First time fixer-upper

[S104x498]

Hi, my name is Scott and i am currently looking for a "fixer-upper" in the St. Louis, MO area. I am new to the real estate market and have never purchased a house before. From the information i have found on the web and from friends, I think its pretty safe to say there is definately money that can be made if done properly. I am not planning on living in the house, just buying,updating/fix and selling it. Now for a couple questions, would it be a good idea to buy a foreclosed property for my first purchase? I have heard good and bad things about them. I really just want something that is in good shape but, maybe needs updating and landscaping. I will do most of the work myself to save money. What is a good estimate on how long it will take for all the "paper work" to go through to have the house ready to be put back on the market? Any other tips or advise from a professional or some who has done this before would be very helpful. Thank You, Scott

[ashley6943]

Hi Scott,

I am a real estate agent in Illinois, and my boy-friend and his father flip houses. If you don't know much about houses, hire a very good home inspector, this could save you a lot of time, and money!!!

As for the foreclosures, it depends on the price and condition of the home.
Most foreclosures in my area sell for the same price as any similar home.

If you buy the home, fix it up in 2 months, and decide you want it on the market, an agent can have it on the MLS the same day. It doesn't take long to get your home listed.

Don't forget about Capitol Gains Taxes! Budget Budget Budget and stick to it, and your timeline!!! Always have a little extra cash flow for those unforseen problems.(There is always a problem)

Good Luck

Ashley

[kensmith]

The budget is key. I have clients that do this and they are finding that it has gotten pretty hard to find homes with a profit margin that is worth investing in. You will need to be able to cover your rehab costs, closing costs (both sides), and the part that really eats at your profit is the carrying costs. make sure to find out the average days on market for the area you are thinking of doing the flip in. Then add 30-60 days for it to close, your agent that helps with the purchase should be able to help you with these time frames. Why am I stressing carrying costs so much, simple that is the one thing that I have seen the most incorrect budgeting on from new flippers.

Ashley also brought up the point about taxes and that is something most new flippers completely forget about.

Add 10% for unexpected expenses. This way if you don't need it you have more room to lower the price for a fast sale or just make more on the home. Most of the time something will come up that you don't expect.

Home Inspection is a must IMO. Everything that is on the list should be addressed as the same list will come up with the new buyer after you rehab the place. Pretty stupid to make everything look good and forget to fix a few minor things that can open the door for the buyer to renegotiate or worse back out of the contract. Take care of all of the little details and your sale will be much smoother.

That is a good start, best of luck to you.

[bigp]

Scott - you're looking at a good market for Fixers. There are a ton there in St. Louis, but I think you should heed caution. I'd make sure you have a good idea of all the possible issues involved with such a transaction. Ashley had good advice. Budget is essential when flipping houses. Always pad it, because you will most likely go over.

Most of the properties that just "need updating and landscaping" go REALLY FAST, because most people are afraid of anything more. If you want to make some real money doing this, I'd learn some more and start looking for the really messed up properties. Get them cheap and maximize your profits.

[Barry]

Scott,

I am a Realtor in STL who works with a lot of rehabbers. I have to agree with BigP.
The market is really hot right now for investment properties especially in the Soutwest City area. But because so many people are doing it, unless you are extremely lucky, the ones who make the money are the one willing to do a little more than throw on a coat of paint.

Also, I suggest joining the few rehabbers clubs we have in here in Saint Louis. Shoot me an email and I can tell you more about them, when and where they meet.

[simons122]

Hi Barry

Shoot me some info on rehabbers clubs you have in in Saint Louis, if you could?

simons122@excite.com

Thanks a lot

Simon

[Barry]

Hi Stan,
The one I really recommend is:

St. Louis Real Estate Investors Association
http://www.stlreia.com
Contact: Ruth Elliott
Telephone: (314) 962-9255
When: Meets every 3rd Friday of the month, 6:30pm
Where: Assoc. of Realtors, 12777 Olive St. Rd., St. Louis

Also, check out the Saint Louis Rehabbers Club
http://www.rehabbersclub.org/

[mako419]

This message is for Ashley 6943

I have a house that the buyer would have to either rehab or tear down. It's on a great piece of land too. Where in IL does you Boyfriend and his father rehab houses?

Thanks,
mako419

[bigp]

I just want to add to the thread a bit of additional info. While downtown/south city presents a great opportunity for rehabbing, the rental market is extremly difficult. There is a glut of available apartments, and filling them is not easy.

[kensmith]

Section 8 .