Beginner Investor Wants Some Direction
I have 100k to invest, and I'm not sure whether to take on a partner to begin flipping, or to find a house on my own and start from scratch. I don't have a team yet, though I'm tight with a realtor, who's been helpful with advice. Anyone in ABQ want to throw some opinions my way?
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Hi @Levi Borunda - I'm also a newbie to real estate investing and am also from Albuquerque! Wanted to say "what's up!" Although we're looking at investing more in multi-family properties (but flipping if opportunity presents itself) I can tell you that we've been looking here in ABQ for 6 months and find current real estate here is exceedingly overvalued. Although few foreclosures, we've put offers in for a few and have been beat by investors buying properties at or above market rate for properties needing serious rehab. Prices are at an all-time high, inventory is low and demand is high. Not really a good market for buying/flipping under value deals.
Have you looked at MLS lately? You'll notice there are "flipped" houses that were purchased at or above market rate 1-2 years ago listing for double todays' market value today. It seems to me flippers are trying to find a new game - attempt to drive up value for reno'd houses. I can't tell you if they're successful yet - but usually the properties sit on the market for awhile with one price drop after another until an out-of-towner (ahem California) comes in and thinks they're getting a smokin' deal. Check out this property out: 4001 Avenida La Resolana Ne, Albuquerque, NM 87110. Purchased in 2016 for $238,700, currently listed at $460,000, originally listed at $475,000 almost 3 months ago. I checked out the house and can tell you the finishes were not high end. $/sf are outrageous compared to comparable properties in that area. Only a sucker will pay that much for that house. Seems flipping with the method above would be risky to say the least.
That being said, since you've been listening to BP podcasts, you'll know MLS isn't always the best way to find the deals. Although I haven't done it yet, finding creative ways to get deals might be where it's at right now. For example, send out mass mailings to out-of-town landlords sounds like a good idea. Also, might want to get in touch with local wholesalers.
If you figure anything out about the ABQ market, definitely let me know. We look obsessively but haven't been able to find a property that meets the numbers (based on BP tools).