Posted by Sean on September 16, 2003 at 12:12:42:
Every place is different Rob, in the rust belt where I am, .5 - rehab is not uncommon. Not every house out there, but not uncommon.
25k a deal on 60-80k is not impossible, particularly if you don’t have to go hard money in my market.
In fact I have purchased houses using HML’s 60% LTV with a 10pt fee, and not only bought the house, put more than enough in escrow for repairs, but walked away from the hard money closing with cash in my pocket. Obviously not every house out there sells that cheaply, but in my area, getting a good deal on a junker is not difficult… they are everywhere. There are about 400-450 foreclosures a month in my county right now… finding distressed fixer uppers in this area just isn’t that difficult.
All markets are different, my market, 25k a rehab is realistic, perhaps not standard, but doable, and .5-rehab is doable as well. Obviously not every property goes that cheaply, but there are enough of them out there if you are looking to do well enough.
There are people who operate on a lower threshold of profit, personally I am not going to rehab a house for a 10k payday… I’d be better off just making 3k-4k a wholesale flip than investing my time and energy in a rehab if its only going to make me 10k.