Received an email from brand new, young out of town investor fresh out of a seminar in California wanting to purchase his first rental property. He was convinced he could purchase a home for 30K, put 10K into it, refinance and pull out 10-20K equity to buy more all while creating a 15% R.O.I. He wasn’t accounting for all the cost and unforeseen issues that come with a property like that. I went to work viewing all the properties he sent me, drove neighborhoods, took pictures, prepared CMA’s and gave him my honest opinion. I was brutally honest with him about the properties he was pursuing, after 3 months I expected him to move on and find another agent that would sell him a card board box just to make a buck. However; After several months I was able to move him towards a minimum value of 50K, in better neighborhoods with better tenants. The R.O.I wasn’t 15% but the R.O.I was solid and long term, We just closed our first 2 properties and now working on the next 2. Eventually he told me my honesty gave him confidence in his purchase.
I’d rather lose an investor then facilitate a bad investment just to make a commission.
2 house package- both 3/1 average of 1300Sq. Feet.
|Monthly rental income||$1250|
Published in Case Studies.