Home refurbishing

"El Relámpago(LZone) - Humanity First!" (lightningzone) 05/03/2014 at 18:22 • Filed to: None

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Is this still a fast way to make good money?

I'm thinking that maybe I could quit my not so exciting job, and take a couple of people from the construction department of the company I'm working for, and start a home refurbishing business. You know, buying houses that seen better days, from people who urgently need money or auctioned by banks, making them look great in a few days and sell them on for a nice, minty profit.

Vince-The Roadside Mechanic > El Relámpago(LZone) - Humanity First! 05/03/2014 at 18:34

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I think that would be a fun way to make a lot of money. I love HGTV.

El Relámpago(LZone) - Humanity First! > Vince-The Roadside Mechanic 05/03/2014 at 18:43

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I could also fail, and I doubt that my boss would welcome me back with his arms opened, if that happens.

jariten1781 > El Relámpago(LZone) - Humanity First! 05/03/2014 at 18:56

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My brother in law does it. It's not easy, but doable if you have the cash reserves. I talked to him a couple years ago about it.

It's not a flip in a few days kind of thing like the shows imply. Most of the time you will need to hold the house for 90 to 180 days so it qualifies for federal mortgage insurance. Also if you're doing it as a primary source of income instead of a side investment you get hammered by taxes. He recommends someone getting into the game have at least the value of the first house they purchase in cash if they don't want to flirt with bankruptcy.

davedave1111 > El Relámpago(LZone) - Humanity First! 05/03/2014 at 20:24

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Property development is always popular in a rising market because people can kid themselves that the higher price they're getting a few months later is because of the work they did. You see a lot less of it in this kind of market because actually adding value is hard.

It's definitely not impossible to do it right and make money, but be aware that you'll be competing with people who already know what they're doing.

Once you factor in the capital cost, I suspect you may make more money as a contractor. Depends on your local market, though.

El Relámpago(LZone) - Humanity First! > jariten1781 05/04/2014 at 08:00

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Not sure if I like the idea of holding a house so many days, pretty sure that I will need initial investment for at least 3 to 5 houses than, because I don't see how I can spend more than 5 to 6 days on a house, maybe 9 to 10 if it is in really bad shape.

El Relámpago(LZone) - Humanity First! > davedave1111 05/04/2014 at 08:30

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It's not that hard, a house in a bad shape, that needs work can cost as little as half its avg. market price. If you fix any problems and major problems(nobody wants those), and spend wisely on stuff that people actually want and consider good value, you can add value, I think.

davedave1111 > El Relámpago(LZone) - Humanity First! 05/04/2014 at 09:34

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As I said, it's not impossible. But don't go into it with the idea that it's going to be easy money. You hear a lot about how lucrative it is when the market's going up anyway, and then it all goes quiet at times like this because it wasn't really the work that was making the real money in a lot of cases.

Don't forget to factor in the cost of doing work when working out if you've added value - you need to pay yourself and your workers, obviously. It's possible it's worth doing just to get that work for yourself, but you haven't added value that way.

I also suspect that this is one of those areas where you make your profits when you buy, rather than when you sell. Find the right house at the right price and anything's possible - but normally there's competition for the right properties, so the prices are a bit higher than you'd like.