Real Estate and Roads
As a real estate investor, contemplating houses to buy and remodel, or to fix-n-flip, you need to think like the house buyer you hope to sell to eventually. But, you want to do this before you buy an investment property to protect your profits from the fatal sink holes that can literally eat up all of your investment dollars and leave the house you want to sell on the market forever.
Of course, deals come where deals come, and they are not always in the greatest neighborhoods, or at the right time of year, or under ideal conditions.
I was thinking about real estate sales and roads when I found a great tutorial on buying your first home in the online journal Investopedia.com. The tutorial was written by Amy Fontinelle. It offers first-time buyers an interesting mix of things to look at when purchasing a house, they may live in for years.
Ask yourself, who do I think is going to buy this house I am investing in. If you cannot picture anyone, or the bird is so rare you haven’t seen one like it lately, you might want to walk away from the deal.
Picture Your Buyers
When you think about your buyer, do you think of someone who was last seen in a truck that looked like chocolate, mud from roof to wheels, because they like off-road racing? Even if they do like to race on the dirt hills, do they want to travel over them several weeks of every year to get to work?
Do you think your buyer will likely be a young working professional who will want to arrive at work quickly, with a clean car and a clean coat?
Do you think your buyer drives a car with heavy duty tires that can take the wear and tear of a gravel road? Will they be driving a 4-wheel drive with high clearance? Or, will they be driving a small vehicle with two-wheel drive and low clearance.
Mud on the Running Boards
No matter who you are picturing, always consider the quality of the roads or your buyer is likely to be in a conversation like the one I heard this week.
“The boss here,” says a man, nodding his head at his wife who is seated at the same table, “is the one who made me pick a house on the black top.”
“Ah, I wish, I had thought that out,” says their friend shrugging into his coat as he signs his bill that is laid out on the table next to them. “Have you seen all those gravel trucks going by lately.”
“I’ve been replacing a lot of wheels lately,” snickers the local car mechanic leaning out of a nearby booth to join in the conversation while his family snacks on nachos before dinner.
As she swings by with a loaded tray, the waitress adds, “I had to back up and leave my car at home today because I could not make it over a washed-out part of the road. I’m glad I did, or I’d be in your repair shop right now.”
“I had to catch a ride with my neighbor who drives a jeep,” she finishes.
Washboards and Potholes
You may not often find yourself in small towns on the edge of open country, but even in the city, roads are very important and in the Spring the potholes can easily eat axles and wheel rims. Take a good look at the roads yourself and ask yourself, are the ditches and gutters cleaned out, does the water pool on the crown, are there washboards and pot holes that have just been covered with gravel or tar and not cut out. Is the road gravel?
Talk to the neighbors. A good question to ask is “Was the road passable in the Spring?” “In the winter is this hill icy?” “Has anyone you know of ever slid down this driveway into that creek?”
The house buying advisors tell house buyers that they need to pick a neighborhood that is the closest fit to your lifestyle and personality. Their list of things to consider is quite extensive, and it definitely includes the quality of the roads.
Although I just heard about some quirky houses that sold to quirky buyers who thought they were “cool,” I’d say if the house is on 13th street, next to a railroad, a sink hole, and a cemetery, was once owned by a mass murderer, and for sale cheap you want to walk away. Be careful with your money.
Let me know if you have found any deals this month that you cannot walk away from. I hope that I can be of help to you this month.
I can be reached at
Investopedia.com How to Buy Your First Home: A Step-by-Step tutorial. Amy Fontinelle