Tips for Newbies - Too Much Competition

[Bryan L.]

I hear people BMWing all the time about REOs and other MLS properties having too much competition, with the prices going too high. Well, here's what one investor in my area is doing - and these are not even REOs or your typical "motivated" sellers, or "distressed" properties. But they are right there on the MLS - out in plain view. Basically, he's buying brick houses that are solid and in good condition - but ugly. These are mostly houses that were built in the 60s and 70s that have never been updated. He's getting these at a small discount, then taking out all of the old stained-wood doors and trim, the paneling, the old ugly cabinet, and the baths. And then updating everything to look modern. After the update, these are selling for prices that are very near those of new houses. I've never really talked with him about it, but I've studied his "before" and "afters" on the MLS, and it's easy to see what he's doing (another advatage of being a Realtor).

[Bryan L.]

@Jon Klaus - I've seen some where he was buying around 80 or 90. Final sales price to retail o-o around 150 and paying their closing costs. My guess on the rehab/closing/carrying would be 20 - 30. These are really solid houses to begin with and are very live-able before he buys them. It's just that they have never been updated. Lots of paneling, old cabinets, etc. But we're not talking holes-in-the-wall and nasty like many REOs.