Lots of rehabs, not an excellent neighborhood, tons of ugly boarded up properties for sale that obviously need work. Should I stay away? Is $$$ to be made here?
A little vague in your question but if the property is not desireable when you are finished then no. Selling the nicest house on the street is not the way to make money.
If you are going to fix up several properties and get others on board then on a large scale there may be money to be made but that is a big undertaking.
Someone once told me that you could recognize the Pilgrims because, "they were the one's with the arrows in their backs"
Granted, there are big bucks to be made in these areas. Believe me, you will earn every penny.. Nothing but problems. A seasoned investor -can if she wants to- handle this situation . A newbie should go for an easier way to make money.
Ahh...but I don't want to do the rehabs...I'm thinking of turning them over for marginal profits to these seasoned investors...if I can find them that is!
Scarlet, You certainly need to have the investors "in your pocket" before you attend an auction. Unless, you goto the auction with intention of just watching and learning. Auctions require money down and balance in cash within days.
I've just finished reading a book entitled Find it, Buy it, Fix it. In that book he had stated that he wouldn't purchase a property in a neighborhood that he couldn't walk through during the evening.
Now, I have one property in a neighborhood like you've described and I make a great profit out of it; I only go there during the day.
Bottom line? Neighborhoods like that are, in my opinion, gold mines, provided that you have a management company who deals with such properties in those areas. Most management companies of that type charge between 6 and 10%.
It's really going to come down to your vision, goals and comfort level.
Start building your buyer's list of REAL rehabbers, not wholesalers who say they can do rehabs. The latter are blowing smoke, here are some questions I used to build my buyer's list.
* What areas are you looking for properties to invest in?
* What types of properties are you looking for?
1-4 unit residential? Commercial? land/acreage?
What types of repairs are you comfy doing? Minor cosmetics, or do you have crew that will do rehabs?
How much money do you want to make on each deal? Is it a flat fee minimum, or a percentage of ARV (after repair value)?
How quickly can you close on the properties we bring you?
(you want to hear 7-10 days, which means they have cash or cash investors lined up)
Have you ever had deals assigned or optioned to you?
Do you typically sell FSBO or list with an agent?
Will you rehab condemned or fire damaged properties?
Would you be interested in tear downs where the lots are good to excellent?
How many rehabs have you done, and how many are you looking to do in 2004?
How many different crews do you have working for you?
HOpe this helps. YOu need to weed out the real rehabbers from the talkers, and after getting answers to these questions, you'll be able to tell quickly.
I figured people may want to stay away- hence less competition! I wouldn't walk there at night...of course I don't walk anywhere at night by myself being a female and all...I think I could get some excellent property deals since there are so many...I need to know if these are good deals though that an investor would consider...believe you me...I don't want to be caught with my pants around my ankles...lol They are up for auction: www.collarcityauctions.com
any ideas? Wish I had some rehabbers/investors in my pocket that were interested in uglies...I only have the bread n' butter sort now
i hope every one is good, well i iam trying to buy them ugly rehab, i have the money to fix then up, but do no how i can get started on getting them, were can i purchase them ugly rehap, thank you have a great day
Look at your county website- look for foreclosure links or auction links...if there is nothing there then email them with your question. They usually get back to you pretty fast. Also, often the ugly properties may have a sign on them (up for auction) with phone # or website addy..good luck!
These properties mostly aren't worth more than 50K...for sale at auction for probably a minimal amount, wonder how much they would cost to fix up???? Wish I knew more or knew someone who did!
The best way to find out quick is to take a contractor with you. Then you'll get a ball park figure. Another way is to buy that book I mentioned above. That'll help you out quite a bit.
Sammy - the saying is you can recognize the 'pioneers' because they have all the arrows in their backs. The saying is a lesson about how it can be bad to be the first to do something, not a lesson about Thanksgiving.
I just couldn't resist, that is the first time in hundreds of your usually excellent and informative postings that I have seen you blow it.
Scarlett - don't discount the problems you are going to be facing, as Sammy was implying if these houses are located in the war zone you will be facing a lot of unusual circustances that you would never have to consider in a more average neighborhood. You have to take them into consideration in your aquisition costs, your holding costs, and your exit costs.
You are going to be faced with security issues as well as vandalism issues both during the remodel and most importantly during the selling time. There is a reason that windows are boarded up all over the place.
You are going to be facing longer holding times to get rid of these properties. If nobody wants to live there now, having a few nice remodelled houses isn't going to change anything. Buyers are going to be reluctant to even get out of the car to look inside the house.
