Posted by Trump on July 23, 2001 at 09:16:37:
Are you a member of a local real estate investors club. Find a referral from there. If you don’t know where your closest club is check out nationalreia.com for a list. You know, if realtors are giving you comps, drive by their comps. Odds are, if you fix your house right, it should sell for MORE than the highest comp. You’ve got to really be careful when you listen to realtors concerning value.
Should I Fix this House or Not ??? - Posted by Frank Chin
Posted by Frank Chin on July 23, 2001 at 07:38:06:
Hi Gang:
I have a property purchased as a preforclosure years back at 80K. Recently I found that NO properties were sold in the area for less than 225K.
Problem is the exterior needed fixing. The siding is real old. Parts of the exterior woodwood rotted. Needs a few new windows. Well, you get the picture. One realtor looking at it mentioned its the ugliest house on the block with a dozen other houses.
So I got this contractor who says he’ll start in late May, then, mid June, then early July, and then he’ll call me this weekend. Of course he didn’t call all weekend.
This guy was recommended by my tenant, a former home improvment guy. His son works on and off with this contractor. Having seen horror stories on TV where contractors ripped everthing down, then go start another job, you can understand why I don’t want to call a bunch of people from the Yellow pages.
I called a few realtors already as this is dragging on for too long. They tell me this:
1- Comparable houses list for 249K. Because this one had an enclosed porch, and garage converted to den, it should be listed for more.
2- Its better if its fixed. No problem if it isnt’t if you reduce the price by 20K - say settling for 229K. Some folks like to fix it up the way they want it. Under the circumstances 229K dosen’t sound bad. There’s a big shortage of starter homes in this price range.
3- The contractor gave me an estimate of 8K to do the siding, cap the window frames, replace the rotten wood etc. Not a bad payback to spend 8K and get back 20K.
4- Realtors told me not to wait to long since this is the best time of the year to show the house and find buyers. I tend to agree after trying to sell another property when a tenant moved in January.
5- I have a wonderful tenant of eleven years moving out. The inside is immaculate. He also tells me to let myself in whenever, watch some TV and have a beer. I realize that I might not get this type of cooperation from my next tenant if I re-rent.
6- Wife been suggesting I call some people from the Yellow pages.
So the question is - should I try to get this placed fixed up - or just be done with it - taking 20K less ??? I do enjoy rehabbing and selling a really nice place.
Frank Chin
Thanks everyone for the Good Suggestions - Posted by Frank Chin
Posted by Frank Chin on July 24, 2001 at 12:53:57:
Thanks everyone for your help.
The comments here parallel those of the realtors I interviewed, that is the need to move quickly to to take advantage of an extremely good market for the moment versus making the house as appealing as possible for a quick sale, and maximize my returns.
The Century 21 Realtor I’m leaning towards echo DanT’s view. She suggested listng immediately with the comments that the owner will replace the siding, windows etc. This way the house can be shown while waiting for the contractor. If in the meantime, someone is interested in sweat equity, I can tell the contractor to forget it.
Lor and JohnP expressd my concerns exactly. The house appraised in 1998 for 153K when my tenant expresed interest. A jump of 100K in 3 years is unbelievable. Local papers reported values increasing by 20 to 25% a year since. I didn’t believe it, I don’t see this can go on forever.
Mark mentioned my doing the siding. I’ve been at it since Janauary doing bathroom tiling, ceiling repairs, wall repairs, sidewalks, light carpentry. Siding in the humid New York summer is a little out of my league. Also the need for speed here.
Oh JD, I finally called a number of contractors from the Yellow pages and one who specializes in doing cosmetic work for Century 21 gave some good suggestions. He suggested painting the aluminum siding and putting in a new roof instead of new siding and leaving the roof alone. A rental house across the street with painted alumimun siding looked pretty good.
I agree with Randall that getting everything in order may be the most prudent. The problems here is the shortage of good contractors that can move quickly. I’ll have to weigh the risks involved with Bank appraisals and inspections.
Also, thanks to Trump (the Donald?) and Keith as well. I’m so glad that there’s so many in this community that I can bounce a question off.
