Pre-Construction out of state

After reading a few detailed posts regarding investments in pre-construction by iggyigette on the RD forums I decided to start poking around. I called 2 builders in the Albuquerque, New Mexico area and I emailed a realtor in El Paso, Texas with builder ties. The first builder in Abq was one that iggyigette had recommended. He told me that they only have a few units left and it turns out that they were in my price range (under $150K). He also told me that they do not sell/lease back the models. The good news is that they will be starting a couple of new communities in January/February, I will watch their website to see if they have anything viable in 4-8 weeks. Ideally, I am looking to put down $1K-3K earnest money and have a build time of 8-12 months. What I would like to do is purely speculative, I would like to sell the new home upon completion and cash out on the appreciation. Alb is currently experiencing ~18% appreciation. iggyigette did warn me that the rental market in Abq is a little bloated and I may have a problem renting the home if I need to take it beyond closing for a while. The second builder in Abq gave me a lot of good information but I waited until the very end of the call to ask if there were investor restrictions. They will not sell to investors and they informed me that the majority of builders in the area have the same policy. I did get some good information and the woman was very nice. I haven't had too much contact with the El Paso realtor but I hope to get a lot of details in the next few days. I am really itching to close a deal... but it has to be well thought out and it must be a good deal with a solid exit strategy for me to pull the trigger.

Rental property in Colorado Springs

Last Thursday (12/1/5) I drove 70 miles to view 5 rental properties in Colorado Springs that looked to be moderately promising. They are in a good rental area, the southeast part of town, and they were 3/2 and 2/3/1 condos in the $100K range. The 3/2 condos were REO properties so I expected there would be at least a little rehab necessary. It turns out that I only got to view 3 of the 5 properties - one of the REOs had the door standing wide open and a basement light on... a little too spooky for my agent and me. one of the 2/3/1 condos just plain cancelled.

The results: the 2/3/1 condos were virtually the exact same layout with some minor price difference but the major difference was that one condo owner felt compelled to do a variety of repairs (wall patching, wall installation, etc.) without the benefit of a professional contractor - it looked like crap. The better of the two 2/3/1 condos is listed at $106K and has an 18 year (stated, not documented) rental history with only 5 months of vacancies. The rate that the last renter paid (the lease ended last week) was $750/mo, again, this is stated, not documented. The only concern was The one 3/2 REO condo that I viewed was in the process of being rehabbed by the bank. If they rehab the kitchen in addition to all of the other areas I think that this will be a moderately good deal. It was listed at $100K with no rental history. The one thing that concerns me about this condo is that the community that it resides in has more of an apartment complex feel (as opposed to the neighborhood feel at the 2/3/1 condo). I am going to get some current mortgage quotes from about 4 different mortgage companies that I am looking at using. I have worked the numbers and it will be hovering around a break even. I will not invest at a loss, I really don't want to afford a loss and this is a bit difficult to avoid while I am doing 100% financing until I can get some cash out deals under my belt. The loans that I am hoping to get are long term (15 or 30 year) fixed but I may have to settle for interest only loans. The loan that I do not want is an adjustable rate - I am already seeing my HELOC on my primary residence go crazy.. I don't need another one of those with the Fed making the adjustments that it is making.