You thinking that this is irrelevant since you are just going to flip them. Believe me you are going to have an even harder time flipping these houses to savvy rehabber investors. This neighborhood and the houses in it aren't a secret that only you know about. The experienced rehabbers know all about them already and are avoiding them for a reason. They are going to need to buy the houses at the lowest possible prices for all the reasons stated above and last thing they want is a middleman in the middle of a deal in this neighborhood causing them to have to pay 3-5K more for the property.
I think you will find a lot of them passing and just finding a deal in that neighborhood themselves. With the conditions you describe it doesn't sound like it would be too hard for them to just go around you if they were interested in them in the first place.
Scarlett:
If this area is a complete warzone, then
look elsewhere. If you can pull up there at night and get out of your car without getting assaulted then you might be on to something. I have done quite well in areas like you are mentioning.
Talk to some local realtors, check out the comps, talk to people who live in the area, see what the demand is?
If this pans out, then why dont tie one up and try to wholesale it. You could even run an ad now: "3 bedroom, 2 bath fixer-
upper". When your phone blows up, pre-
screen the buyers and see if any of them
are interested in that area.
Remember, the rich invent money! Give it a shot.
Best Riches,
Jeffrey Adam
Best Riches,
Jeffrey Adam
[ Edited by JeffreyAdam on Date 01/22/2004 ][ Edited by JeffreyAdam on Date 01/22/2004 ]
I appreciate your feedback on the City of Troy properties being auctioned Thursday, February 12, 2004 at 7:00 PM at Troy City Hall.
What is your opinion of Ugly? The properties being auctioned may not be the mansion on the lake, but the properties have potential for rehab and there is no need to be intimidated not to attend and bid on the 12th. We conducted open houses this past weekend and an average of 40-50 interested people inspected EACH PROPERTY. The Council Chambers will be filled with hundreds of qualified investors and home buyers that believe in the City of TROY.
Additionally, thank you for posting the link to our website. That is a tremendous help for us promoting the auction. We are available to help anyone who is interested in buying and investing in properties we auction.
We have many other properties available in Amsterdam, NY and The City of Schenectady, NY as well a the Ramada LTD. 88-Room Hotel Just Off Exit 21 of the Adirondack Northway in Lake George, NY.
Please let us know if we can assist you or anyone else now or in the future buying and selling foreclosed property. ****Must Reach Freshman Investor status before posting URL's*** or **Please See My Profile**
I truly fear for you. And the reason is I cant understand some of the advice that I am reading.
First let me say that I hate it when people tell me "if that could be done, everybody would do it".
I cant tell you how many times I have made money after some naysaying fool told me that.
And I recently found a boarded up gem and sold it very well.
But. But. BUT. You are saying that the WHOLE NEIGHBORHOOD is boarded up.
What seasoned investor in your area doesnt already know about this neighborhood?
And if they didnt really and came to look at your property and saw all the others boarded up. What is to prevent them from trying to get their own sweet deal rather than pay you to flip them one.
And "bring a contractor"?????!!!!!!!!!!
Fine, bring him, ask him a million questions. And learn.
But if he is gung ho to do the work, there might be a reason. Let's see if we can figure out what it might be. Hmmmm.......
HOw about $20K risk free dollars that you are gonna pay him to renovate a house that you might not be able to sell.
And if these are all steal deals. He will want to buy one for himself.
Here is the way I see it.
You'd better be selling the LAST boarded up house on a block that is quickly improving.
You could buy it. Let a contractor do the work but only if you can pay him upon the SALE of the house. Hard to negotiate? Sure, so offer him half the profit.
At least you wont be a huge amount of money out of your pocket!
And if he doesnt feel comfortable taking half the profit on sale, then maybe that tells you what HE thinks the property is worth.
I dont recommend you buy a house and fix it and try to sell it, if the houses next door and across the street are all boarded up.
The alternative is to buy a bunch of houses all at once. Renovate them and lift the value of the whole neighborhood by yourself.
I agree with just about everything you said with the exception of the part about the contractor not wanting to take half the profit because he knows the property isn't worth it.
Most contractors, I would have to venture maybe 99.9% of them know less about realestate and realestate values then any newbie here. They know how to fix things, if they were as good at pricing properties they would be real estate investors that do rehab.
Any contractor that jumps in bed with you based on taking half the profit after the sale has way more at risk then you do. He has no clue what a good price for the home would be, he would be going into it blind, with all of his trust in the investor knowing what he was doing.
A little vague in your question but if the property is not desireable when you are finished then no. Selling the nicest house on the street is not the way to make money.
If you are going to fix up several properties and get others on board then on a large scale there may be money to be made but that is a big undertaking.
Someone once told me that you could recognize the Pilgrims because, "they were the one's with the arrows in their backs"
Granted, there are big bucks to be made in these areas. Believe me, you will earn every penny.. Nothing but problems. A seasoned investor -can if she wants to- handle this situation . A newbie should go for an easier way to make money.
