Investor Tips and Real Estate
…You Must Have Reserves to Be Good Investor
Fix-n-Flip and/or Rental Homes in Texas!!! Just not the way he describes it!!! Reserves are the key to life.
DFW - Successful Realtor, Tom Brewer with REMAX Associates & Mortgage Specialists ‘proves’ that you can not buy good investment property in the metro area with just $0 money down! That is, if you want to make a nice $10,000 to $40,000 profit on every house you buy! “Oh sure,” says Tom, “you can go out and find some junk houses that nobody else wants – and in ‘bad’ neighborhoods for $0 down and zero fix up costs…but the good houses that I find for my clients are going to require an additional $4,000 to $25,000 to fix them up/remodel them into nice marketable homes – for a nice $10,000 to $40,000 profit.” Please refer back to my home page for information on real estate for sale in all Tarrrant County cities or more loan information.
The fact is - and before you get too excited – is that “everyone & their brother” wants to own real estate now. The stock market is too risky, and there’re a lot of distress sale homes to buy for good profits. But only those investors with 0% down and solid reserves are actually buying these properties!
I can tell you first hand that you need to have your financing all done before you go out and start looking at homes. Carleton Sheets “lied”…you gotta have some money!
And here’s why… there are only about 5-15 homes every week in the entire Tarrant County market that offer “owner carry” financing. Of these, only one or two will offer 100% financing (and they’ll be in “not so nice” neighborhoods and houses that you wouldn’t want to buy - if they gave them to you for free!)
Unfortunately, these owners aren’t desperate – so you’re not getting a very good deal on their house to begin with! Trust me here - forget about buying homes with “creative financing” – as the only thing you’re going to buy is someone else’s financial mistake! There is no such thing as $0 money down and no reseves for repair on good investment property in the Indianapolis metro area (or I’d be doing it for myself!). Carleton Sheets and all his infomercial buddies made all their money doing $0 down & cash back at closing - in Florida! Texas is not Florida!!! These are the facts – and I’m a ‘straight shooter’…I’d love to sell you 10 houses for $0 down next week – but it’s not going to happen…
.
The reality of the matter is that the best and “hottest” buys in town (the pre-foreclosures and ‘desperate’ sellers homes) are going to require regular ordinary financing…not infomercial “smoke & mirrors” financing!!! This is because these desperate home sellers are “under the gun” to sell their houses fast - before the bank forecloses or they have to declare bankruptcy. Desperate sellers cannot sell for anything but cash or a new loan from a new buyer! They can’t do owner carry financing, because they need to “unload” their house as fast as possible (or, if the banks already own them – banks only accept “cash” or a “new loan” to buy them.) These are the kinds of homes I buy and sell to my clients…and you’ve got to have regular financing to buy them.
Now, if your goal is to make a nice profit in real estate investing, then you’ve got to “buy” homes like the very successful investors do. If not, you’re just a “want to be investor” – or an investor who’s about to become a ‘broke’ investor!
Here are my ‘personal rules’ and ‘recommendations’ to buying investment homes, as a guideline to help you understand buying homes in the Indianapolis marketplace for a nice profit:
a) Don’t begin looking at houses until someone “smart” and “experienced” tells you all about financing non-owner occupied homes
You can borrow money (with a 2nd mortgage/home equity line of credit) from your current homes’ equity to buy an investment home, but don’t do that until you talk to a very good Realtor/lender first – as you might need more money in reserves for repair and acquisition.
c) You’re (usually) going to have to be able to do some “serious” remodeling & updating on any house you buy, so plan on having to doing these: removing some old wallpaper & painting the whole interior, paying to have new carpet put in, most houses need new kitchen cabinets & counter tops updated (to maximize your profit & to help you sell the houses faster), laying new linoleum/tile floors in the kitchen & bathrooms, putting in new sinks, vanities, faucets and white toilets (vs. old colored ones) in 2-3 bathrooms, and about a “dozen” other smaller things to make the house look nice enough to re-sell it for a good profit. This fix-up/remodeling should cost you about $4,000-$15,000 in real expenses at Home Depot, Lowe’s and the carpet store – excluding the ‘cost’ of labor to actually complete it.
The ‘smartest’ investors in the world always have enough cash & financing available – as you never want to get yourself into a bad financial ‘situation’. If you like “high-risk” real estate investing, then you probably want to find another Realtor to help you, as most of my clients like to sleep well at night! So do I.
I do lots of creative financing for myself and my clients – but if you want to become a truly successful real estate investor, then you need to do it smart…and that’s why my clients hire me to help them get financing done first – and then I find them great distress sale home bargains! Don’t waste your time “looking” for ‘red-hot’ home deals – when you can’t buy them anyway...
In my opinion, the hardest thing to do in real estate investing, quite honestly, is to get financing…as that’s the #1 “road block” to buying highly profitable investment properties! Trust me – I’ve tried – and I am an agent with a real estate company and I own the mortgage company!
Now, once you have your financing, we can actually go out and find some fantastic deals on homes – as I locate them all the time! I’ve bought 3 homes myself in the last couple of months – and will make about a $15,000-$40,000 net profit on each one of them. I “specialize” in finding these distress sale deals, so be very careful when you start working with a Realtor to make sure they understand everything involved in locating & financing these homes.
I’ll show you how to figure out how much “remodeling & updating” you need to do on all the properties we look at, so you’ll maximize your profits – and help you sell the homes the fastest (if you want to do fix-and-flips.) If you’re looking for rental homes, I’ll show you how to find them & update them so you can get more money for rent – and I’ll help show you how to find the best ‘tenants’ for your rentals – as this is what “scares” so many people on doing rentals (I have 2 rentals currently.)
If you work with me on financing and buying distress homes, then you’ll see that buying & selling real estate is a lot of fun…and not very stressful. Call me at 817-690-9296 – and we’ll talk about your specific situation!
Tom 817-690-9296