Interestingly enough, I happened to notice a “For Sale By Owner” sign across the street from my primary residence. This is not really news, except for the fact that the median home price in my neighborhood is about 160k and they were asking 250k.
While I am of the school that thinks “getting the price you are asking for a home will happen just because you say so” is over, I went to the open house they were having to see if there was an opportunity of any kind. Call me a real estate nerd if you will, but I like to find deals.
Anyway, the house was an interesting 1.5 story floorplan with some charming, if forgettable, features. I thought there might be some hope when the owner told me there was a guesthouse in the back with separate utilities, but that dream was shattered because they had actually DECONSTRUCTED the home, it was down to the studs and being used for storage when it was not used by her son’s college band, which thought enough of the character of the house to rip out the drywall and throw ninja stars through the fiberglass insulation.
At the end of the tour I was hoping for some type of negotiation lifeboat, but the owner informed me that they had decided they would sell the home for 10k under the appraisal, using the For Sale By Owner Magazine’s appraiser who was confident that the price for the home(250k) was realistic. *Cough*
Now, this pricing model doesn’t really work, fyi.
When I am looking for real estate investment opportunities, I qualify them by three factors:
1) Price of home relative to comparable market value
2) After Repair Value of Home given forced appreciation through renovation OR potential appreciation of home given its potential highest and best use.
3) Income based approach based on number of units or approximate gross monthly rent, vs. current income due to mismanagement.
At DiscountPropertyWarehouse.net, what we have found is that while investment opportunities in Real Estate may be plentiful, the quality of these investments is what comes into question. As such, our prime directive is not just to present opportunities to investors, but fabulous investment opportunities to our clients.
In this way, we feel that investors who put their money with us can have what so many people in this business are lacking: financial peace of mind.
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