So you don't know anything about rehab? No problem. You don't even know anything about painting? No problem. Anyone can do a deal like this. I found a home on the MLS 2 months ago. It was advertised for $46,000. Just 15 months earlier it sold for $62,000. It was a foreclosure and the people who lived there cleaned everything up when they left. It needed zero rehab. Carpet and paint were all good to go. All of the majors had been replaced. I made an offer for $38,000 which the bank promptly turned down. We finally settled on $42,000. It had been on the market only about a week. I immediately started looking for renters as soon as I locked up the deal. I ended up closing at 8:00am on a Friday morning and my new tenants moved in at 10:00am the same moring. Here are the numbers.
Mortgage= $311 per month
Taxes and Ins.= $120 per month
Management=$40 per month
Total expenses=$471 per month
Monthly Rent= $575 per month
Tenant pays all utilities
Monthly cashflow= $104 per month
Not bad for an estimated 1.5 hours work. Comparables are selling for $55,000 to $65,000 right now just 2 months later. I have bought the majority of my homes in January because in the midwest it gets really cold and the real estate market shuts off in December and January. By the way, in my area the real estate market was actually up in 2007.
This type of deal won't make you rich by itself but, anyone could have done it. Maybe in a year when their lease is up I will sell it. By then it will eligible for a 1031 exchange. Or maybe I will keep it forever.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!