Here’s an excellent example where the Location Law was broken. This is a house on the corner…..at a stoplight….. of the main thru-street for the subdivision and the OTHER main thru-street for the subdivision!

I don’t know what came over the dude to try this deal. He was probably suckered into it by his realtor. Realtors who don’t know a neighborhood and sell junk properties to investors bother me almost as much as wholesalers.

They paid about $156,000 for the as-is house (too much). After really doing a pretty nice remodel, they listed the house for $309,000. This was at a time when nothing in the neighborhood had sold for over $290,000. We are currently 365+ days into the deal, and the price is now down to $279,000. Still higher than where it should be listed. On a rehab loan this size, he is probably paying about $1500/month in interest. So over the last year he has paid about $18,000 in interest alone. Had the house been listed at $259,000 or so to begin with, he would probably have already sold it.

This guy came into an open house I was doing over a year ago (when he was working on the house) and bragged to me about how he was getting into ‘investing’ and how that house was a killer deal that was going to make him a bunch of money. Didn’t ask my advice. Knew everything. Pffft.

I feel bad for the dude, but that’s what happens when you (A) think you know what you are doing without ever having done it, and (B) ignore the immutable laws of real estate.

People think they can watch “Flip this House” or “Extreme Makeover Home Edition” and remodel a house. Pffft.

FOLLOWUP TO THIS DEAL:

They couldn’t sell the house & ended up leasing it.

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