Rehabbing in Springfield MA - Need Advice - Posted by Frank Chin
Posted by Frank Chin on February 22, 2001 at 06:35:25:
I live in New York City but currently considering doing Rehabs in central Massachusetts, in and around the city of Springfield for two reasons:
1- Single and two family wrecks can be bought for 30K or less, rehabbed for 20K to 25K, and sell for 65K to 75K - so I’m told.
2- My niece and her husband, Rob, are rehab contractors, and had done between 15 to 20 rehabs in the area in the last several years with a local investor no longer doing it. They’re looking for a new investor - ME !!
So I spent the last weekend there looking the town over, as Ed Garcia would say - hit the streets. Here’s what I found:
a) About two pages of foreclosures and auctions in the Sunday Real Estate section.
b) Drove by some of the rehabs he’s done. Pointed out the ones that were sold. BUT, several finished rehabs were the market over a year. One was with an out of state rehabber hoping to do do another once he’s got this one sold. I was thinking - that could’ve been me.
The other property was with the local rehabber - who had a for sale sign on the front lawn for the past year. I was wondering because he’s asking 75K and the neighborhood didn’t look so bad. He’s currently collecting $1,300/month rent - so I’m told. I’m also told he paid 2K for it and spent 40K rehabbing it. Rob showed me the before and after photos from his album.
d) Checked out one property listed for 24,900. Looked through the windows - inside needed extensive work. Rob was itching to do it. There’s boarded up house across the way. Wanted to do that one too!! The house next door had REMAX for sale sign proclaiming “Seller Financing”. Half a dozen other houses on the same street looked OK.
e) Drove by some VA and HUD stuff that’s been around for a year or so awaiting buyers. Rob had looked at some of them with other investors.
f) Checked out different neighborhoods. Just in any other town, they range from historic districts to war zones.
g) Called a few realtors about their listings. But I’ve been calling realtors for the past several weeks - and they by in large are not creative. One started reading MLS listings of properties in the 75K area. I asked - how long they’ve been on the market? “500 Plus days” was the answer. When I said “Oh my !!” - she replied “I always start with the oldest listngs”
I came back to give it some thought. Told Rob that I’ll be returning to check things out more thorougly. My preliminary thinking:
A) I might have a tough time unloading these things.
B) Maybe call the the owners of the unsold rehabs? Offer to L/O nad try selling them myself? Then I can find out why they’re not selling? Suggestions here.
C) Forget B - and go to the sheriff’s sale amd auctions and see how much they’re going for. See who shows up to bid and check the areas where these things are.
D) Talk to mortgage brokers about financing for buyers only after I have a better fix on things.
E) Wife thinks I should call half a dozen brokers to look at lots of propertes - just to get the feel? I think looking up comps on the internet and driving by the house would do just as well. Paralysis of analysis here?
Question for experienced rehhabbers out there:
- Does this town have potential?
- Should someone from out of town even attempt this?
- Is there something I’m missing, or not doing? I plan to spend several days a week there researching if there’s potential.
- Should I stay in New York and find something local? New York prices are 10 times higher.