February 27, 2013
Today I went and saw two potential single family houses as potential rental investments. There is a fever pitch these days for houses. One house was just listed this morning, and there was a crowd of about 20 people waiting to see it. We actually had to wait in line 20 minutes just to get inside to see it! Crazy! Shades of 2003 and 2004. The only difference is that the prices now are much lower than then.
I ended up putting in an offer for each house. I was not thrilled with either house (both needed around $10K to $15K renovation work), but the object these days is to get the house off the market so no one else can buy it. I put in slightly lowball offers. One house was a 3 bed, 1 ¾ bath short sale that was listed for $112.000 , and I offered $100,215 . The other was listed as a 4 bedroom, 1.75 bath house, but the 4th bedroom was an illegal room in the garage that would have to be converted back into a garage. It was listed for $119,000, and I offered $109,150.
These day, due to the home buying frenzy and lack of inventory, most houses are receiving multiple bids and are selling for over the asking price. I don’t expect to get either one, but it was worth a shot. Rents for these houses (when fixed up) would be $1,200 o $1,250 a month.
A year ago I was picking up better houses than these, and in better neighborhoods, for around $80,000. Prices have really taken off in the last 6 months or so.
Note: I have always had luck offering odd amounts. Rather than offer $109,000 even, I make it $109,150 or $109,230. Maybe the seller thinks I have some definitive financial reason that makes the house worth what I offer. Who knows? All I know is that I have bought almost all my investment houses with offers that are not round numbers.
Learn the secrets the wealthy use to become wealthy in this FREE eBook. It’s a must for anyone who wants to become financially successful!