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| Real Estate Investing from the trenches |
By:
Terry Murphy |
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The first order of business is to start doing business. The first lesson a real estate investor needs to learn is how to deal with the word "no."
My first deal was not that hard to find. It was a simple listing on the MLS that needed work. Of course, I had looked at over two dozen other properties, all from the MLS, and made an offer on over half of those. Going through real estate agents I received a "no" answer most of the time. This little exercise is what separates the "new" investor from the "wanna-be" investor. If I hadn't made it through the dozen or so rejections, I would have never come to that first $32,000 pay day.
Also realize that a lot of those offers I made were WELL below the asking price. I expected to be turned down. This allowed me to get used to the "no" answer, and at the same time, learn my market. I was able to see a wide variety of asking prices, and learned fairly quickly how to estimate repair costs. When I made offers, which were no doubt considered "low ball" by the real estate agents involved, I would always extend the courtesy of submitting my repair estimates with those offers. Here is a little tid bit that cut my repair estimating time in almost half: Get one of those laser tape measures, if you can swing the $99 price tag. Get your measurments and then it is a snap to estimate flooring, painting, trim, sheet rock repair, and a myriad of other little costs. Also, make out a general repair list that you can plug those numbers into, preferably a spreadsheet, and print out a fairly professional looking repair list. I make two lists. One to give to the seller or their agent, and one that estimates my actual costs. The one that goes to the seller represents the retail costs of the repairs needed. I then bid out the jobs until I get the numbers I print for myself. Right now is a great time to buy, because even the contractors are hungry for work!
When I received that first acceptance, my offer was over $20,000 less than the asking price. When I got a "yes," I didn't know whether I should be excited, or scared. The house was one helluva mess, and I seemed to be the only one able to see the potential. I do give a lot of credit here to my wife. She also saw the potential, therefore, I was allowed to proceed :)
Four months and $22,000 in repairs later, we landed a buyer selling by owner at an open house and closed within 45 days. Not bad for a first timer that spent not one minute in any seminar, and the only money in my bank account was a couple of thousand from a student loan. Talk about "Zero Down!"
Since that time I have learned a lot more, even how to survive a sub-prime melt down. I hope to share more stories from the trenches in the coming months.
Here's to the first step.
About the author:
Real estate investor surviving the sub-prime meltdown and fortified in the trenches of day to day investing.Rehabber, wholeseller, Hard-money veteran, subject 2 veteran, and willing to share knowledge with new investors and old vets alike. The more we learn, the more we earn. Just don't forget to take ACTION. Much prosperity! |
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