My Real Estate Investment - Part 3 of 3

There are several ways to make your first real estate investment. Many are not worth discussing, so I will focus on my favorite. This is not how I purchased my building, but it is most likely how I will purchase my next one. The best part is, it requires very little money.

There are many real estate websites. Most want to sell you property. After all, how could they make money if they didn't sell it to you? Fortunately, with a little searching, you can find something different. Some home owners may find their houses either condemned, or they may find themselves in a case of eminent domain. Right now in Nebraska, it has been proposed that a river be dammed and turned into a lake. It just so happens that almost an entire city will be flooded in the process, and that this is an affluent city located between Nebraska's two largest cities. This is a perfect opportunity. The homes will be demolished, and the homeowners will move. Because they have money to move, they will simply purchase a new house elsewhere. That is where you come in.

Imagine that you are one of these homeowners. You own a $500,000 house that has nothing wrong with it. You have been told that your land will soon be underwater. You plan on moving, but it is still such a waste of a great house. Someone comes up to you and offers you $20,000. Now, granted, the house is worth many times that, but you can't use it any longer. So of course you sell, and you wonder what is going through their mind.

What they are thinking is that they will hire a housemover. The companies that handle this come out, turn off all the utilities, cut the lines, and work out a route map to your new lot. Then, they place the house on top of its new foundation, and they reattach everything.

You will have paid $20,000 for the house, $20,000 for the new lot, and $30,000 for the foundation. You have paid $70,000 for a home that is worth $500,000. Not a bad deal at all, even if it is a bit of a hassle. But it gets better.

Often, there is no need to spend $20,000. If you do your homework, you can find houses for $1, or even completely free. The caveat is that you must remove your house from their property, and after you move it, you will be doing some serious repair work on top of the moving fees. Depending on where you move it, you can significantly save money. I live in a tiny town, right on the edge of farmland. I recently saw a house advertised in our local paper. It cost $1. There are lots in my town that sell for $5000. It would still cost $30,000 for the foundation, but then I've spent $35,000 for a house when they usually sell for twice that. Then, I can do the work at my leisure.

The trick is to wait for just the right deal. If you cannot pay back the money, it will never be a good deal, because you will have a foreclosure on your record. And just because it is a good deal doesn't mean that it is a good deal at the time. The same building that I purchased would have been a bad idea 3 years ago for us. Now, it is working out well. Furthermore, you need a good list of contacts. I have a handyman that I work with consistently, and he is very quick and makes me feel like I am a high priority. I have a guy that does carpet at less than half the rate of anyone else. If I purchased in a different city, I'd need a whole new list of contacts. And even more than that, you have to be very handy yourself. You need to be able to walk into a building and know its flaws before you purchase it. Yes, my building needed a few walls constructed and needed a new water heater. Fortunately, I have experience with putting up walls and replacing water heaters. Even the trash in my building was not a concern, because I am able to throw it away. Yes, it has been a lot of work, but I am also being rewarded for my hard work. The previous tenant left behind a commercial fryer and dishwasher, both of which I can sell on ebay and get more than what the dumpster cost me.

But that one time in a million, your perfect building will come along. When it does, do not hesitate. If you have done what you needed to ahead of time, you should make an offer immediately. My building had no less than 5 people who contacted us after we put "for rent" signs up, wanting us to know that they were planning on offering on it, but we bought it first. My heartless response? "Well, the rental price is $600 a month. Are you interesting in scheduling a viewing?"