Experiences rehabbing in tract housing neighborhoods

[Craig M]

The suburbs around Austin are flooded with cookie cutter tract houses. What are your experiences, good or bad, rehabbing homes in areas like this? It seems at any given time you can find 2-3 houses with the exact same floorplan, lot size, features, etc. on the market.

It seems like the increased competition after your repairs can make these properties less of a deal (in general) than others with the potential for greater DOM/holding costs.

Do you tend to stay away from areas like these? Or is the trick to find a certain level of finish out quality that sets your properties apart from the ones next door, without overdoing it for the area?

[Vikram C.]

I have sold properties in such areas in the Phoenix metro. I actually like such areas because it is easier to comp the properties due to plenty of very similar homes having been sold recently.

There is no particular secret to selling in such areas. Make sure other homes are selling within a reasonable DOM and then try to buy for a low enough price that you will have a decent margin when you try to sell it for whatever price you have comped it for.

Many tract home neighborhoods have a lot of SS and REO that could affect the appraisal, so try to comp the property considering the potential for a lower appraisal than you would like.