Is the area you want to invest in on the way up? What I mean by that are people attempting to fix and repair thier homes or are you looking at a war zone.
Well, I'm still trying to get a feel for things. Most houses in my neighborhood are very nice, about 15 years old, going for around $400K. However, there are some neighborhoods where the houses are older and don't look as nice, although there aren't any major noticeable problems. These houses are just smaller, and older looking. They probably go for $200K - $250K. Is it reasonable to expect I can make improvements and bring up FMV to these older homes if they are still going to be surrounded by homes just as old?
Dave,It sounds like these houses face what is known as functional obsolesence. I wish we had houses in undesireable areas which cost $200,000.00-$250,000.00. Is the area considered a war zone?
The area is no war zone. I'm sure most of the owners are doing OK financially. It's a noticeable difference from my neighborhood, though. What do you mean by functional obsolescence? Do you think there's much I could do to raise the value of these homes?
We are talking about different things. A war zone is when you get out of your car and some gentlemen gives you a gang sign, you do not respond with the correct sign or you give him the finger and he shoots you. That is considered for most purposes, evidence of a hostile zone.
I do not think you should consider such areas unless you have an affinity to those who live there. In which case drive an old car, talk the talk and when you buy a house. Buy with plenty of paper and little cash. Buy that baby at least 40% under the existing market. Do not worry about style, just get the plumbing and electrical to work, the roof to stop leaking. Paint and clean. Blinds on all the windows and motion detectors on the exterior lights. repair the fences and wash and wipe. Put your sign on and be prepared to deal in paper. I would develop a source to buy your take back paper for cash with some discount. This frees your capital for the next one.
Most important see your going price in that particular area and buy underneath as I said above.
This is applicable to all areas except the war zones. They are workable but you have to build up survival skills, unless you look, talk and act like those of the area.
I always enjoyed it but then I like working with problem areas. The rewards are large. Not so much in money, but in the accomplishment of a good thing for the people who live there.
Of course I am 81 drive a 1981VW Diesel pickup truck. I walk with a cane, am fat and ugly and no hair to speak of..
Now this is one Whitey who draws no attention. Eats in the local diner. Speaks either Spanish, SpanEnglish, Street Gulah.and given an area I will be into it and mingling within a few days. I will know the Vigarige Man (Street Money Lender) pick up on the Nickel Bag Runners and Block Captain and all will be cool. I will pick my workers from the street and teach them all a part of a trade.
Are you prepared for that if so my man you are ready to make some really good money and learn another aspect of the modern american city societies.
"Functional obsolescence" basically means that the floor plan and/or style of the home does not have the same types of amenities as newer homes do. For instance, first floor powder rooms and laundry rooms, master bathrooms.
The fact that a home is older does not, of itself, mean that it is undesirable. I also wouldn't necessarily equate "older" with "distressed." To me, distressed means properties that from the outside look as if they've been abused, not taken care of, almost as if they've been abandoned. "Distressed" in this sense would be a red flag to me.
Not everyone can afford to live in a $400K house, so for those in the $200-250K range, the older homes may be just fine.
Hello
Is the area you want to invest in on the way up? What I mean by that are people attempting to fix and repair thier homes or are you looking at a war zone.
ED
Well, I'm still trying to get a feel for things. Most houses in my neighborhood are very nice, about 15 years old, going for around $400K. However, there are some neighborhoods where the houses are older and don't look as nice, although there aren't any major noticeable problems. These houses are just smaller, and older looking. They probably go for $200K - $250K. Is it reasonable to expect I can make improvements and bring up FMV to these older homes if they are still going to be surrounded by homes just as old?
Dave,It sounds like these houses face what is known as functional obsolesence. I wish we had houses in undesireable areas which cost $200,000.00-$250,000.00. Is the area considered a war zone?
The area is no war zone. I'm sure most of the owners are doing OK financially. It's a noticeable difference from my neighborhood, though. What do you mean by functional obsolescence? Do you think there's much I could do to raise the value of these homes?
Dave4 1082
We are talking about different things. A war zone is when you get out of your car and some gentlemen gives you a gang sign, you do not respond with the correct sign or you give him the finger and he shoots you. That is considered for most purposes, evidence of a hostile zone.
I do not think you should consider such areas unless you have an affinity to those who live there. In which case drive an old car, talk the talk and when you buy a house. Buy with plenty of paper and little cash. Buy that baby at least 40% under the existing market. Do not worry about style, just get the plumbing and electrical to work, the roof to stop leaking. Paint and clean. Blinds on all the windows and motion detectors on the exterior lights. repair the fences and wash and wipe. Put your sign on and be prepared to deal in paper. I would develop a source to buy your take back paper for cash with some discount. This frees your capital for the next one.
Most important see your going price in that particular area and buy underneath as I said above.
This is applicable to all areas except the war zones. They are workable but you have to build up survival skills, unless you look, talk and act like those of the area.
I always enjoyed it but then I like working with problem areas. The rewards are large. Not so much in money, but in the accomplishment of a good thing for the people who live there.
Of course I am 81 drive a 1981VW Diesel pickup truck. I walk with a cane, am fat and ugly and no hair to speak of..
Now this is one Whitey who draws no attention. Eats in the local diner. Speaks either Spanish, SpanEnglish, Street Gulah.and given an area I will be into it and mingling within a few days. I will know the Vigarige Man (Street Money Lender) pick up on the Nickel Bag Runners and Block Captain and all will be cool. I will pick my workers from the street and teach them all a part of a trade.
Are you prepared for that if so my man you are ready to make some really good money and learn another aspect of the modern american city societies.
Cheers Lucius
"Functional obsolescence" basically means that the floor plan and/or style of the home does not have the same types of amenities as newer homes do. For instance, first floor powder rooms and laundry rooms, master bathrooms.
The fact that a home is older does not, of itself, mean that it is undesirable. I also wouldn't necessarily equate "older" with "distressed." To me, distressed means properties that from the outside look as if they've been abused, not taken care of, almost as if they've been abandoned. "Distressed" in this sense would be a red flag to me.
Not everyone can afford to live in a $400K house, so for those in the $200-250K range, the older homes may be just fine.