Worth the Effort? - Posted by Big Al

Posted by Ben on January 26, 2001 at 19:09:49:

Depends on how good of a deal they are and how much you spend to “FIX THEM UP”? If you plan to rent, how much would it cost to make them rentable? If you plan to resell, how much do comparable properties in the area that are in better condition sell for? Remember the law of diminishing returns. People who live in low income neighborhoods can’t afford and don’t expect to own the best. Years ago I purchased a double wide trailer with a city lot. It was in a very bad part of town and had been forclosed on by an out-of-state-bank.
It had been empty for a while and the local drug users had kicked the back door in and were using it as a hang out. To give you an idea of the condition, I will say that the toilets were not working so the floor seemed to work just fine. If you know what I mean?

I bought the property for $5000. I only spent $5000 fixing up the trailer which included replacing the shingles on the roof, replacing all the carpet, replacing a toilet, replacing some water damaged wood on the floor and finishing an unfinished add-on room. The point I want to make is if I did all this work and only spent $5000 I used very cheap material. The cheapest I could find. The shingles were some that a building supply store had sold at a bargain because of some flaws. The cheap carpet was sold even cheaper because it had flaws. I spent one month fixing up the trailer and sold it immediately for $18,000 to a person who was excited about being able to own such nice looking property. Get the point? Fill the need as well as the expectations for the market in the area at a price they can afford. Nothing more!

Hope this helps.

Worth the Effort? - Posted by Big Al

Posted by Big Al on January 26, 2001 at 17:54:25:

I have found some properties that look like they would be good fixer upers. The thing is the neighborhood they are in is run down and I wouldn’t want to live there myself. Is this something i should consider or not? Thank you in advance for any advice.


I Agree with Rolfe - Posted by Rick Wheat

Posted by Rick Wheat on January 27, 2001 at 05:04:35:

Don’t make the mistake of analyzing these properties as if you were expecting to live in them. My wife would HAVE A FIT if I asked her to move into most of my properties, but I still make money off them.

The neighborhoods to AVOID are those that have little or no improvements visable, or seem to be declining. If there are any houses being renovated, if there are any beautification projects going on, those are probably good places to buy.


Only if they make money. - Posted by Rolfe Kurtyka

Posted by Rolfe Kurtyka on January 27, 2001 at 01:32:18:


I fully understand your feeling of “I wouldn’t want to live there”. And hopefully, by the grace of God, you nor I never will. But that does not mean that the people who need to start out there won’t be a great customer for a house that is fixed up nicer than the other comparables on the market at that time. My fresh renovations are the nicest, freshest houses the buyers will look at, and priced accordingly. It’s a real win/win, as long as we don’t spend too much fixing the place up!

Good Luck; Rolfe