Posted by Dimpil on October 16, 2003 at 20:01:19:
Suppose you don’t have a garage or sunroom? Suppose you just want to add a room? How much would that generally cost? Wireing, carpet, paint, roof, hallway, closet? I know every area will differ but just general.
Thanks!
An interesting niche - or not? - Posted by Steve Silva
Posted by Steve Silva on October 16, 2003 at 11:20:07:
I recently bought a small 2/1/1 house for 42k. After converting the garage to a 3rd bedroom, new carpet, paint, updating the kitchen and bath, etc. (no more than 10k in work) it will easily sell at retail for around 80k. So I got this idea the other day … what about specializing in these little 2/1/1 houses that most other investors stay away from, getting them at least a little under FMV, then converting them to 3 bedroom houses along with your other basic rehab stuff and selling at a nice fat profit? I know you can’t do this everywhere, and not in every neighborhood, but in many neighborhoods you will see many/most of the 2 bedroom houses where the garage gets converted into a 3rd bedroom, so in these neighborhoods it’s a no-brainer I think. You might not want to end up having the only house on the block with no garage, but in the neighborhoods where it’s already being down successfully it seems like this might be a nice little “niche”. Anyone have any input, thoughts, comments, experience, etc to share?
Re: Been doing it for years - Posted by Dan-Fl
Posted by Dan-Fl on October 16, 2003 at 13:50:15:
Its the norm here in Fl,I have done over 20,I also convert Fl rooms over to another bedroom .It cost alot less the 10k,about 1k for the fl room and about 4k for a garage to bedroom.Like you said,this only works in workng class areas.Don’t try it in middle and up class area,they want a garage,but the lower class wants some place to put junior for a fair price.We have alot of 2 bedroom houses here going for the mid 50s and the real 4 bedrooms going for 120k and up.So when I buy a 2 bedroom for 50k and put 5 to 7 k in it and turn it into a 4 bedroom and sell for 90k,the buyers come out like crazy.
Re: An interesting niche - or not? - Posted by JD
Posted by JD on October 16, 2003 at 12:10:00:
The numbers for converting a garage wouldn’t work where I live. BUt, If you can buy houses for 42K add 10K to them and sell for $80K then consider yourself extremely lucky.
Re: Been doing it for years - Posted by RichV(FL)
Posted by RichV(FL) on October 17, 2003 at 06:09:53:
Dan,
A very true statement about middle/upper income people wanting garages.
Since values have shot up here in the Sarasota area I have seen many moving into areas that were once “lower end” and are now desirable.
You could just guess what they are doing, re converting those old rooms to garages again. Some are even tearing part of the old home down and building extentions.
But as you said, the converted garage works VERY well in the lower end communities.
Regards,
RichV(FL)
Re: An interesting niche - or not? - Posted by Steve Silva
Posted by Steve Silva on October 16, 2003 at 19:09:48:
Well, generally to buy at 42k, spend 10k in rehab and sell for 80k you need to get a pretty good deal. But even at only $65 a square foot, by converting a 350 sq ft garage to a 3rd bedroom you are adding roughly 23k in value to the house. So that’s where most of the added value/profit comes from in my example. With the one I’m doing now, it is only costing my a little under 4k to completely convert the garage into a bedroom. The other 6k is for paint, carpet, small updates, etc.