Frank Chin
Re: Should I Fix this House or Not ??? - Posted by John P. (CO)
Posted by John P. (CO) on July 24, 2001 at 09:07:08:
Why are you letting this lame excuse for a contractor paralyze you with uncertainty and inaction? You have a great situation on your hands whether you sell as is or rehab first. Weigh the cost and time of fixing against the increased returns, consider the importance you place on selling something of move-in condition versus giving the buyer a chance for some quick sweat-equity. Thank your friend for the referral but move ahead WITHOUT the contractor you’ve been waiting on and cash in.
Oh, and know ahead of time how you’ll handle the influx of cash and the potential tax liabilities.
You made a great purchase several years ago and it should be making you life easier now, not adding stress and fear to it.
Seize the day!
Re: Should I Fix this House or Not ??? - Posted by DanT
Posted by DanT on July 24, 2001 at 06:14:07:
Frank,
List the house for sale with the realtor. List it at the lower price. Continue to look for contractor. If you haven’t sold it by the time the contractor is ready to start, have hime do the repairs and raise the price. Just my thoughts. DanT
Re: Should I Fix this House or Not ??? - Posted by Keith Flaherty
Posted by Keith Flaherty on July 23, 2001 at 19:25:07:
I am a contractor and there are plenty of honest contractors out there. I suggest N.A.R.I. and the B.B.B. for a list of contractors who are associated w/these groups. We are very busy so if you find somewone you like you may want to call him again, after that, he is probably too busy or a goofball!
Re: How bout u repair ? - Posted by Mark (WV)
Posted by Mark (WV) on July 23, 2001 at 13:52:55:
Frank, You say you enjoy doing rehab work so how about doing the siding your self ?It’s not hard work and after doing a rehab there is nothing better than looking at a exterior that looks great and the feeling that u did it.
This isn’t a sales pitch but there is no other part of the work I enjoy more than doing the siding ,I have to hold back doing it till it’s really time to.I’m not the best in the world but I can put up 10 sq. a day by my self ,check prices in your area per square then x 2 = total cost will cover trim and extras.
Good Luck
Mark
Sell it - unless you see appreciation in a year - Posted by Lor
Posted by Lor on July 23, 2001 at 12:32:43:
Hi Frank, You need to look at the big picture - the US economy right now - the economy in your neighborhood. Where do you think the market will be next summer? I buy and hold but am selling a couple houses now because I see a turn in the housing market coming (my prices are affected by Silicon Valley). I recently spent quite a bit on a house I am rehaabbing and will be listing next week. Because it is a starter home in a hot market I think I could have made just as much money if I had done nothing. You might be in the same situation. Personally I would put the market on the house tomorrow. You might even get over your asking price. In my mind the only question is what do you think the house will go for in a year (regardless of whether you fix it or not) - more or less?
fix it - Posted by JD
Posted by JD on July 23, 2001 at 12:06:47:
I vote to fix it. I don’t understand your apprehension about calling a contractor in the yellow pages.
Re: Should I Fix this House or Not ??? - Posted by Randall Banks
Posted by Randall Banks on July 23, 2001 at 09:23:32:
Frank, I have been a home remodeling supervisor for years before starting my appraisal business about 9 years ago. I strongly suggest taking care of your siding and window problems. Most buyers make significant judgments about the property as they first walk up. They almost always will assume the property is much worse and the cost to repair much higher than what you tell them. Also since you are in a first-time buyer area they may be using FHA, VA or other financing that will be collateral strict. In other words you may have to fix the problem before you could sell it anyway as your buyer may not be able to close their loan without remedy of the siding or window problems.
I believe you can check with 2 or 3 places for good referrals of remodeling contractors. Check with residential Architects as many have a group of contractors that they like to recommend and use on remodeling projects they have designed. Second, check with your major lumber companies. They will typically recommend their higher volume contractors and they will be contractors that are paying their bills, an important consideration for you. Third, see if you have a better business bureau, you may get some names there. Get at least 2 bids and an estimate of completion date. Follow up on your contractor’s submitted referrals in regards to their quality and ability to keep projected completion times. Maybe even establish in your contract a penalty for going past the completion date.
Good luck!