Investment property questons...

[Hatterasguy]

http://cgi.ebay.com/Wolcott-CT-near-Cedar-Lake-redone-inside-rented-now_W0QQitemZ4439122242QQcategoryZ12605QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

Look at this place. $90k asking. 10% down with a 30 year fixed rate if you could get those terms. $800 a month rent. Looks like it has the potential to throw off $400 a month ish. Owners a jerk, has some problems that require much deeper investigation. Also would need to plug other costs into the model.

http://cgi.ebay.com/FORECLOSURE-VERY-NICE-AREA-5BR-HOUSE-ON-1-2-ACRE-NR_W0QQitemZ4438245677QQcategoryZ12605QQrdZ1QQcmdZViewItem

Look at that price. Looks like a somewhat half way decent area as well. Would need much more research and a local CMA though.

I can't wait to get acess to the MLS system.

I know some of you guys do this so what do you think from this very limited info.

[kerry]

I've got some rentals. I prefer small multi-unit dwellings to single family. In my area they seem to return more on the investment. All the septic problems he describes is another way of saying, "Needs a lot of $$$$ to fix" in my view.

$400 a month on 90K.....

Run away.

Whoops, it's so-so $ 800 I have no idea where you are going to profit $400 a month though. You need a 12c.

[raymr]

They both need work. Serious stairs on house 1 can be treacherous in the wintertime, let alone carrying groceries and trash up and down every day. House 2 needs serious paint and carpet, at the least. As always, the quality of tennant you are able to get and keep has a big bearing on whether your rental investment is a success or a money pit. Some tennants' favorite phrase is "Hey, it's a rental". I myself am glad to be out of that game!

[Hatterasguy]

I'm just looking now. That ebay ad kind of cought my attention, because well look at the way the owner wrote it. Looks like a pit.

I am not looking to buy anything for another year or two. I don't really like the idea of resdiential rentals either. But thats where I will start, I want to move to apartment buildings and condo's as soon as I can get the capital together.

Maybe I should just work on finding lots and selling them to my Uncles.

Jeff you do lending don't you? What terms are typical for investment properties? Does it depend on the return expected?

[cscmc1]

Man, look at this crapbox.

http://cgi.ebay.com/House-in-Iuka-Illinois-Marion-County-NO-RESERVE_W0QQitemZ4438933653QQcategoryZ12605QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

Just for giggles I decided to see what was available near me and found /that/ listed inside the 75 mile radius. Sheesh. You'd think they could at least shovel the garbage out and burn it before taking pics!

[Hatterasguy]

Maybe the lot is worth something?

Originally Posted by Hatterasguy

Jeff you do lending don't you? What terms are typical for investment properties? Does it depend on the return expected?

Commercial and Residential, licensed to lend in all fifty. Anticipated rent in only used for qualification purposes we in the lending biz don't mess around with rate of returns because we put your own behind on the line.

If you have good credit (680+) the typical adjustment is 1% but that depends on a variety of strengths or weakness's the borrower may have. If you have a 720 or higher you can get a conforming rate, with 740+ I can get an automated underwriting response and there is no request for any further information and we can close in a few days. There are many circumstances involved, you can give me a call anytime and I'll school ya and make you dangerous.

Originally Posted by Hatterasguy

Maybe the lot is worth something?

Never fish for value, either its there or it isn't. There are wayytoomany opportunites to take rookie risks in real estate, leave that stuff to dumbchits like me I have learned to sleep at night while the interest piles up.

[Brian Carlton]

The first house has issues with the proximity of the septic system to the water supply. If you tested the water, it will surely read high in bacteria and phosphates. Once that happens, you've got an ongoing nightmare to convince prospective tenants that it's safe. Additionally, water pumps are notorious for causing you plenty of money over the years.

If you bought it for $90K and didn't invest a penny, you would be just about breakeven after PITI with a rent of $800. per month. In today's market, breakeven is not a bad thing, however, the risks associated with the septic and water systems are too great.

The second house is the ideal purchase. Looks bad........shows bad........but, you might get it to a proper condition for $25K as the seller suggested. So, if you could purchase it for something around $70K or so, it would be a good investment. It might even be worth more.........but.........need to see the location......values in the area.......and rental income for a house of that size.
I would never buy this house personally, because I don't live within 20 miles of it. If you can't visit the house, notice and take care of the small problems, your house will quickly turn into the second house.

[Hatterasguy]

Thanks Jeff I may take you up on that in the next year or so. My currant Fico is 730. I will bump it up this year a bit, according to them I need bigger accounts. I think if I open up a credit card with a high limit and keep the balance at pretty much $0, that should bump it up a bit.

I am going to start local but I see no reason why I won't eventually buy properties that are pretty far away. I just need to get experiance and practice.

I am looking long term, so buying cheap fixing up and renting is what I am interested in. Flipping is might do but it isn't what I am looking for.

I am just getting into this real estate thing.

[koop]

I own out of state land but I'd be real hesitant to own an out of state house. Kinda puts you at the mercy of property managers. Then again, I'd be real hesitant to buy rental houses right now anyway, but that's a different matter.

[kerry]

Originally Posted by Brian Carlton

.
I would never buy this house personally, because I don't live within 20 miles of it. If you can't visit the house, notice and take care of the small problems, your house will quickly turn into the second house.

My limit is about a half mile.

[Brian Carlton]

Originally Posted by kerry edwards

My limit is about a half mile.

........LOL.......yes, I agree. My new current limit is zero.

Been there and done that for 22 years. I'm tired.

Hey MedMech,

I wanna get schooled and be dangerous. No joke-i'm taking my sales agent test and moving to florida. Any online sources or books you recommend?


cheers,
dan r.