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Saturday, February 16, 2008

Real Estate Investing: Transition Areas

For those interested in making money in real estate investing, now could not be a better time. The market is flooded with foreclosures and people in trouble with their lenders. As I've stated before, buying real estate for the purposes of renting or flipping can yield an enormous ROI if you purchase right.

What is purchasing right?
Purchasing right is about finding a "diamond in the rough," a home that needs enough work to discourage most folks who are shopping for a home, yet can be easily renovated for a few thousand dollars. Every foreclosed or short-sale home that I've purchased needed paint (inside and out), carpet, and new light fixtures. Some needed plumbing repairs or countertops. All properties were neglected; after all, if the owner had money to pay the mortgage, he could keep the house in good repair.

Look for the following in a potential investment house:

  • Good location
  • Highly motivated seller
  • Good potential curb appeal
  • Good "bones" -- structurally sound
  • Nice angles and other architectural features (not a bread box)
  • Slightly elevated (not a down sloping yard)
  • Lots of trees and foliage on street
  • A street with nice, winding curves, NOT a thoroughfare (no double lines in the road)
  • Not on an intersection. Listen for street noise. If you can hear it, so could any future buyers.
  • Always buy at 25 - 30% below comparables in the same area!!!

  • What is a good location?
    Pick an area between new growth and old blight. I tell my realtor to look for a home with the above attributes strategically located between the newly built Starbucks and the first crack house... that is the fringe area where you will get the best deals with the most upside potential!

    Finding "Highly Motivated Sellers"
    To find a person, bank, or other entity who wants to unload a property, the best device to use is the "bandit sign" that you see by the highway. If these signs didn't work, they would not be there. I also use a lead gathering website, , which is equally effective.

    Happy Hunting!

    JM Kelly, The IT Entrepreneur

    Thursday, February 7, 2008

    Hammered at Home Depot, again...

    It's well known by now that The Home Depot SSC (Store Support Center) in Atlanta underwent a "layoff" last week in which 500 employees (or 10% of the workforce at the SSC) lost their jobs.

    This particular layoff affected me on a personal level, as I was working as a contractor at Home Depot until just last week, even though my contract was up anyway before the layoff was announced. I knew two of the people who were let go, both dedicated employees in their specific positions. During my stint at The Depot, I had a great time working there and was part of a fantastic team.

    I know that the problems in the housing market have "nailed" Home Depot pretty hard as they attempt to remain profitable for the shareholders while simultaneously adding headcount to the stores. It is my hopes that the company will weather the storm of the housing market meltdown, and that the former employees can find more work quickly.

    JM Kelly, The IT Entrepreneur

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