Ahh...but I don't want to do the rehabs...I'm thinking of turning them over for marginal profits to these seasoned investors...if I can find them that is!
Scarlet, You certainly need to have the investors "in your pocket" before you attend an auction. Unless, you goto the auction with intention of just watching and learning. Auctions require money down and balance in cash within days.
Hello, and great question!
I've just finished reading a book entitled Find it, Buy it, Fix it. In that book he had stated that he wouldn't purchase a property in a neighborhood that he couldn't walk through during the evening.
Now, I have one property in a neighborhood like you've described and I make a great profit out of it; I only go there during the day.
Bottom line? Neighborhoods like that are, in my opinion, gold mines, provided that you have a management company who deals with such properties in those areas. Most management companies of that type charge between 6 and 10%.
It's really going to come down to your vision, goals and comfort level.
What would I do? I'd buy the entire block.
Thanks,
OnTheWater
Start building your buyer's list of REAL rehabbers, not wholesalers who say they can do rehabs. The latter are blowing smoke, here are some questions I used to build my buyer's list.
* What areas are you looking for properties to invest in?
* What types of properties are you looking for?
1-4 unit residential? Commercial? land/acreage?
What types of repairs are you comfy doing? Minor cosmetics, or do you have crew that will do rehabs?
How much money do you want to make on each deal? Is it a flat fee minimum, or a percentage of ARV (after repair value)?
How quickly can you close on the properties we bring you?
(you want to hear 7-10 days, which means they have cash or cash investors lined up)
Have you ever had deals assigned or optioned to you?
Do you typically sell FSBO or list with an agent?
Will you rehab condemned or fire damaged properties?
Would you be interested in tear downs where the lots are good to excellent?
How many rehabs have you done, and how many are you looking to do in 2004?
How many different crews do you have working for you?
HOpe this helps. YOu need to weed out the real rehabbers from the talkers, and after getting answers to these questions, you'll be able to tell quickly.
Best, Dave
I figured people may want to stay away- hence less competition! I wouldn't walk there at night...of course I don't walk anywhere at night by myself being a female and all...I think I could get some excellent property deals since there are so many...I need to know if these are good deals though that an investor would consider...believe you me...I don't want to be caught with my pants around my ankles...lol They are up for auction: www.collarcityauctions.com
any ideas? Wish I had some rehabbers/investors in my pocket that were interested in uglies...I only have the bread n' butter sort now
i hope every one is good, well i iam trying to buy them ugly rehab, i have the money to fix then up, but do no how i can get started on getting them, were can i purchase them ugly rehap, thank you have a great day
Look at your county website- look for foreclosure links or auction links...if there is nothing there then email them with your question. They usually get back to you pretty fast. Also, often the ugly properties may have a sign on them (up for auction) with phone # or website addy..good luck!
Incidentally- how much would a rehabber have to make in order for them to consider a property usually?
If we hire out all the work, we like to make at least 20k/prop.
Wow, blowing smoke... If that's what I've been doing, then it must be working!
Thanks,
OnTheWater
These properties mostly aren't worth more than 50K...for sale at auction for probably a minimal amount, wonder how much they would cost to fix up???? Wish I knew more or knew someone who did!
The best way to find out quick is to take a contractor with you. Then you'll get a ball park figure. Another way is to buy that book I mentioned above. That'll help you out quite a bit.
Thanks,
OTW
Sammy - the saying is you can recognize the 'pioneers' because they have all the arrows in their backs. The saying is a lesson about how it can be bad to be the first to do something, not a lesson about Thanksgiving.
I just couldn't resist, that is the first time in hundreds of your usually excellent and informative postings that I have seen you blow it.
Scarlett - don't discount the problems you are going to be facing, as Sammy was implying if these houses are located in the war zone you will be facing a lot of unusual circustances that you would never have to consider in a more average neighborhood. You have to take them into consideration in your aquisition costs, your holding costs, and your exit costs.
You are going to be faced with security issues as well as vandalism issues both during the remodel and most importantly during the selling time. There is a reason that windows are boarded up all over the place.
You are going to be facing longer holding times to get rid of these properties. If nobody wants to live there now, having a few nice remodelled houses isn't going to change anything. Buyers are going to be reluctant to even get out of the car to look inside the house.
You thinking that this is irrelevant since you are just going to flip them. Believe me you are going to have an even harder time flipping these houses to savvy rehabber investors. This neighborhood and the houses in it aren't a secret that only you know about. The experienced rehabbers know all about them already and are avoiding them for a reason. They are going to need to buy the houses at the lowest possible prices for all the reasons stated above and last thing they want is a middleman in the middle of a deal in this neighborhood causing them to have to pay 3-5K more for the property.
