Rental Property Investor · Member since 2018 · 101 posts · 44 votes
Typically do you buy fixer uppers, or houses that are done and ready to rent? I can find nIce 2-3 bedroom houses in my area for around $50-70K. I can find foreclosures for various prices. For example I found one for $35K, but it needs a new roof $6K and has to have mold removal, and remediation. Which I got a quote for and is $8500-9000. So in my eyes, buying something done and pretty much move in ready is the way to go. Since I’ll be immediately making money as soon as it is rented (usually less than 30 days). Do you have any other opinions or advise? The forcloser is listed, so it is probably more expensive than hitting the initial auction at the courthouse.
Investor · Wasilla, AK · Member since 2016 · 277 posts · 139 votes
8y
I think the answer lies in what you have to offer. For example. I do most of my own work, so If I buy a house that needs new paint and roof, I'd be paying less than half of the repair cost just in material... and keep what I would pay a contractor... or pay a seller because they just paid a contractor. If, what you have to offer is the ability to find properties at incredible prices through marketing, then you'll probably get houses that need work.
So, if you're not going to do the work yourself, or if you don't have some magical contractor that can do it cheeper (and better) than anyone else, the only reason not to buy it finished is if the price you get it for, combined with the price you're paying to fix it, combined with a very healthy margin for your risk and the inevitable surprises.... There's no reason not to buy it finished.
Investor · Wasilla, AK · Member since 2016 · 277 posts · 139 votes
8y
I think the answer lies in what you have to offer. For example. I do most of my own work, so If I buy a house that needs new paint and roof, I'd be paying less than half of the repair cost just in material... and keep what I would pay a contractor... or pay a seller because they just paid a contractor. If, what you have to offer is the ability to find properties at incredible prices through marketing, then you'll probably get houses that need work.
So, if you're not going to do the work yourself, or if you don't have some magical contractor that can do it cheeper (and better) than anyone else, the only reason not to buy it finished is if the price you get it for, combined with the price you're paying to fix it, combined with a very healthy margin for your risk and the inevitable surprises.... There's no reason not to buy it finished.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Heather Rodden if you can purchase a property that cash flows well from day one that is in good condition, you should definitely go that route (especially as a new investor). I would focus on quality neighborhoods if you are new as well. The numbers always look appealing in tougher neighborhoods, and some folks make money there. Many do not.
Are you looking at single family? Multi units? I personally think most investors would be best served looking at 3 or 4 doors at a minimum.
Rental Property Investor · Member since 2018 · 101 posts · 44 votes
8y
@Sam LLoyd
Thank you for your insight. I can paint, but that is about the extent of my talents. My husband can do a lot. He owns his own business though, and it would take a long time to get it finished between work, family and then adding another thing into it. We do have friends that are contractors, and give a good price as well, but their time lines sometimes are very long as well. Thanks for your response :)
Rental Property Investor · Member since 2018 · 101 posts · 44 votes
8y
@John Warren I’ve been looking for multi unit, but there are not many out there for sale locally. I’m from a small town surrounded by about 4-5 other small towns, and I try to stay in that area. Most of the multi units here are by income/section 8. So I’m slowly adding single family homes waiting on a multi to become available. Currently I have 3 single family homes, 1 bedroom and 2 2 bedroom homes. So I’m looking for a 3-4 bedroom. Thanks for your response! I just didn’t know if I was missing some magical thIng about foreclosures :)
Rental Property Investor · Member since 2018 · 101 posts · 44 votes
8y
@John Warren also it is pretty even across the board. It is all pretty much good neighborhoods. The towns are only 1500-3500 people or so with a large one nearby at 10,000 people
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Heather Rodden every market is different. In small towns it probably makes more sense to buy SFR than small multi for all the reasons you described. Are there any major metro areas nearby you can explore? Even if its 45 minutes to "town" you might have better returns in a larger area.
Rental Property Investor · Cleveland, TN · Member since 2015 · 176 posts · 58 votes
8y
There’s no set answer. I do both. As deals come my way, I run the numbers and decide after that. Wether the deal is a fixer upper or a ready to rent property. Depending on your area as well. You can’t be too strict on only looking for one option or the other.