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Family of four looking to relocate to Arizona from Pennsylvania, looking for information on; real estate market in Phoenix, parking for 35 ft. motor home, foreclosure rates
Beena, rehabbing takes experience and knowledge, and that's why not everyone will take on a home in need of rehabbing. Most people want to move into a home and start living in it.
You and I have been on the forum long enough to know something about each other from our posts, so I think you probably know that I'm highly professional and ethical.
However, to answer your question, when I buy houses I either keep them to rent, or wholesale them to a rehabber, or fix them up myself and sell them at a discount to retail.
If I buy a home at a price where I'll have sufficient cash flow, I'll keep it myself. But I have to do that on a slow basis because I need the sales to keep an income flow in order to buy and sell more.
If I see that I can fix a home up and sell it within 40 days at a discount to the current market, then I will fix it and retail it. At the present time I don't fix up any home that needs major repair or modifications like replacing bath rooms or tearing out walls. That's because of the time required to do those repairs while the market is declining.
The homes I fix today only need cosmetic repair. It is usually always carpet and paint; sometimes tile replacement. The yard usually always needs work and there are also dozens of small repairs. We will use a grade of carpet that is commensurate with the house value. We won't put a $40/yard carpet in a $200k home. We will paint using today's colors and paint schemes, but with neutrall type colors.
We install new light fixtures, bath fixtures, ceiling fans, that bring the home up to date. We'll also install new appliances. Almost always we have to install a new disposal.
If we find termites, we have an inspection and pay to treat the entire perimiter which comes with a one year transferable and renewable warranty.
On the homes that we retail we pay for a home warranty and treat the sale as a normal sale whereby we warranty the normal items in the AZ contract. When a buyer buys a home from us they can be assured that they are getting what they paid for at a discount to current market value.
We want our buyers and their agents to be happy with their transaction and be willing to recommend us to their friends.
Investing in today's market is tough, as the seasoned investors you mentioned stated. One makes small profits, and the investor must work at it. In the boom years, the majority of "investors" were not investors; they were speculators, just betting on house prices increasing.
Today an investor who rehabs homes must have experience and knowledge. S/he must know the market in the area they operate and know the cost of repairs and the value of the property at wholesale and retail. S/he must also be willing and able to accept the inherent risks.
Above all, if one is to build repeat business she must be honest and ethical.
There may be a few rehabbers who won't pull permits where they're required, and a few shysters, but I think they are in the minority. It's like other industries, where people generalize and focus on the negative.
One other thing that is worth mentioning is that the rehabbers are helping to hold up the real estate market today. Most buyers will not touch most of the the properties that are sold at the foreclosure auctions and REO's. If it weren't for the rehabbers then more of those foreclosed properties would sit in bad condition on the market and become a larger blight on the neighborhood, forcing prices down even further.
But the rehabbers fix the properties up, thereby making them attractive to retail buyers who buy and move into them.
Bill, how much would you say you typically put into a house on the items you mention? I am curious because my own (and probably most) houses would require the kind of stuff you mention to be salable in a reasonable time frame. It would be helpful to know how much that out of pocket should/ought to be in making a sales (or maybe even a purchase) decision.
Bill, how much would you say you typically put into a house on the items you mention? I am curious because my own (and probably most) houses would require the kind of stuff you mention to be salable in a reasonable time frame. It would be helpful to know how much that out of pocket should/ought to be in making a sales (or maybe even a purchase) decision.
For a less than 3000 sf home I figure a minimum of $10-$12k for interior paint, carpet, yard work, fans and fixtures. That includes a thorough cleaning to make sure things are cue tip clean.
A rule of thumb is around $1.25 per square foot (floor size) for paint, and $1.50/sf for carpet.
I use a painter who is really good and competitively priced.
I figure $200 per fan which covers cost of purchase and $50 each for installation. About $50 labor for each light fixture bath faucet, etc is s good ball park when there are several to do because the average time will be about an hour each. Light fixtures can take 20 minutes whereas some fans will take over an hour.
You have to over estimate because there will be extra work that wasn't contemplated.
Appliances are easy to price by visiting Home Depot, Lowes or Spencers to determine what quality is needed for that property. I find Spencers to be very competitive with Home Depot, plus they provide superior service.
Our refrigerator compressor motor went out recently so we checked out Home Depot and it would take about 7 days for delivery of a new one. We went to Spencers and the price was $100 less for the same model. We bought it at 6pm and the next day they were there at 9:30 am to install it. Plus they have their own service department.
For a less than 3000 sf home I figure a minimum of $10-$12k for interior paint, carpet, yard work, fans and fixtures. That includes a thorough cleaning to make sure things are cue tip clean.
A rule of thumb is around $1.25 per square foot (floor size) for paint, and $1.50/sf for carpet.
I use a painter who is really good and competitively priced.
I figure $200 per fan which covers cost of purchase and $50 each for installation. About $50 labor for each light fixture bath faucet, etc is s good ball park when there are several to do because the average time will be about an hour each. Light fixtures can take 20 minutes whereas some fans will take over an hour.
You have to over estimate because there will be extra work that wasn't contemplated.
Appliances are easy to price by visiting Home Depot, Lowes or Spencers to determine what quality is needed for that property. I find Spencers to be very competitive with Home Depot, plus they provide superior service.
Our refrigerator compressor motor went out recently so we checked out Home Depot and it would take about 7 days for delivery of a new one. We went to Spencers and the price was $100 less for the same model. We bought it at 6pm and the next day they were there at 9:30 am to install it. Plus they have their own service department.
