Buying foreclosure real estate can be a real hassle. Just viewing the properties can be dirty and a health risk and getting the right combo codes to the key boxes is sometimes comical. Then there are the offers. Some require supplemental bank documents before they’ll look at your offer and others won’t.
I sell about 30-40 foreclosure properties each and every year to clients looking to make money investing in real estate here in Kansas City. Money is there to be made. No doubt about it. But make no mistake, there are tons of papers to sign and the bank addendums are only written to the favor of the seller. If you don’t like it, tough. You can walk away. You can bitch and moan. But there is not much else you can do…besides sign and close.
Right now, to make money in real estate investing in Kansas City you have to have two minds simultaneously.
- You must buy rental property that will rent, stay rented and provide healthy cash flow.
- You must buy property with “havestable equity.”
Do you believe you can be “all in” on rental property that rents for about twice your investment? (So to speak.) I mean you can buy a house for $25,000 and then invest another $15,000 in repairs/updates and then rent for somewhere between $795 and $850. And yes, vacancies are at or below 6%.
True enough these aren’t “A” neighborhoods, or even “B.” But they are safe neighborhoods.
These homes are challenging and competitive to find. But they exist.
All day long I can find you single family homes that you can be “all in” for about $60,000 – $65,000 and rents would still be about $795 to $850.
My term. Don’t google it. 🙂
Basically what I’m saying here is that your “all in” price is somewhere 15% or more south of the ARV. In other words, you have value sitting there waiting to be harvested when you sell the house when the market improves. Is that a year from now? Two? Ten? I don’t know either. But the harvestable equity I speak of is based on today’s comps. I’ll show them to you when we are negotiating and you make your own judgements.
I Charge Extra
So there are no surprises you need to understand I have commission surcharges. Every once in a while someone moans and groans that I add on a fee of $375.00 for each closing to whatever commission I earn. Really? I’m using my years of expertise to identify properties that will make you ~$300/mo cash flow and ~$25,000 to $50,000 in extra equity and you want to argue with me for making money?
It’s the only way I can make a decent living with houses that are selling for less than $90,000. Just so we know, that’s the fee if we work together.