Re: Finding distressed properties - Posted by Bill Scott
Posted by Bill Scott on September 30, 2000 at 07:17:05:
Amy, be careful of rehabs if you and your hubby don’t have much in the way of building experience. A major rehab is real work and can be an alligator that chews up credit right and left. Finding the problems that need to be fixed can take time and finding good contractors is really tough. Bottom line, buy the property dirt cheap and be ready for surprises.
How do you find them? Usually there are one or two brokers in the area that handle foreclosures. Check the real estate magazines in your area and look for the agents advertising foreclosures. Running ads for homes is also a good way. Joining a local REI club, where there are wholesalers is another way. find vacant properties and look up the owners is another. Rehabs can make you a lot of money—but they can be a lot of work!
I’ve got to get busy this morning on my rehab. Bought a three family a year ago, thought I had two of the units ready to go and the chimmney sprung a leak and needs to be rebuilt–I have a mason doing that. I’m working on completely rebuilding a section of wall (cutting out rotted wood/replacing studs/rafter and sill beam) prior to putting a new bathroom in. I paid $27,000 for this monster and will wind up putting about $20,000 (and a years time) in it and it will be worth about $80,000. Good return–but I wish I had taken on a smaller project first. Oh, and try to look at property on a rainy day—I prefer to buy in the winter so I can see where the leaks are and then fix in the spring and summer. Good luck!