Brand Spanking New Houses
I do not want to be "mr. negativity" but they thought me early in life that if you want to survive in any business you first think of the worst possibilties and cover your ass.
This is a great web-site but perhaps a little too peppy. I am sure there are a great many investors amongs you.
Now to my question. How do you overcome the competition from new construction when trying to sell your rehab or move your "pretty house" ?
Clearly you make money when buying but often your will not be able to steal a house away.....
PRICE,and Location come to mind.
Gregg
[addsig]
can you be a little less specific?
(just kidding)
Lets look at the LV market (or sacto)
many people who are buying want a new house - why because it won't turn to shit at least for 30-40 years).
Vegas and Sacramento are both plywood cities and houses can have black mold and termites - no fun and if someone tells you (like some gurus) that they are easy and cheap to fix. well turn around and run...
So in vegas the builders are putting up brand spanking new houses, your 40 year old rehab will have to be much cheaper and very good location to compete. I am not saying you can't but let's talk about these issues before we all get warm and fuzzy and pat ourselves on the back...
i can't even put my response into words, other than to say "just do it." how well do you really know the sacramento market? at all? i just sold a cinder block 2/1 for $235K. sure, you could get a brand new tract house for that, but not in the Land Park area.
I have lived in sacto for 2 years. (from the Bay Area) - I am exporing and play devils advocate.
Did you rehab the sacto house or flip it?
Andra
You bring up a good point. Mostly it is location. For example any old relic brought up to date in close in areas like Mid Wilshire, They are gone prior to finish. No of course you cannot compete with new housing unless they are really bad tract design, all look alike and all have the same cheapy stuff in them.
I have done a fire damage right in the middle of a new $550,000 tract. But when I got thru it stood out. One of a kind. It sold about $25,000 over the tract houses. But the fire was really heavy and we designed a really acceptional house. Well to tell the truth we were trying to prove a point. The point being if you can really restyle a house you can do a winner. For example we created a side office in the house which could be entered from an extra little door at the side. This for the guy with the home office, but we had a customer in mind when we started. He had a tract house and was complaining that it did not fit his life style. His Herman Miller Furniture, Barcelona Chairs, Ames Chair and stool etc. etc. etc. So we did one pretty much for him. The side office had protruding windows to catch the afternoon sun and to give lots of light into the office area where he spent so much time. Oh I am rambling. It was fun. It stands out like a sore thumb. All these little cookie cutter houses and then bang, a single level sweepy roof. Double entrance doors simple. The garage doors are obscured glass panels. etc. etc.
The prior owner after the fire just wanted out, and got his insurance check and sold us the damaged house. So everybody won. Worst time was with the city Building Inspector. He hates modern arch. But we won him over by putting a little pump on the hot water line circulating system the copper line encased in a foam slip on covering, so you never had to wait for hot water. The radient heating so no cold feet on the floor, little things like that and he mellow'd out. Etc. etc. But I am sure you have experienced all of these things. Nothing is ever totaly smooth. Oh god if it only was. This was one we experimented with put in a double tank hot water system. You know you have a little 30 gal gas hot water tank heater boosting into a 80 gal storage tank. So your gas bill goes way down. I think I am on www.So.Cal.Gas Co. hit list. The new owner was a japanese soaking tub freak so we did a tiled platform for his japanese wooden tub he had sent from Japan, must have cost him over $2,000 for this two seater woodenstaved tub. When you put water in a beautiful smell like a camphor wood is released. Really nice. So listen if you know a nice Japanese girl who is home sick I think I can cure it. There I go wishful thinking at 81 them days are long gone. I'm lucky if I get a pat on the head.
Cognotive Lucius
Oh yes Lucius,
I HATE track houses with no trees and out in the Folsom desert.. yet most Bay Area transplants buy those - why because the excellent school district and attractive address. Oh well if the Folsom Prison was such a great neighbour..
These track homes are down right repulsive to me with no services around and no TREES - in Sacto the summers are not San Francisco summers.
.BUT the BA transplants love them
- as well as the houses in the Hill Country - El Dorado Hills etc, are mostly Bay Area money[ Edited by andrasnm on Date 11/06/2003 ]
In fact the Bay Area exodus is mainly buying in Folsom, Roseville, Hill Country (further up on hwy 50 - towards Tahoe)
...and here in Folsom we have made made equity in a short period of time! We are also seeing many people losing jobs and unable to hold on to these homes. An investors dream. People are still "tranplanting". So, many of these opportunities leave the "win/win/win" WIDE open.