Monday
February 22, 2010
My colleague at Rehab Man Mortgage, Ron Parello, and I have been touting the opportunity in purchasing foreclosed homes in Chicago and providing financing solutions. (Download our mp3 now on how to use the FHA 203K loan to buy homes.>>>) Our formula is simple: fix them up and then re-sell them at an affordable price to first time buyers who are taking advantage of the tax credit to purchase homes. And while the formula is simple, the details of execution are critical to ensure success.
Last week, I did a price opinion on a bank owned property in the Austin area of Chicago. While doing my research, I came across a couple of properties that had been purchased by investors using our formula. One property that comes to mind was purchased for $24,000 and was back on the market for $19,000. Clearly, this is an investor that got caught in a bad investment! However, a quick drive through the neighborhood will point out why. On just one block alone, there were 10 board-ups!
The first three rules when buying real estate are:
1) Location
2) Location
3) Location
Now, mind you, at the time this investor made his purchase, perhaps he felt the area was beginning to turn. And, for sure, it’s hard to imagine being able to buy a property for the price of a car NOT being a good investment – eventually.
Another thing I noticed while doing this research. I discovered an investor that owned several properties in the area. However, he has a different strategy. I noticed that this particular investor purchased one property for $7500. Rather than trying to sell it, he has it rented and is currently generating $1600/month in rents on the property. When you can successfullycash flow a property, it is easy to hold on to it - as long as you don’t mind managing it. The beautiful thing about real estate is that IF you buy in at the right price, you can always make the investment work.
To get more tips on how to successfully create High Yield Investments In Wholesale Real Estate, download my report now. Sold at my live events for $19.95, it is yours free if you register now.
“To Your Success!
mary!
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