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Selecting Bargain Homes for Real Estate Makeovers - 2009-10-25 |
According to statistics from the local MLS services, approximately 35 percent of home sales during the past year have involved either bank-owned post foreclosure properties or HUD foreclosure resales. And in the vast majority of those sales, the property is sold to the buyer on an "as-is" basis. Most of these homes needed a minimum of several thousand dollars in repairs, with new carpet and paint being just the beginning.
So who is buying these houses?
The answer is, in most cases, not the typical owner-occupant purchaser in pursuit of the American dream. Most of these houses are not in good enough condition to qualify for placement of a conventional home loan, and without that financial assist, most buyers are unable to purchase. In addition, few "retail" home buyers have the vision to see the diamond in the rough.
Instead, most retail buyers need a home they can move into and occupy immediately, and they don't want a repair project for a hobby.
Most are being bought by investors, who are pursuing one of two strategies:
* They are buying these "ugly ducklings" at wholesale prices, then rehabbing them to new home standards. Once complete, they offer them for sale at prices below what a typical buyer would expect to pay for a home with comparable features.
I saw an investor owned rehab in Stone Mountain last week that might as well have been brand new. It has 3 bedrooms, two full baths, a fireplace, garage, and a privacy-fenced back yard. Upgrades included new granite countertops, high end faucets and fixtures, and all new lighting throughout. In addition, the HVAC system is less than a year old, and the house is under a one-year warranty. All this for only $93,000.
The wholesaler related to me that because he had acquired the house from a lender for only $33,000, he was able to build in a reasonable profit for himself and still offer the home to an owner-occupant for a remarkable price. Couple that purchase with the first time home-buyer tax credit of $8,000, and someone can walk into a heck of a deal.
* Other investors are buying now and making only the minimum repairs needed to make the house safe and livable now. They avoid major system repairs when possible, hoping to rent for several years and watch the market recover. If that happens, their payday will be even more rewarding than that of the "buy & sell" investors.
Both strategies are viable, and both are helping to absorb the glut of bank-owned homes now clogging the metro Atlanta housing market. And whenever an eyesore is converted into a respectable residence, the entire neighborhood is given a boost.
Whichever strategy they choose, there are specific characteristics that these investors seek. Next week, we'll examine them.
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Upcoming Events
"EPA CERTIFIED RENOVATOR" TRAINING
Do You Work with Real Estate? You Must Be LEAD SAFE CERTIFIED as of April 22nd.
To all owners, realtors, investors, property managers, contractors, electricians, plumbers and painters. Do you ever engage in any level of renovation? If so, read this:
Any renovator, from owners to contractors, from plumbers to electricians to painters, who disturbs lead paint while working in a pre-1978 home, school or day care center, now must be Lead-Safe Certified. If you’re not, you can face tens of thousands of dollars in fines. Plus, you put the health of yourself, your workers and your customers at risk, which could result in lawsuits. One simple 8 hour class certifies you for five years. It’s that easy.
Since April 22, 2010, there are new Federal rules regarding how you perform any work that disturbs lead-based paint in homes, child-care facilities and schools built before 1978. You now must be EPA certified and follow specific work practices to prevent lead contamination.
Failure to follow the new rules can result in federal fines of up to $32,500 per day or up to 5 years in federal prison, or both. Don’t take a chance - it’s not worth it.
How To Become an EPA Certified Renovator:
In just one day, John Adams will teach you how to meet all EPA requirements and become an “EPA Certified Renovator.”
Don’t wait - register now! Click on “Seminars” and choose your day!
- Friday, July 30th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 06th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 13th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 20th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 27th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
Total Course Cost: $295, includes exam and EPA-HUD 400 page manual
Space is limited to 20 participants.
Training services provided by Seagull Environmental Management Co, Inc.
Courses are approved for purposed of certification under Section 402 of TSCA for the Certified Renovator.
This course has been approved by the Georgia Real Estate Commission for 7 hours of Real Estate Continuing Education
For more information, call toll-free 888-373-0029
Click above on the "Seminars" button to register
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John Adams Presents
“The MetroVestAtlanta.com REO Bus Tour”
Get on the bus for a tour of South DeKalb County’s “Real Estate Owned”
homes. Each house you visit will be available that day for purchase at
a giveaway price, regardless of current condition. Financing is
available!
Throughout the day, we will hear from mortgage providers, people in the
construction business and property managers all discussing today’s
situation with Bank Owned REO properties.
Who Should Attend: Investors, Realtors, Lenders, Prospective Buyers, and
anyone who might want to buy a super-bargain house and either do the
rehab themselves or have all the work performed by the pros.
You will see abandoned dumps and finished products, and everything
in between. And Snap will be there to answer all your questions and
explain the rehab and rental strategies.
Saturday, August 21st, 9:30 AM to 4:00 PM
Your $49 fee includes the bus tour and lunch. You must make reservations. No walk-ups.
There is limited seating and the seats are filling fast. ACT NOW before you miss the bus.
We will be meeting at Suburban Plaza, 2643 N. Decatur Road and Church Street, Lower Level, Decatur 30033 (beneath Hancock Fabrics, in the arcade.)
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