It says I gotta spread the love so I can't give you rep. But, great info and thanks.
Why in hell couldn't that hard working family put their own lipstick on the pig and save 100 grand?
because most people want to buy pork chops, bacon and sausage, not piglets they need to raise slaughter and process.
Quote:
Originally Posted by Beena
Every house flipper agrees there are lousy house flippers out there. If you are a flipper and you suck and are screwing people over....please tell us a little about yourself.
There are also bad car dealers, car manufacturers, mechanics, doctors, nurses, lawyers, food producers, landscapers, office managers, grocers.....
We had intended to build a 40' by 25' garage for our RV.
Quote:
Originally Posted by Ponderosa
You can find homes where you can keep the RV north of the "Phoenix county" - actually Maricopa County - line in Black Canyon City. It is a relatively long way from Phoenix and not the best schools either. It is hard to get away from Maricopa County; it is bigger than Connecticut. Anyway, if you live in town anywhere you should plan on putting the RV in a storage yard like the rest of us do. RVs in yards are not considered acceptatble "landscaping" in many areas. There is another thread currently that explains some of the difficulties.
We had intended to build a 40' by 25' garage for our RV.
Wow. That is bigger than the typical lot here. Seriously, you are going need about 1/2 ac for that in a development that permits such things. There are many of them. They tend to be either higher priced and nice or total dumps. On my side of town, there are nice homes on 1/2 acres or more that either have rv garages or have homes that have the RV garage built in. You don't see that much here. When I was in Florida, I saw a lot of homes with a two car + 1 RV setup. It's your call of course, but it would be a lot cheaper and easier to get a covered RV space somewhere than living in tumbleweed country and building an RV storage barn. The main hassle I have with having my rigs in storage is the batteries go dead. I put solar on one, but in covered you cant do that obviously. The other thing is the sun dulls the finish very quickly if not covered and the sun also destroys those ADCO covers in a couple months. Also I have to go over to the place to check on it, but that is mostly a good thing as it gives me something to do and a kind of a man cave to hang out in for a while. Covered runs about 120 a month where mine is parked. I've seen RV garages - completely enclosed - for rent too, but that would be out of my league for sure so I didn't even ask.
Thanks for the info,it was well taken. Your response was appriciated!!
Quote:
Originally Posted by ponderosa
wow. That is bigger than the typical lot here. Seriously, you are going need about 1/2 ac for that in a development that permits such things. There are many of them. They tend to be either higher priced and nice or total dumps. On my side of town, there are nice homes on 1/2 acres or more that either have rv garages or have homes that have the rv garage built in. You don't see that much here. When i was in florida, i saw a lot of homes with a two car + 1 rv setup. It's your call of course, but it would be a lot cheaper and easier to get a covered rv space somewhere than living in tumbleweed country and building an rv storage barn. The main hassle i have with having my rigs in storage is the batteries go dead. I put solar on one, but in covered you cant do that obviously. The other thing is the sun dulls the finish very quickly if not covered and the sun also destroys those adco covers in a couple months. Also i have to go over to the place to check on it, but that is mostly a good thing as it gives me something to do and a kind of a man cave to hang out in for a while. Covered runs about 120 a month where mine is parked. I've seen rv garages - completely enclosed - for rent too, but that would be out of my league for sure so i didn't even ask.
You didn't mention in your OP if you have visited the area or not, so if you have then you already know this. We live in SE Michigan, and have been to PA many times. Your state and our state seem to be very similar in terms of how the cities, neighborhoods, subdivisions, etc. are set up. We just visited the Phoenix metro area for the first time a few weeks ago. Major, major differences!
-everything in the Phoenix area looks "new" to us, meaning that since back in the East our towns and cities are well over a hundred, and in some cases, two hundred years old, we were amazed at how relatively new everything in AZ looked. The oldest neighborhoods that we saw looked to have been built in the 1950s, or roughly when AC started becoming a common feature in a house. The suburbs such as Chandler and Gilbert were especially appealing to us, because they look even newer. I am so tired of looking at run down homes from the early 1900s around here and AZ looked SO good!!!
-since the subdivision lots here generally range from 1/4 acre to an acre or more, the first thing we noticed was how tiny the lots were in AZ. I can definitely see why, because who wants to maintain a yard in 110 degree heat, but to park an RV in any of the neighborhoods that we saw would be either impossible or guaranteed to raise the ire of all of the neighbors on the block, if it was even allowed at all. The tiny lots don't bother me at all, because we have spent the last nine years on five acres with a perimeter of pine trees around the edge so we are tired of maintaining this much land, plus, we miss having close neighbors to talk to. To each their own, but once you get used to how tiny the yards are, you have to decide if you can live with it or not. We definitely can, especially since the neighborhoods we checked out all had tons of walkways, public green space, playgrounds, and beautiful landscaping. At this point in our lives, we would rather pay a HOA fee than maintain a bunch of land ourselves. BTDT.
I don't mean to insult you if you have been out to AZ and looked around, but if you haven't, you will soon see why people there park their RVs in storage lots. To move to an outlying area, as you are describing, might be the answer, but another huge difference we noticed was how different distances on a map are out there. Driving in from an outlying area in our cities here takes less than half an hour. In Phoenix, it is much, much farther than it looks on a map. We are learning quickly that the geographic scale out there is entirely different than here. We can drive across the entire state of Ohio in less time than it takes to drive from Phoenix to the Grand Canyon. It's a whole different world in terms of travel times out there.
Good luck! : )
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