quite a few Wholesalers and Real Estate Agents send me lists but none of the properties even come close to that formula for my purchase price. And the people I have spoken to say this is a "tight" market.
Should I be patient for the right deal? Or am I using the wrong formula in the Phoenix area?
Thanks for any input!
Hello Bob I am also new to this and have just started my research in to flipping houses also. I have an older friend that has been doing this for years and owns several homes and apartments. He uses an asset management company to locate foreclosed properties, also you can go to your local chamber of commerce and ask them for a foreclosure housing list if they don't have it they can point you to who does. This is where I am going to start because the houses are being sold at a very low cost. The big thing to remember is to make sure it has a clean title with no liens on it. I hope this helps you get a start.
bob, it is a tight market here. I have been doing 2-3 flips a year consistently for the last 4 years here in the metro phoenix area. This year it will only be one and I have nothing in the pipeline. The numbers just don't make sense right now. People will tell you there are always deals to be found and that's true, it's just a matter of how much time you want to spend finding them. I work full time and I value my free time so for me personally it hasn't been worth the effort it takes to find a deal right now.
Thanks @Larry Hood! I appreciate the advice and will look into that.
@Albert Hasson I appreciate the input as well. Are you using anyparticular formula to determine if a property is worth the effort? What kind of profit do you make on a flip?
Thanks again for any advice or input!
Hi bob! I'm a newbie here as well and and recently moved to Phoenix. So I got a couple of things working against me. My belief is there wIll always be deals. You just have to find them. I recently listened to a couple of the bigger pockets podcasts and found some interesting and creative ways to find deals... Even in a dry market.
Welcome. Thanks for your service. 30+ yrs LE here. Time to build the foundation below.
Check out the Start Here page http://www.biggerpockets.com/starthere
Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.
Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.
Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.
To find out about an area and potential deals go to IREM.org search for ARM certified property managers. Call 5 ask them what sides of the city they like/dislike and why. Ask what they see them selling for and what expenses are by category. Ask for market occupancy and rents. Ask if they know anything coming up for sale.
You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over