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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: TraderC who wrote (21291)	6/4/2004 12:56:17 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

Supposedly, they did only minor fix ups, but what is minor for one person can seem major to another. In your case, you add little or no value to the houses you buy, yet you reap a big profit. The reason you are able to do this is because buyers want to see something finished before they buy it, they can't imagine what the house will look like until it is completed or they don't want to risk the wait or they don't have the cash to put down for the option. This kind of opportunity occurs in distressed property sales all the time. Most people can't see past obvious flaws or they have little idea how much it will cost them to fix. When I bought my house, the owners had a dump in the side yard and they had changed the original plan of the house to have one large bedroom rather than the two that the plan called for. I calculated that little dump cost them $30,000 in lost property value and the fact that it was a one bedroom house cost them an additional $30,000. The dump cost us $300 for a 30 yard dumpster and two days of labor from the two teenagers we hired to fill it up. We decided to leave the bedroom situation unchanged but if we'd needed the extra bedroom, it would have been an extremely miner improvement for us since my husband works in construction. To the sellers, these were problems they were unable to bring themselves to fix because they didn't realize how much it cost them on the appraisal to have only one bedroom (to me it doesn't matter if my pizza is cut into 6 or 8 slices) and how many buyers it kept away when they saw that dump. We could have flipped this house and made the difference they lost in the first three months we owned it.