First Time Investing

[Jasmine Claye]

What is the avg price of a starter investor home? I've

heard someone say that you can purchase one for about

35K. Is this true? If so, the repairs must have been a lot of

money. A home for 35K could run repairs from 20-30K

correct? Which is a total of 55-65K. It is a trade off

between purchasing a house for cheap with a lot of

repairs, and purchasing a house that costs more

with less repairs so how does this affect the loan?

[J Scott]

Originally posted by Dimas Garcia:

J Scott,

Wouldn't you say that a $15k profit margin is too low and may leave you even if the rehab ends up costing more than estimated? It seems like a much more risky way of going about it.I'm a complete novice, so I'm not pretending to know the real deal, just asking.

These deals where I accept about $15K in profit generally take less than a week to rehab -- some less than 2 days -- and have very little risk of running over budget (we've done this quite a few times and generally know to within a couple hundred dollars how much a typical cosmetic rehab will cost us).

Additionally, we generally hold these properties less than 100 days (from purchase close to sales close), and my wife and I generally have to put in fewer than 10 hours on the project ourselves, so $15K is a decent return on our time invested.

Lastly, we're happy to take relatively small returns on easy projects if it means being able to spend $10-15K on our contractors -- we like to keep them busy and the busier we keep them, the cheaper our future work is, and the more we make on future projects.