OfflineCongrats to Carol!
Jake and I were at our local REIA meeting tonight and one of our newbies had that apprehensive feeling on putting in what people call a low offer, the conversation went something like this," Well I have to say the property would really be worth that price the seller was talking about, I suppose....." and then the newbie dropped off. I told her something that needs to be repeated, "Value is determined at the time of the transaction." If Cashflow is your value, then your offer needs to be setting up that cashflow. If an offer gives you room to fix the place up and sell it for profit, what's your VALUE? Profit!
If someone else wants to buy it and live in it, and use it like an ATM until the bank forecloses on them that's their value seen at the purchase.
Price is a measurement of value.
Value is a measurement of emotion.
my partner and I just had to walk away from a diamond in the ruff. A duplex I had found and invested a lot of "finger crossing" into, but in the end the numbers didn't work. I was bummed out at first, but now realize I was making a common mistake: I had become "emotionally" attached to the property. So also remember to take a step back and view the deal as a business. I recently heard a quote from another successful investor," The deal of a lifetime, comes once every week!"
Everything comes to him who hustles while he waits.
Thomas A. Edison
Be not the slave of your own past. Plunge into the sublime seas, dive deep and swim far, so you shall come back with self-respect, with new power, with an advanced experience that shall explain and overlook the old.
Ralph Waldo Emerson
Value is simply what someone is willing to pay for it. See what works for you, if you can buy a home for the current fmv and what comparable homes are selling for and still cash flow then it is worth it. If you run comps and buy a home selling for less than what other homes on the street are going for and can cash flow then hey, all the better. Just never put yourself in a position where you have to make payments out of pocket. There might be a hom that is way below fmv in a not so great area and has a nice cash flow each month, but you have to remember, is someone else going to want to buy that home down the line? Some won't want to put any money in an undesirable area. Do your research and you'll be fine.
Jeremy
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen