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.