Hey I thought I’d run this idea by you because I think its great…
There are a bunch of homes in areas in Salt Lake County (Magna, Rose Park, Kearns, West side Salt Lake, etc) that have a great potential for remodels. The reason they have great potential is because the homes are pretty trashed and the everyday buyer in that price range does not have the cash to fix it up, and more importantly they can’t get a loan because a bank isn’t going to loan on a house in this condition. Well, some of these homes get their value hit so hard they are selling for anywhere from $50K-$100K as bank repos. However if you go in and do a quick cosmetic uplift, maybe a new vinyl exterior depending on condition, new carpet, new paint, nice cabinets (but still cheaper ones), you can turn around and sell these things for a nice profit because buyers will pay up to $150K for a home in decent condition.
I have been showing a client these places and he is going to submit a couple offers on bank repos next week and do the work himself and turn around and sell it and make anywhere from $20K-$40K depending on the deal with a 6-8 month time frame, and it usually works out to be a great return on his money. The one he has his eye on will actually be around an 18% return. The deals I have been looking at with him have all been less than $70K and need around $20K of work. In a nutshell, he is into the home TOTAL around $90,000. Then he can turn around and sell it for anywhere from $120K to $140K depending on sq footage, # of bedrooms and baths, area, etc.
Attached is sheet I made of a guy who did this all last year. He successfully did over 5 of these in the worst market most of us will ever see. I know of a few other guys who are jumping on board as well.
Here’s the advantages I see to a deal like this:
1) Not very expensive. You won’t extend yourself too much.
2) Lots of buyers. Surprisingly Rose Park and areas on the west side of Salt Lake (900 W to 1700 W) have been selling quickly and had good turnover. It’s not like trying to sell a million dollar east side home that don’t move quickly and stay on the market for a long time.
3) Return on money. I have looked at a lot of remodels this year and even for the guys who pick up a home in a better east side location usually will max out at $40K profit, but yet they need to pay upwards of $150-$220K just to get the house, and THEN they have to remodel it. The more expensive homes don’t necessarily mean better return on $$, in fact sometimes it is worse.
4) Worst Case scenario. I always like to look at deals with a worst case scenario in mind. Meaning, if for some reason you said, “Crap, I HAVE to sell this in a weekend!” We could put it up for around $109,000 or even $105,000 and you’d still make a little money and it would sell. Think about it from a buyer’s perspective. The only thing even decently nice under $120k in ALL of Salt Lake are condos and many are only one or two bedroom, so if you are advertising a 3 bed, 2 bath 1,400 sq foot home you will be able to sell it. These homes are out there.
5) Short time frames and turn around time. These remodels are quick and don’t need to be anything fancy or over the top. As long as it is nice and all the systems in the home are working, low income families will look at it and like it. You really could do most work within two months from what I’ve seen, and in some cases one month if you are working fast.
Sorry this got so long, I just think its one of the only things that makes sense in today’s housing environment as far a flips and remodels go. These deals really are selling quickly and more investors are jumping on board. I sent my client three new listings last week and all three are under contract now.
June 16 (Reuters) – The U.S. Senate voted on Wednesday to give homebuyers another three months to settle on their contracts and take advantage of a popular tax credit that sparked a rush of activity in the housing market.
The Senate, with a vote of 60-37, accepted an amendment by Democratic Leader Harry Reid that extends the closing deadline to Sept. 30 for buyers who met the April 30 deadline to have a signed contract.
The current deadline requires buyers to close by June 30 to get the $8,000 tax credit for first-time homebuyers. Existing homeowners buying a new primary residence are eligible for a $6,500 credit.
Reid offered the measure as an amendment to a bill that would extend some popular business tax breaks and extend unemployment insurance benefits for jobless workers.
The proposal would not have a significant impact on future home sales as the extension would be only for home buyers who already had a contract in hand by April 30.
The popularity of the tax credit has caused some anxiety because settlement offices are inundated with buyers trying to close on transactions by the end of this month to get the tax break. (Reporting by Donna Smith; Editing by John O’Callaghan)
Some interesting articles have been coming out about an increase in home sales.. You know many people in the industry are having mixed feelings about what is to come in the coming months? I have heard in Salt Lake City UTAH, some people are talking about another 10 percent drop in Real Estate prices. Now that is in the upper priced properties, but wow that will be a shock if that happens..
