Thursday, May 18, 2006
Some calls
I finally started to get a couple of calls from my postcard mailout. Unfortunately, the first person never left a message and the second one doesn't look to good - even if I buy it with $0. Running the numbers, it appears the only way I'd make a profit would be to buy Sub2 with almost no money out-of-pocket, hope there aren't any repairs at all (at least not over $1k), and sell it within three months max via owner financing. Even then I'm only looking at around $12k profit in two years at the very best, which is borderline for me.
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4 comments:
I havn't read your whole blog, just quickly perused it.
But from what I've seen, it looks like you've had a tough time actually jumping in and getting involved.
I'm thinking you've got an angel on your shoulder!
Seriously, this is about the worst time in history to be flipping houses,
. the whole thing is going to implode soon.
Somebody is watching out for you.
Continued good luck.
you can use what you've learned when the market gets healthy again- probably in the next 20 years.
Anon -
Actually, I agree with your comment, but would add one clarification: local markets.
In my area, Austin/San Marcos/Round Rock, TX, appreciation rates have not kept pace with the nation as a whole and especially like California, Arizona, Florida, Nevada, and several east coast metropolitans. Also, median home costs are anywhere from 5-10% BELOW most averages across the nation. Add to those two figures the consensus is that the Texas I-35 corridor (Dallas-Waco-Austin-San Antonio) is poised for a huge population/real estate boom in the next 3-5 years, and I have to disagree with your overall statement.
I think as a whole you are correct, but there will be pockets (like my area) that will actually go in the opposite (i.e., upward) direction.
My only fear is that outside investors will buy like mad a'la California, raising home costs sky high, and then leave when they've made their profits. And then the market here will take years to recover (again, a'la places in California).
Okay, good luck Steve. It sounds like you're thinking.
I do worry though that ALL the markets could be affected this time.
So keep your eye on the ball and if you see it softening, quit for a bit.
I'm noticing in some areas that investors are not keeping track of the early signals (ie. increased DOM, price reductions in a formerly hot market, etc.).
My worry is that, RE has been such a mania in this country for the past couple years, and there are so many "empty" properties around (from one investor buying too many and over-building) that at some point people could actually SOUR on RE, as they have in the past on other "investments" gone bad.
If people sour, and I'm predicting they will (you of course may disagree), then there will be a lot of bagholders.
Don't be a bagholder! Get out while the getting's good- whenever that time is for your area.
Best of luck
anon -
Good points. I understand the apprehension in the market as a whole today with increasing market prices and loan types that I am still trying to figure out. I think there will be a definate correction in the market. The $50,000 question is when and how much?
I know Kiyosaki has warned of a general market collapse and urged moving to gold last year (which wasn't a bad idea in retrospect). I just feel MY market is still trying to recover from the dot-com bust, and I'm witnessing some rays of sunshine in the horizon. Median home prices are still well below $200k for my area, and I'm even concentrating further down the chain at homes below $125k.
My worry as well has my anticiapation is on the rental market for this area. As people leave the home ownership market for various reasons and more and more jobs open up in the area, people will need to live somewhere. My theory is that the rental market here will boom, but nothing is ever 100% concrete.
Still, my criteria is pretty strict at the moment (As illustrated by me not getting any deals in almost a year), so while I think things will get brighter in my area, I am still only looking at properties that can turn a sizeable profit ($15k+) for me.
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