In the last month or so I have seen some investors get back into the market. For a time it seemed like they had disappeared.
There are now homes on the market for less than 50K. I saw some of those homes last week. It was a first for me and I have to admit I was curious to see what a fifty thousand dollar house would look like.
They are registered vacant properties that need a lot of repairs.
There are people who buy these properties, rehabilitate them and then re-sell them. There are also people who want to get into the business of rehabilitating derelict homes and are attracted by the low prices.
The process is simple. I can figure out how much a home would be worth if it were in good repair. We know how much the owner is asking for the home. The investor knows, or has an idea how much it will cost to fix it up. The math is simple and people who "flip" houses for a living have experience and know about how much a repair will cost, and also know that they may find some surprises when they start working on repairs. They have a business plan and know what they are doing.
Some of the people that I encounter who would like to buy and rehabilitate a house understand the math and where there is money to be made but they don’t have a clue how much repairs will cost. The city requires permits for most types of work on a home. Some permits are only issued to contractors, some are only issued to individuals if they are living in the home, if it is an investment property the permit will only be issued to a contractor.
I think now is a particularly good time to buy and rehab homes but only for those who know what they are doing and who have the resources or skills needed to do the repairs. There are a lot of people out there who have watched too much HGTV and don’t understand the risks involved in buying an older home, repairing it and re-selling it.
There are currently 1591 registered vacant homes in the City of St. Paul, up from 1575 last month. There are opportunities out there for those who are qualified to take them on.
Twitter
Flickr
LinkedIn
Facebook
RSS
Posterous
Email
FourSquare
Yelp
SlideShare
I agree about flipping the homes there is alot more involved then cosmetics to flip a home. One has to be concerned when buying a home and have it inspected.
Someone pointed out to me last week that these show are not always what is portrayed on the show. That if you go back and check things out it may not appear as the shows portrayed it. Something to think about.
In other news, there has been a popular resurgence of bear-taunting at the San Francisco zoo.
PB