Real Estate people: I want to buy a house, advice?

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he says the best deals he's seen in the biz are on a small place w/ extra land and high vacancy rate, build extra units and lower vacancy rate and sell. timeline would be 1-2 years. any thoughts or experience w/ this?

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I was reading over this again and I realized that I left out something in my earlier response. The only issue that I can see with this strategy is the 1 to 2 year timeline. Most serious investors that I know like to see at least 3 to 5 years of operating information before they commit to buying. Banks also like to see at least 3 to 5 years. Thats not a hard and fast rule, but generally its the case.

Also, commercial properties generally sit on the market for some time before getting purchased. Obviously that depends on the cap rate that you're offering, the property, your market, etc. But they don't normally sell quickly unless you're offering a significant discount. So say you buy 20 units cheap, build 20 more units, and get within striking distance of a resonable vacancy rate. That property could sit for sale for 9 or 12 months under NORMAL conditions. If banks are being stingy, it'll take longer. If your friend is a commercial broker, he'll know better than me how long it'll take to sell the property.

In any case, 1 to 2 years to buy a property, renovate, build additional units, get them filled, and get the property sold is highly optimistic IMO. Hell, 2 years is optimistic, 1 year is downright impossible. I mean, you'll be working with city governments, neighborhood associations, requesting zoning changes possibly, etc. I'd guess that 3 years for this project would be a safe minimum depending on what kind of units you're building and your exit strategy.