New to the LP game!!

[Okie from Muskogee 0]

I have been lurking on this board for quite some time and decided to get my feet wet and post a few questions.

 

I have an area I would like to start doing LP's or CA's in, but I do not know how good the local market is for it. This is a town of about 13,000 people located 35 minutes from a major metro city. I have a good friend who is a realtor and he was crying the blues to me that the job market is not good in this town and the rental market is just terrible. I do not know if that is true or not, but when I drive around I do see A LOT of for rent signs. Now I do not want to get into tenants and toilets, so the LP advantage does appeal to me. I do not see any rent to own or even a "We Buy Houses" bandit sign in this town, so I am thinking the market is wide open and virtually untapped when it comes to creativity. I already own a home in this town that I bought at a tax sale...it is a rough home, but I figured I could get $10,000 on an LP for it with a $1000 down. That would almost clear me out of what I paid for it when I get the down payment. My realtor friend told me he thought it was worth from $3,000 to $4,000. I guess I will find out. This home is a corner lot, with a lot of traffic coming by it on two sides...I figured this little house would work great for bandit signs posted in the front yard as the exposure would be excellent. I see a lot of rough homes that can be bought for under $10,000 here and a woman who found out I was buying houses called me and said she had a three bedroom/ two bath brick home for sale at $30,000. I pulled up the appraisal on it from the county courthouse and the last appraisal the county assessor gave it was in 2003 for a total of $53,000. Sounds like there is money to be had, but like any newbie in this field, I am reluctant to pull the trigger. I guess I am looking for a little direction or a swift kick in the pants to get me going. I would like to start my LP craft in this town first, master my technique and then move my technique to the big metro city (I live halfway between the two, so the commute would be the same). A friend of mine has lease purchased over thirty homes in the last two years in the big metro city, so I know all the LP advantages will work. Myself, I have bought older mobile homes in the past for cash and carried the paper on them and I have done well. I just wish to raise the bar quite a bit in the quality of my tenant buyer, not to mention the payday is bigger with the LP's or CA's. I hate to sound like I am babbling or make you think I am an airhead, but I really want to run with this. I have my cash flow from my mobile homes built up to where I can pursue the LP advantage full time as I am happily unemployed I just need to get started. What is the first thing I should do??

 

Any replies are appreciated.

 

Freddy

"Okie from Muskogee"

[-Tony- 0]

Watch out kim tulsa is not to far away...

 

Freddy,

a woman who found out I was buying houses called me and said she had a three bedroom/ two bath brick home for sale at $30,000

I would hook up with your realtor frend get some good comps tax pages can really be off. Sign it up if it looks good and give yourself plenty of time to market it. I don't know your market or tax assessments I wasn't doing this when I lived in tulsa. If it does work well there you might have found a nitch in the small town market. if it gets slow you could hit cowetta, wagner, you no all the small towns around Broken Arrow. They would probably be a little more marketable closer to the city.

 

I guess I am looking for a little direction or a swift kick in the pants to get me going.

 

Thats the good thing about this with the right contracts you are very limited to your risk.... Get off your computer and do it. You could waste a few bucks and put a rent to own ad in the paper. throw a RTO sign up in front of your tax house see what happens. Sounds your a "Scruggs" student w/ the mobile homes, now step it up and get naked....

[MichaelC 160]

Greetings, lurker. Glad you have decided to welcome the bright light that is The Naked Investor.

I have an area I would like to start doing LP's or CA's in, but I do not know how good the local market is for it.  This is a town of about 13,000 people located 35 minutes from a major metro city. I have a good friend who is a realtor and he was crying the blues to me that the job market is not good in this town and the rental market is just terrible.

No one can answer that question for you, Freddy. Experience will, however. Your experience. That means don't take someone else's experiences as the last word. Your Realtor friend may be well intentioned, but he may be working this business with a wrong and ineffective approach.

I do not know if that is true or not, but when I drive around I do see A LOT of for rent signs.

Lucky you! Most folks on the board are sayin' how difficult their market is because the sellers are calling the shots. If your asssesment of your market is accurate, that buyers market you're in means a lot of motivated sellers who are looking for someone with some answers. That someone should be you. And the fact that there are no other Rent to Own signs or ads around is another reason you need to move on this crazy idea of your's that you want to make money in real estate. No one is apparently filling their needs. Why not you?

Instead of putting up obstacles where there are none, and instead of speculating about what might or might not happen, why not gain some first hand experience by getting into the mix, upclose and personal.

I just need to get started. What is the first thing I should do??

Assuming you have a working knowledge of your preferred approach to investing, which you say is lease purchasing, then you need to start speaking with sellers. This means you call them, and you market so they call you. Let's start with that and then we'll move on from there. Any questions?

[Kimberly 0]

Tony,

 

Watch out kim tulsa is not to far away

Yep, the big metro area that he's talking about!

 

 

 

Freddy,

 

I do not see any rent to own or even a "We Buy Houses" bandit sign in this town

Have you looked in the Muskogee paper for ads from investors? If you don't see bandit signs of any kind, not just the "We Buy Houses," I would tend to guess that Muskogee is really strict about not allowing the signs.

 

I see a lot of rough homes that can be bought for under $10,000 here and a woman who found out I was buying houses called me and said she had a three bedroom/ two bath brick home for sale at $30,000. I pulled up the appraisal on it from the county courthouse and the last appraisal the county assessor gave it was in 2003 for a total of $53,000.

The assessed value and the market value are two different things. Usually, the assessor's value will be much lower than the actual market value. However, it could be that the assessor's value is high. After all, when they do assessments (Tulsa County) it's usually just driving by and not actually looking at the property. A property could be nearly gutted inside and the assessor would never know. Better to ask her how she came up with her asking price AND doing your own analysis as to market value.

 

 

If you are looking at low priced houses, don't be surprised if you get lots of potential tenant/buyers who don't have any option money.

 

Kim