Anyone have experience with this? Purchasing run down houses, fixing them up and selling for a profit. Is it an easy way to make money, or an easy way to lose your ass?
And TV shows! Of course, on TV they make it look really easy. They have some shows on TLC and A&E if you ever want to watch it.
I have no personel real life experience but i did spend several months looking into it as a prospect The most helpful beginning materials i found were: 1- Buy it, Fix it, Sell it by Myers. 2.www.rehabwiz.com (same guy). basic run down of a good setup: Become great friends with your banker/ or Realitor and they tell you when they get new forclosures and stuff asap, get a forclosure you estimate the cost of your repairs into your initial loan request that way its no "out of your pocket" situation and you figure out the after repaired value (according to an appraiser) and really it cost you nothing or very little to do it (idea is you want it gone within the shortest time possible). so You take the purchased price + repair estimates = the value to you, then add whatever % profit you would like to see. then you take the After repair appraisal minus the number you just got and thats your selling price compare that up to market in the area and see where you sit. Like i said im no expert and that was a very general one case scenerio but i hope that helps in any way, i know alot of guys have been helpful to me so i hope i can do the same for someone else.
Got some thoughts for ya.... Always figure on a "turn & burn" cost.....that means when you go to sell it you'll have to pay a realtor, an escrow, title insurance, etc. It's not like something you can sell used in the paper, so account for 6% loss just to get out of it. If the real estate market is going up, you're pretty much safe...but if it's going down, each day cost money and holding it can be risky! You'd better have some good resources and be handy yourself. I've seen many people buy "fixers" assuming they are getting a bargain. I've gone to homes and with my eye can spot galvanized plumbing that will need complete replacement, roofs that don't have plywood to support a newer asphalt-shingle roof.....what I'm saying is lots of hidden expenses that you may not see. I've been out-bid by ignorant buyers who don't know what they are getting themselves into! Also know that there are a LOT of BIG companies out there that emerged from the old real-estate crash in the early 90's.....these companies have their own workers, they buy foreclosurers for cash in full and their massive efficiency means they can pay more for a home then you and still make a profit...they have everything stream-lined & efficient, they even own their own tractors & equipment. Think of it as the fast-lane on a freeway...everyone moves and continues to move into it till it's no faster then any other lane. In the same manner, buying "fixers" is no longer a hidden & quiet opportunity, too many people and companies are doing it...the big or reasonable profit is not there as much anymore. You'll find more deals in a declining market, but you'll also find more risk. If EVERYONE is doing it, then it's probably not a great deal. Be patient, wait for the right deal...but when you know it's the right deal: stay on it and make it happen. It took me 11 months to buy my first foreclosure. The "short-sale" didn't work, the bank took it to foreclosure and by the time this all happened, from the day we first saw the home to the day we put a lock on the gate and called it "ours"...a bit over 11 months!!! Enough said...
I love those shows "Bob bought this 1300 sq ft. house in covina for 670,000. he plans on putting 30k into this flip." He ended up putting 60k. and put it on the market for $899k Sold it in a week. Before fees he made 169k profit. None of those people lose money. I would love to see the same show where they lose the 169k. There all sitting around saying our life sucks and show their personal house go into foreclosure. Now thats a show, give it a year.
i forsee a new breed of reality tv... no more lifestyles of the rich and famous... how bout lifestyles of the miserable and destitute... or home swap... cardboard box edition.... the possibilities are endless
