Hello, Im brand spankin new to biggerpockets. I have been bit by the real estate bug and now theres no going back. With all the opportunities in this field to grow and prosper, I'm elated to say the least. Joining biggerpockets is great for the fact that I can converse with like minded individuals and exchange complicated scenarios. In addition, I happen to have one. Recently, I've been back and forth with a homeowner who happen to finally agree on a price to buy his home. The issue is that it is in Wells, NV. The population is about 1,300 and overall it is a small town Northeast of Nevada in Elko County. It has been somewhat of a challenge because ideally, my goal was/is to find another investor to purchase. This is a beautiful log cabin home with navy pine, natural wood, rec room with hot tub, 1 car garage detached. There has been an addition to bedrooms, 2/1, 1,464 sqft with a empty lot next to the home decent sized, great for an RV that will be sold with the home. Help, any and all advice and suggestions im willing to take.
Welcome to BiggerPockets! Its a great bug to be bit by.
For a house like that, analyze it carefully and determine what your exit plan is - and what your backup exit plan is. Is the upside you expect sufficient to still be profitable if you have to hold the property for 6 months instead of reselling it when you close on the purchase? Are you expecting to do any rehab or improvements before you sell
What is the market like in Wells? Do houses there sell? Can you rent it out profitably if you cannot resell?
Thank you for your response. Yes my exit plan and really my main goal was to sell to an investor. From what I have gathered from multiple individuals in Wells and/or Elko is that Wells is a ghost town. Nothing goes on out there, I mean the population is about 1,300. I've called churches and the one realtor office that is local there, husband and wife owned. From all the Information I've gathered with them, lets say when they list a house for sale it takes anywhere from 100-160+ days to sell. My mentor/coach states that could be there box and my goal was to sell to an investor. To be honest I'm 6 hours from the property and haven't been inside to take pictures. Although have received details and rapport from the homeowner which is all scrambled. So, I'm definitely going to make a trip down there and check things out for myself. This would actually be my first deal, so no definitely would not want to hold for any amount of time. I have another 4 months to close. It hasn't crossed my mind to rehab prior to selling. Once going to the property, prospecting, taking pictures and what not, I'm sure I'd have a better idea of what direction to take. Great idea to rent out, that hasn't crossed my mind yet actually. Still figuring options out. Thanks for all the questions, never thought or considered some options or idea's you brought up.
Consider this - if you are planning to sell to another investor, what about this property do you think would be compelling to another investor? What is the investing thesis for the property, how will it actually create capital gains or cash flow not only for you, but for the investor who buys it? Will the market support that investing thesis?
If the thesis is solely the greater fool theory ("I will make money on this because someone will surely pay more than I paid for it"), how can you ensure that you are not that greater fool at the end of the chain?
Not to throw cold water on your plan, but it doesn't sound like that local market is going to give you a very good experience as a first time investor.
Yes, my thought process is what is the takeaway for the end buyer. I'm looking at ROI % and making sure I have accurate comps to show them and what a 30 day ARV would look like. This just happened to be my first opportunity, I was trying to get ahold of a lady for a vacant property and the guy I called mentioned a house he had that he wanted to sell. I'm selling at one hell of a price due to the area. Meaning the end buyer would benefit more than myself which is okay. As long as I walk away with the knowledge and something in my pocket I'm happy. The end buyer can flip this property and make 30k or buy and hold and its below 90k. Possibly keep it for themselves if they want as an option.