We finally got the initial survey done for The Wee House (yes, I finally ditched the whole House #1, House #2, House #3 nomenclature), which means we can get started on the addition and other exterior work. Thankfully there were no issues with any of the actual boundary lines, and we’ve got enough room to add the driveway the city is requiring and maintain the necessary 5′ easement on all sides.
I went and looked at a couple of properties with my realtor yesterday, and one is actually a surprisingly good candidate for a quick flip, despite the fact that it’s a REO that has been listed on the MLS for over 100 days. It’s a brick home built in 1994, in a good neighborhood close to schools, and is a 3-2, very large two car garage, with about 1150 sq. ft. It was originally listed at $95,000 but it’s down to $75,000 now, and has been sitting at that price for nearly a month.
I’m a little baffled that it’s still on the market, as it’s well-built, has tall 9 foot ceilings throughout, and tray ceilings in the master and kitchen. All the major elements (roof, furnace, electrical, and plumbing) look to be in good shape. The major work to do (and why it hasn’t sold yet) is that the flooring has been removed throughout the house, except for some cheap vinyl flooring in the kitchen and bathrooms, and all of the fixtures, lights, and ceiling fans are cheapo builder-grade. It just gives off a very empty and half-finished vibe, and the bedrooms are all on the small side, so there’s little in the way of immediate appeal to your average first-time homebuyer.
If I could get it for around $65,000, though, it might make for a decent little quick flip, and a nice break from the major rehab work I’ve done on the last two properties. Crown molding and paint would go a long way on this one, hardwood floors in the dining and living room, tile in the bathrooms, and carpet in the bedrooms, as well as upgrading fixtures and appliances, adding a privacy fence in the back yard, painting the exterior trim, and a little landscaping.
Similar 3-2s have been moving in the $100,000-$110,000 range of late, and I think I could get a relatively quick sale if I listed it at $97,500. I’d probably spend about $10,000 renovating it, so I’d be in it for about $75,000, which’d give a final net profit of something along the lines of $7,500-$10,000. Not a huge profit, obviously, but it’d make my contractor happy as far as keeping him in work, and any extra money is, you know, money.
One potential issue could be seasoning for any FHA buyers, as I could honestly get in and out of this one in 2-3 weeks, as all the work needed to be done is cosmetic and wouldn’t even require permits (except for the privacy fence). Selling it before I’d owned it for 90 days would potentially exclude FHA buyers, which is definitely something to consider, but I don’t think to the point of excluding deals like this from consideration, as you can’t see the future and know only FHA buyers would be making offers.
The other option with this property is just to paint it and get flooring down and rent it as-is, as it’d probably rent for $850-$900. That’s more in my line of thinking as far as hunkering down for 2009 and looking to only pick up rentals, but this property is a bit unique in just how little it needs to get it fixed up and ready to flip. I wouldn’t tackle a project like this if it required a major rehab, for a payoff of likely less than $10,000, not knowing what the economic environment might be 3-4 months in the future when I try to sell it, but this one is a bit of a different beast, as far as quickly getting in and out.
The other property we looked at was a horror-show. It was a 4-2 2000 sq. ft house out in the country on 4 acres, that was a foreclosure that was just listed at $44,000. Sounded great and didn’t look too bad from the driveway. Until, that is, our realtor got the front door unlocked and opened it up, and we both just stood there. I’ve never seen that much black mold in a place, as it literally looked like the sheetrock in the living room that we could see was painted black, with the carpet pretty much covered in mold as well.
I never thought I’d say this but I was like “Umm, yeah, I’m not going in there” and he expressed relief that I said that first, as he had no desire to venture in himself. I know you can remediate pretty much anything if you have the money and motivation, but not the sort of thing I ever want to tackle, when other prospects are available.
