Learning Basic Real Estate Investing Strategies From My Mother-In-Law (Part 1)

Jul 5
08:24

2011

Stew Spence

Stew Spence

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Do want to learn some basic real estate investment strategies? Check out some that I learned from my mother-in-law, by reading part one of this story

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My mother-in-law was the best house buyer I ever saw. Her hobby was buying houses. Little did I know she would teach me basic real estate investment strategies would last a lifetime.  Every Saturday for about 40 weeks out of the year,Learning Basic Real Estate Investing Strategies From My Mother-In-Law (Part 1) Articles she would go to For Sale by Owner (FSBO) open houses in two or three nearby neighborhoods. She started doing this when she was first married and continued long after her Air Force husband retired from the military. So, when Uncle Sam moved them every 17 to 30 months, she would start up a new portfolio of houses. Even before they were completely unpacked, she would be out on Saturday looking at the neighborhoods. She knew the neighborhoods better than any realtor you ever met.These were medium family neighborhoods that she had already scoped out, so they didn't have rusting cars jacked up in the front yard or any other similar eyesores. Even when my father-in-law retired and they were living in Orlando, she still went out almost every Saturday. By that time, I was asking her about her FSBO drive-bys, so she said, "Why don't you just go with me so that you can take a look and see what I do?" That next Saturday morning, she picked me up about eight o'clock in the morning and we headed out. She had her newspaper with all the FSBOs circled and she knew where every one of them was located. We walked into the first house about nine o'clock. She spotted the girl who was showing the home and asked her, "What do you want for this house "Key Point - This question allows you to determine if the property is priced realistically—no more than 10% over market value for that neighborhood and for that particular model.When sales were published for the little two or three subdivisions that were her farm area, she read religiously. So, when she asked how much, she already knew the correct answer. If you didn’t, she would turn around without a sound and walk quickly out of the house.This happened at the first house we visited. When the woman answered incorrectly, I was busy looking around before I realized that she wasn’t there anymore. She was in the car before I even got out of the front door.When we got to the next place and she asked her first question, I saw the movement out of the corner of my eye. This time, I was right behind her. It seemed so strange, but she didn’t thank anyone or ask if they would take less—she just turned around and left.When we arrived at the third house, the owner, Mrs. Moore, greeted us. When my mother-in-law asked the now infamous question, Mrs. Moore said $71,000, which was the correct answer. Since it was almost exactly the price that was on the model house for that neighborhood, we knew she wasn’t overpricing the property. You could tell that she was trying to sell it quickly.My mother-in-law didn’t leave the house, which was a good sign, but she gave her a few seconds to breathe before she finally asked, "If I paid you $71,000, how much would I have to pay down to your mortgage so I could just take over your payments?’Key Point - This next question lets you discover what the equity is in the property. This is another basic real estate investment strategy because you want to hear that there’s lots of equity because you would like the seller to have some "monopoly money." At least 40% equity in the property is preferable. In fact, it would be great if nothing were owed on the property, because you wouldn’t have to contend with any loan issues.So, Mrs. Moore had the right answer both times. She said that she still owed $15,000 on the house and that she was one of the first people to buy in the subdivision. My mother- in-law actually smiled.Learning these basic real estate investment strategies will help you accurately assess whether a property is a good deal or not.  Stay tuned for part two of this story in a forthcoming article.Stew Spence invites you to learn to earn high and even INFINITE returns investing in commercial r.e. with a group (on money you used to have sitting in pathetic CD's at 4% or less) when you become a Select Member with America's #1 Real Estate Network today! Join us for an upcoming educational presentation online to get information or to get started now: HIS Real Estate Network