Greater Boston..anyone a developer, RE agent or purchased a home needing gut rehab (sales, to rent)

[TechieTechie]

I know common wisdom is to place homes on the market in the spring here, to sway people with our awesome greenery.

But, if you are selling a house in Metro Boston (within 495) that needs a gut rehab (will not qualify for conventional financing, construction loan only)....does that really matter?


Interested in replies, no sales pitches please

[porterhouse]

As hot as the real markets still are I don’t think seasonality matters at all currently.

[jayrandom]

Spring is probably more for schools. Don’t think it matters for a gut (or more likely a total tear down). Whoever does the rebuild likely won’t care about schools.

[MikePRU]

I guess it depends on who you think is going to buy your house. If it's a developer, they tend to buy projects all year round. If you want to sell to someone who's going to ultimately live in the house well then there's a seasonality to that as most "end users" do not have their minds on moving certain times of the year.

Ultimately though, my experience is that there are far fewer "end users" who are willing to put in the time and the money to rehab a house these days. So, more than likely you'll end up with a developer buying it.

[Dm84]

Originally Posted by MikePRU

Ultimately though, my experience is that there are far fewer "end users" who are willing to put in the time and the money to rehab a house these days. So, more than likely you'll end up with a developer buying it.

It's more or less an unaffordable endeavor for the average person. Even someone who is super handy can't really do it if in a reasonably affordable way if they have a day job and don't want it to take years.

[MikePRU]

Originally Posted by Dm84

It's more or less an unaffordable endeavor for the average person. Even someone who is super handy can't really do it if in a reasonably affordable way if they have a day job and don't want it to take years.

Agreed. Most people just don't have the time and/or the resources to do an extensive rehab.

If you do the work yourself as you mentioned, it's going to take a LONG time.

Even if you have someone else do the work, chances are you're going to need to live somewhere else. So on top of the cost of the house and the rehab project, you'll also need money to rent a temporary house and also to pay to store your furniture during the project or you'll need to continue to pay the mortgage on your current home that you were living in before you bought the project house. There aren't a ton of people who have those funds.

Even if you can afford to pay someone else to do the work and afford another place to live during the project picking out all the paint colors, nobs, hinges, cabinets, light fixtures, tile, stain color of the floor, etc., etc., etc., etc. that you'll be installing is absolutely a full time job.

It takes a lot of time, patience, and money to rehab a house and it's rare to find an "end user" who has all three of those.

[TechieTechie]

Oh, I agree, most average Joes don't want to worry about a construction loan as they are a PITA. Not my first go round with RE, but haven't encountered this specific problem before. Usually I've bought, renovated, sold and moved locally...but thinking about moving out of Metro Boston to let my RE investment dollars stretch farther.



I didn't think a developer would worry about seasons, particularly in such a hot market.



Thanks!

[sarahmccoy]

If it’s priced right and people in the market place think it’s a good deal, you’ll have multiple offers, doesn’t matter the time of year

[MikePRU]

Originally Posted by TechieTechie

I didn't think a developer would worry about seasons, particularly in such a hot market.

The only time a developer hems and haws about buying at a certain time of year is if they don't think due to the weather that they'll be able to start on the project in a timely manner. For example, most developers are going to be skittish about closing on a property they plan on tearing down in February because there's usually snow on the ground and the ground is pretty frozen which makes excavating a new foundation pretty tough. I believe if the temps are too low then concrete doesn't cure either but not sure about that.

[Shrewsburried]

Originally Posted by TechieTechie

Oh, I agree, most average Joes don't want to worry about a construction loan as they are a PITA.

This. I briefly looked into a property which had been winterized and abandoned for the better part of a decade. This said, the structure was sound/weather tight and rehab was going to be relatively straight forward given my skills and network of tradesmen. Between the construction loan constraints and the occupancy permit issues (i.e., it would have likely been 3-6 months before I could gain occupancy), I ended up abandoning the idea.

Instead, I bought a short-sale with plenty of differed maintenance. I am still doing a significant rehab (e.g., replacing most systems, windows, updating electrical, etc.), but I was able to get a traditional loan with a lower down payment (which free'd up more capital for rehab) and immediate occupancy ... the latter being critical as I didn't have to float both a mortgage and rent/storage. It doesn't bother me sleeping in a bedroom with open stud bays, but I also grew up a "This Old House" level old farmhouse remodel so my standards are quite skewed.