I think you will find a lot of them passing and just finding a deal in that neighborhood themselves. With the conditions you describe it doesn't sound like it would be too hard for them to just go around you if they were interested in them in the first place.
Just my thoughts.
Scarlett:
If this area is a complete warzone, then
look elsewhere. If you can pull up there at night and get out of your car without getting assaulted then you might be on to something. I have done quite well in areas like you are mentioning.
Talk to some local realtors, check out the comps, talk to people who live in the area, see what the demand is?
If this pans out, then why dont tie one up and try to wholesale it. You could even run an ad now: "3 bedroom, 2 bath fixer-
upper". When your phone blows up, pre-
screen the buyers and see if any of them
are interested in that area.
Remember, the rich invent money! Give it a shot.
Best Riches,
Jeffrey Adam
Best Riches,
Jeffrey Adam
[ Edited by JeffreyAdam on Date 01/22/2004 ][ Edited by JeffreyAdam on Date 01/22/2004 ]
Scarlett:
I appreciate your feedback on the City of Troy properties being auctioned Thursday, February 12, 2004 at 7:00 PM at Troy City Hall.
What is your opinion of Ugly? The properties being auctioned may not be the mansion on the lake, but the properties have potential for rehab and there is no need to be intimidated not to attend and bid on the 12th. We conducted open houses this past weekend and an average of 40-50 interested people inspected EACH PROPERTY. The Council Chambers will be filled with hundreds of qualified investors and home buyers that believe in the City of TROY.
Additionally, thank you for posting the link to our website. That is a tremendous help for us promoting the auction. We are available to help anyone who is interested in buying and investing in properties we auction.
We have many other properties available in Amsterdam, NY and The City of Schenectady, NY as well a the Ramada LTD. 88-Room Hotel Just Off Exit 21 of the Adirondack Northway in Lake George, NY.
Please let us know if we can assist you or anyone else now or in the future buying and selling foreclosed property. ****Must Reach Freshman Investor status before posting URL's*** or **Please See My Profile**
Thanks again,
Randy Passonno, President
Scarlett,
I truly fear for you. And the reason is I cant understand some of the advice that I am reading.
First let me say that I hate it when people tell me "if that could be done, everybody would do it".
I cant tell you how many times I have made money after some naysaying fool told me that.
And I recently found a boarded up gem and sold it very well.
But. But. BUT. You are saying that the WHOLE NEIGHBORHOOD is boarded up.
What seasoned investor in your area doesnt already know about this neighborhood?
And if they didnt really and came to look at your property and saw all the others boarded up. What is to prevent them from trying to get their own sweet deal rather than pay you to flip them one.
And "bring a contractor"?????!!!!!!!!!!
Fine, bring him, ask him a million questions. And learn.
But if he is gung ho to do the work, there might be a reason. Let's see if we can figure out what it might be. Hmmmm.......
HOw about $20K risk free dollars that you are gonna pay him to renovate a house that you might not be able to sell.
And if these are all steal deals. He will want to buy one for himself.
Here is the way I see it.
You'd better be selling the LAST boarded up house on a block that is quickly improving.
You could buy it. Let a contractor do the work but only if you can pay him upon the SALE of the house. Hard to negotiate? Sure, so offer him half the profit.
At least you wont be a huge amount of money out of your pocket!
And if he doesnt feel comfortable taking half the profit on sale, then maybe that tells you what HE thinks the property is worth.
I dont recommend you buy a house and fix it and try to sell it, if the houses next door and across the street are all boarded up.
The alternative is to buy a bunch of houses all at once. Renovate them and lift the value of the whole neighborhood by yourself.
Got that kinda cash?
Just my humble opinion.
gl
N.
Neil,
I agree with just about everything you said with the exception of the part about the contractor not wanting to take half the profit because he knows the property isn't worth it.
Most contractors, I would have to venture maybe 99.9% of them know less about realestate and realestate values then any newbie here. They know how to fix things, if they were as good at pricing properties they would be real estate investors that do rehab.
Any contractor that jumps in bed with you based on taking half the profit after the sale has way more at risk then you do. He has no clue what a good price for the home would be, he would be going into it blind, with all of his trust in the investor knowing what he was doing.
Rehabbinator,
You are right.
I did a mental snapshot of the greatest hits of all the handymen and contractors I have interviewed. Not only the ones I have hired.
They dont know about Real Estate. They can build a house so you would think they would take the next step, and some definitely do.
But those that do, generally rehab their own props and dont do as much contract work.
I only have pitched this idea to the ones that seem more savvy. And the ones that said the "money isn't in the property" were actually wrong.
Nevertheless I used those comments it to try to negotiate down their price.
But, yes, I mis-spoke on that point.
N.