First, Best, and Last Real Estate Investment--will always remember them.
Since we are talking Real Estate, three houses and different strategies come to mind!
First house was a 3 bedroom 1 ½ bath home in a great location. I was at Lowe’s shopping for materials to repair another person’s house, received a call from my real estate agent, and went over right away. My offer was not the highest of the two submitted, but it was not contingent on mortgage approval. They walked away literally after the selling agent reduced her cut. It had been let go, which was an understatement. The dishwasher failed several years ago, the stove had a cinder block in front of it to keep the door closed, the dryer element was shot, the heat and A/C was not functional, etc. Spent 2+ months working between handyman jobs and flipped it for $23,000 profit.
Best was a 4 bedroom 2 bath that had been rented for years and the owner and tenant feud let to a foreclosure. I found it by driving the neighborhoods and it was only a few doors from my flip house. It was much worse than my first, but was able to get into it for half of the flip house. Spent 6 months working on it and barely finished as the tenants were moving in, yes my strategy has shifted. Roof, floors, doors, walls, bathroom, and kitchen all had to be redone. Should clear $60,000-$70,000 profit when I sell.
Last deal was closed yesterday. Found on realtor.com. Was listed on the MLS of a city 90 miles away, so local Realtors could not see it. Made offers every month for 9 months. Bank owned and USDA backed. The unfortunate banker did not know how to handle it and the paperwork was messed up. Finally they took the only offer on the table and will end up being a really nice rental. Should be able to double my investment when sold. Needs cleaning, a little paint, and only minor repairs. Owner tried to short sell, then filed bankruptcy, finally bank took it back a year ago. The house is less than 6 years old, with Jacuzzi tub, fireplace, and higher end finishes.
So what are the lessons? Not one strategy for finding or for exiting. Have a few friends that still flip, helped one buy on court house steps, still buying tax liens, and good old driving around works. The biggest thing I can tell anyone is to adjust to the market and please listen to advise from trusted sources.
What is your plan owning a rental 90 miles away? Will you be managing it or hiring the management out?
Actually the listing agent is 90 miles away, the house is just a few miles from me and in my desired area...
Dstew,
So what do you consider fair market price? I saw in the forums that you are targeting houses that are 50% or below fair market price? Are you getting them appraising them at all before you purchase?
Good advice. Thank you for writing this post.