Possible first deal...unsure if I should do it?

Question

Hello EVERYONE! :-)

I'm Henrietta and for the last 3 months or so, I've been studying wholesaling investing and contacts. I actually prematurely approached a seller a few weeks ago, with a offer. I was nervous and obviously not knowledge enough. She went with an established group of investors.

I need a competitive edge. When I first started studying real estate investing. I came across a double Decker deal. It's two homes right next to eachother. I nervously called the owner. This was before I knew anything about wholesaling or real estate. I didn't even know it was possible to contract homes with no credit, no money and receive all cash offers. In fact, when the guy told me that he only wanted cash. I laughed at him and said, "who has cash line that?!"

Needless to say, I'm embarrassed now. Anyways, I happened to drive by the properties today. They're still for sale!! They are quite a ways a way from me. Anyways here is what I know about them so far:

1st-4 bed 2 bth/ finished basement//attached garage/ full yard/

A.P.-$166,250 & $144,440 or both houses for $245,600

A.R.V.-$211,250 & $189,440

The owner told me he almost had a buyer but the buyer backed out. At the end of the call he said he only wants me to make an offer if I take both. I am still unclear if he won't let me offer on one. WHAT DO YOU SEASONED EXPERIENCED INVESTORS THINK? Should I wait & learn more about contracts etc.? Or should I go for it??? HELP PLEASE :-)

Brian Gibbons · Answer

pricing rehabs and learning rehabs

See @JScott books on flipping at the BP Store

See my posts about helping pretty houses

http://www.biggerpockets.com/forums/12/topics/1801...

Best of luck!

Forrest Atkinson · Answer

I know that deal may seem like an awesome way to start out, but buying lower cost homes is the way to go when it comes to getting started in my mind.

less monthly outflow in the long runs works out well

Henrietta M. · Answer

Thank you Justin B. I've just become pretty passionate about real estate investing, wholesaling, lease purchase options & buy and holds. After listening to Robert Allen's "Multiple Streams of Income." I have been HOOKED.Also, I want to study a bit more before jumping in. I think Action is definitely necessary, but after the first offer. By the way, the first house I offered on was a bad but great learning experience. She asked me questions I couldn't answer. I pretended to know what I was taking about but she knew I HAD NO CLUE. I know the answers now but more studying and actually shadowing a successful investor wI'll be my next step.

Justin B. · Answer

Henrietta,

Your first step of trying to get out there is great.  The only way to get experience is to do it.  Don't be afraid to fail, and don't be embarrassed.  With that being said, if this size house would completely break you if it failed, it wouldn't be a smart move to do it at your experience level.  The reason I started out buying sub-$100k properties is because worst case, I'm out $500-$600/month if it didn't rent.  That's not a small amount of money, but if I had to pay that all of a sudden, it wouldn't break me.  So getting my feet wet was pretty easy knowing I could cover 100% failure without financial ruin.  I now have 9 of these properties and got them all rented within a couple of months of purchase.

So I know I'm not answering your question about the deal directly.  Perhaps you do need a little more education, but all I read was a lot of books before I bought my first property.  Of course I was nervous but buying within your comfort zone makes it a lot easier.  I didn't even find BP until I had 5 houses.  I had book smarts and no experience.  I jumped into a comfortable depth and now I have loads of experience and feel comfortable jumping up to the next level (Which for me is Multi-family).

I wish you all the best!

Henrietta M. · Answer

yes, I've been through them, but I'm so inexperienced

Derrick Strope · Answer

@Henrietta Mateaki have you gone through these properties to put together a good cost of repairs needed?