Is there money to made in fix er up homes?

Discussion in 'Homeowner Assistance Forum' started by zz4guy, Apr 11, 2007.

  1. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    I am considering picking up a home in need of basic repairs to fix it and then sell it in a year or two. Does this sound like a wise investment? Are there certain types of homes to look for? Basically I'd like to find a couple run down homes and fix up the exterior and interior and then turn $20k or so. Don't want to invest in any major things like foundation repair.

    Is there money in this??
     
  2. xtrim

    xtrim LawnSite Member
    Posts: 28

    Research your property & find a good qualify home inspector. Also make sure the property is way under-valued
     
  3. cahermit

    cahermit LawnSite Member
    Posts: 66

    There is money in it, IF you do it right, especially if you are a handyman and can do most of the repairs yourself. Tile jobs, for instance, go a long way in that situation... One main thing is that you had better make sure that the housing market in ur area is going in a good direction, otherwise, you may buy it for 100k (valued at 180k), thinking ur getting a deal, then put 20k into it (making ur investment 120k + labor & fees), then try to sell it 1-2 years later after the market has plummeted and find that the thing in it's present condition may only appraise for 100k... At which point you would have to either rent it out, or put cash out of pocket to pay the mortgage, not to mention that's what you'll be doing during the remodel anyways.

    So my advice is to look into every tangible aspect and evaluate accordingly.
     
  4. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    Assuming the market is in good condition, how much under a fair market price do you typically want to buy a home for? ie if the home is worth $100k do you want to get at least 20% off ($80k)? Again I am assuming relatively minor repairs. $10k max materials invested in the house.
     
  5. General Landscaping

    General Landscaping LawnSite Senior Member
    Posts: 801

    Make sure the market is good.
    Around here, lots of people are were left sitting on houses when the music stopped.
    They are desperate to unload, rent, burn, anything to get out of the ARM that's knocking their socks off every month.
    There are new neighborhoods (gated) that are headed straight to ghetto because the new owners just needed someone in the house to put a finger in the dike. People that were in condo apartments suddenly found themselves able to rent a new $220K house.
     
  6. MarksTLC

    MarksTLC LawnSite Member
    Posts: 49

    Yes, Lots of money to be made. Also lots can be lost.
    Depends on market conditions. (you can't know what it will be in 2 years.)
    All of my flips have been 3 - 6 months max. Four properties I bought as flips, and had held them for rentals. I've since sold them when the bubble occurred 2-4 years ago (in my area). Start small and work your way up. If I buy anything today, I want to see a 20 - 25% return. That means there isn't alot out there for me right now. Mostly because if the margin is there, someone will already have an agreement of sale on it..
    There are several LLC's and Corp's just buying and selling investment properties. They have the cash to sit on them if needed, or drop $40K to have the thing sold in 2 months. That's not me..... Just my $.02 :drinkup:

    Buying bank owned properties can work, but don't expect to double your money or anything. They usaully list the property within 15 - 20% of what they are going to get for it. - Good Luck!
     
  7. leejp

    leejp LawnSite Member
    Posts: 129

    No offense but the very fact you're asking this question here would indicate that you should stay far away from flipping homes.
     
  8. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    Because??....

    No offense taken but why do you say that? I dont intend on buying and selling a month later to make money off of nothing. I want to put some WORK into them to make them sellable. Most people dont want to move into a home that needs work.
     
  9. cpel2004

    cpel2004 LawnSite Bronze Member
    Posts: 1,415

    Nitelord said it best. It has to do with timing, knowledge etc. If you are a novice partner up with someone and start to read alot of books, keep rading and learning. Its one of those thing, if you do it right its great if you do it wrong(miscalculate) you can be out of gas real quickly. I've done very well, I'm waiting until the market stabilizes
     
  10. dKoester

    dKoester LawnSite Gold Member
    Posts: 3,267

    My dad is a class A contractor here in Virginia. He's getting ready to build a 400 home subdivision in a few months. He started by fixing old houses and doing repairs.
     

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