Huntsman Family acquires Sotheby’s Franchise in Idaho and Wyoming. The luxury Real Estate Brad of Sotheby’s international has a new owner.. The Hunstman Family.. Many in the Salt Lake Valley are familiar with the household name of the Huntsman’s..
Interestingly, the Hunstman Family has decided to become a franchise owner of the Sotheby’s Brand. I think this is a great idea, NOt just because I am a broker for Sotheby’s Salt Lake office, but rather I have seen their Huntsman Springs project, and the Luxury Real Estate market share Sothebys has on the United States is unsurpassed. Which will help them sell their project.. I welcome them to the family.
So I thought to follow up with my earlier post today about Luxury Yachts, You all would enjoy to know even the Rich and Famous are suffering through this down Turn.
Apparently they can no longer afford the 20,000 sq. ft. mansions they call their 3rd homes! The one thing the article does not point out, is most of these guys get foreclosed on and because it was a portfolio type of a loan or whatever, it usually doesn’t even hit their credit. Which obviously wouldn’t matter, because most of the time, just because they are getting foreclosed on doesn’t mean they don’t have any cash. So as this article may portray they are hurting as the common person in society today, the rich and famous are not going to get any sympathy from this reader..:)
There are going to be some millionaires made in this recession, some of the properties are going to be sold for a steal. And when the market comes back, oh and you know it will because we are Americans and we have a very short term memory, they will sell for a bundle.. Enjoy..
You know as I sit here looking at properties for all my clients I come across this website. In a down economy, I am glad to see the billionaire’s of the world can still aford life’s small luxury’s.. This is great, what they don’t tell you is how much it costs yearly to just maintain the enormous boats. What do the Rich and Famous do for vaccation. They go float on the ocean in one of these Yachts!
How many houses do you think I would need to sell to afford one of these guys? I want one..:)
On a lighter note, if you are looking for a good deal check out the bank repo site for UTAH>
The big news today across the financial world is that the yield on 10 year Treasury bonds (also known as government debt) has risen to 4%. One of the reasons the yield rose is because there isn’t as much demand for goverment bonds right now. The lessened demand for this goverment debt was spurred on by the jobs that were created this past month, ‘stronger economic data’ according to the Wall street Journal, and the amount of debt the government has already issued to finance itself.
So what does all that hoopla and finance stuff mean to the everyday consumer??? It simply means you can expect interest rates on homes to be on the rise as well. Many economists and other experts have been predicting this for a long time, and now it appears it is happening. Mortgage rates are tied to the bond market, so expect mortgage rates to follow. So if you’re expecting rates to get even lower than they have been for the past year and a half, I believe you have waited too long.
Comments? Opinions? Let’s hear ‘em. Here’s the article:
Here are a few articles I have found that really give some great info in regards to the current status of our State. Utah’s Real Estate market is heating up, Buisness are moving in. Development is picking back up.. Some postive things are happening in our wonderful state..
Planners hope to recreate ‘Life on State’ Deseret News
SALT LAKE CITY — Back in its heyday, before I-15 was built, State Street was one of Salt Lake County’s busiest roads.
Now, the road reaching from South Temple to 12300 South is second or third choice to stretches with more lanes, better scenery or fewer lights.
Ted Knowlton wants to change that
SOUTH JORDAN — Kennecott’s Daybreak community ranked sixth for 2009 home sales among leading U.S. planned communities, according to a Washington, D.C.-based real-estate firm.
February Marks Fifth Straight Month Of Increasing Home Sales UtahBusiness.com
St. George Provo-Orem growing fast
Population » Salt Lake County now has more than 1 million residents The Salt Lake Tribune
Did you know St. George and Provo-Orem are the nation’s second and third fastest-growing metro areas?
Only a Sunshine State city outshined Utah’s top gainers in population growth this decade.
Here is another deal of the day. This will go fast, so if you are a first time home buyer looking for a home in Sandy, UTAH take a look at this. All of these homes are going fast. We do not have time to wait on the sidelines while these come and go. This is a great opportunity for a first time home buyer looking to get into the upper East Bench of Sandy Utah for an affordable price. This does not come around very often so let me know if you are interested.
10244 S. Flanders Rd. 1666 E.
List Price $186,000
2 car garage
2082 Sq. Ft.
If you want more info drop me an email or give me a call and I will send it your way, no pictures available at this time..
