First Home Purchase Advice Needed

[dmnutexas]

Dan and Everyone,

First let me say that this site is unbelievable. I have been through a lot of forums and this is by far the friendliest and most helpful forum.

I am a first-time home buyer and a potential investor. I purchased and read Dan’s book a couple of weeks ago and found the material to be easy reading and insightful for someone like me, one without much real estate investing knowledge.

Dan, in the second chapter, you suggested potential investors starting out by purchasing their own homes to get a feel for the home buying process. However, I am unable to focus on the best type of property to purchase. For example, should I focus on HUD, pre-foreclosed, foreclosed (REO), brand new, or other properties?

To do this right the first time, I was thinking about soliciting assistance from other investors from the Dallas/Ft. Worth area to guide me through the process (start to close) and pay a flat fee for their time.

Even though I have a well paying job, I want to be able to walk away from it at my own volition and pursue other endeavors.

Thanks for your advice,
Dustin

[dealmaker]

Hi there dmnu, and welcome aboard;

Dan is absotively right on that. Always own your residence first. I think the key to finding your own residence is find the HOME first, then worry about WHO is selling it. By that I mean look at all sources, HUD, VA, FSBO and MLS.

I've been doing this for about 28 years and some of the bits of knowledge I've picked up are:

NEW houses always cost more than resales: Builders know that ladies like the smell of fresh paint, picking carpet, tile and the look of new appliances. So I always buy resales.

REOs, HUDs, VAs and other "foreclosures" (actually trust deed sales in TX) are sometimes deals, but seldom steals. Each of these sources have fiduciary responsibllites to other parties and have to justify any sale that is substantially below FMV.

That said I've got a HUD under contract in my area for $21 per square foot, that will when re-habbed bring about $65-$79/foot. However, it doesn't (ddin't) look like what most people think of when they say they want a "fixer upper". It needs a new roof and some of the decking, all new siding, all new heat and A/C system, some floors and a bunch of sheetrock. The thing is all of these are LABOR INTENSIVE so hiring a contractor would bring the repaired cost up to the FMV so no profit could be made if I had to hire the work done. I'll actually pay the A/C guys to do everything on that part, but the rest is on my back. Point is the more work you can do yourself the better.

I don't think FSBOs are generally a great source. The seller wants to pocket the 6% commission, the buyer wants to save it. They can't both win. Besides 99% of the houses for sale are on the MLS, so don't overlook that.

I'm pretty sure there's a couple of REI clubs in the Metroplex so I don't think you'll be left alone. Also no need to pay anyone to help. Keep asking your questions here, there are also other sites you'll stumble onto, and you'll get more answers than you have questions.
Anyway, look at everything


Frank, aka "dealmaker"
Down in Texas, where Bob Wills is still the king!

[Dan Auito]

Well Dustin after what Frank the Dealmaker just said I don't think I have much to add, those are words of wisdom above and I would take them into consideration. If you go to the state specific forum at the bottom of the topics list here it will open up the the individual states forums so you should post up there as well to ensure you have that area covered.

It sounds like your probably close to being pre-approved for a loan so finish that up and know what you are intending to spend on a home, once you have that figure then do as Frank says and start looking at EVERYTHING that you think you might want to live in as your primary residence.

The reason I mentioned posting in the state specific forum is because we have a good number of Texans here and you may be able to hook up with one in your area, so solicit for that person by creatively posting where applicable around here, I'm pretty easy on what can go on the boards here and if you post in the wrong spot I'll just move it for you!

Ask away Dustin, we are here for you! :thumbsup:

P.S. Dustin I also wanted to thank you on behalf of all the family members here for your compliment on the forum being unbelievable, the reason it is so nice is because of the members here that make it that way, I can't take the credit, I too am very grateful for all the wonderful people who take the time to come and play while helping others, welcome to the Family Dustin, your one of us now! :SM128: :SM058:

[dmnutexas]

Frank and Dan,

Thank you for your inputs. My strategy, based on your information, is to first get pre-approved and then start looking for a house from all sources. Once I find the house (~ 3 months), I will surely ask for your opinions/help.

Frank, I was impressed to know that you actually do the work of rehabbing yourself (brain and brawn).

Dustin