Posts Tagged ‘home-renovation’

House flipping for profit has re-emerged

Sunday, April 4th, 2010

I read an article the other day on Bloomberg.com about the re-emergence of house flippers. Those who can pick up great prices on foreclosures and remodel efficiently have been able to make terrific profits in areas that only recently seemed to be “dead zones” for real estate investing. In fact, new businesses are popping up that are focused solely on flipping single-family homes.

http://www.bloomberg.com/apps/news?pid=20601206&sid=aH_4WjvZMGrE

During 2009, “flipped” homes (i.e., homes that changed hands within 6 months of purchase) increased by 19% over 2008 across the nation.  However, cities like Phoenix and Las Vegas that have suffered from high foreclosure rates are seeing much higher levels of flipping activity than the national average.

An important boost was given by the Federal Housing Authority’s one-year waiver of its anti-flipping rules that took effect on February 1. Now, FHA borrowers can buy foreclosed homes from owners who have held title for less than 90 days. This brings a pool of first-time buyers into competition for investor-renovated (flipped) homes.

A few other points in the article that I think are notable:
1. Flippers are helping to stabilize prices in neighborhoods that have been overwhelmed by high foreclosure rates. 
2. Foreign investors are returning to the U.S. — both for investment properties as well as vacation homes.
3. As more players see the profit potential and return to the flipping business, the competition for cheap foreclosures is growing and the easy money in quick flips will get harder.

For homeowners and flippers alike, there is much that can modernize and enhance the look and feel of a home without having to spend a lot of money on major remodeling or adding square footage. I always suggest starting by first addressing curb appeal, then floors and paint. An impressive front door helps alot. Next, move to kitchens and baths. New faucets, fixtures, and appliances can do wonders.

Above all, focus on cost-effective, high-value-added projects. Be sure to download my free report, “Home Remodeling Success Secrets: Essential Tips Before You Buy, Sell, or Remodel a Home,” by entering your email in the opt-in box here or at http://TransformYourHouse.com.

 Seek simplicity, comfort and value.

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Is the housing market done falling?

Tuesday, March 23rd, 2010

I came across an article from The Market Oracle in the U.K. that talks about the U.S. housing market, current values, supply and demand, and whether the government can really prevent prices from falling further. Here’s the link:

http://www.marketoracle.co.uk/Article18090.html

Here’s a snippet that summarizes his main point:

“… With the housing market at the center of the credit crunch, any recovery in the housing market could quickly turn the Wall Street recovery into a Main Street recovery. Consumers would start shopping again. Employment would rebound. And stocks would likely make the next move higher. But we’re coming out of a genuine bubble decades in the making. And decades of overinvestment creating oversupply are rarely worked off in a couple of years … Now, we know the government has done everything it can to prop up the housing market. From tax credits to the Fed buying mortgage securities, no price has been too high. [But] the housing bubble was just like any other bubble. Prices must fall to a point where all the excess supply will be bought. All the costly government efforts have merely been delaying the inevitable ….”

In effect, he doesn’t think housing prices are done falling — he thinks it could fall another 10% or more — so it’s not a “safe” investment.

Relevant to our ongoing discussion about remodeling to increase a home’s value, he goes on to say, “… In the post-housing-bubble world, consumers look at what they can afford, not how much they can ‘flip’ a house for or how much equity they’re going to get while only paying interest on their mortgages … That’s why we have to look at what really drives housing prices in a normalized housing market: income, rental rates, and interest rates ….”

So, for those who are trying to sell a home, or for those who still want to buy a house as a turnaround project (“flip”), the main point I take away from his analysis is that, more than ever, you must make your home stand out from the crowd. I think you can still make money on a house project in many areas if you spend wisely and create a highly desirable home that buyers want more than the comparables and for which they are willing to pay up.

With this challenging objective in a difficult market, there is much that can modernize and enhance the look & feel of a home without having to spend a lot of money on major remodeling or adding square footage. Start with curb appeal, floors and paint, then move to kitchens and baths. An impressive front door helps alot. New faucets, fixtures, and appliances can do wonders, too. Above all, homeowners must focus on cost-effective, high-value-added projects.

You know my motto:Seek simplicity, comfort and value.

Be sure to download my free report, “Home Remodeling Success Secrets: Essential Tips Before You Buy, Sell, or Remodel a Home,” by filling in the opt-in box

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An opportune time for home remodeling

Sunday, November 1st, 2009

One of my blog readers sent me an email the other day with some interesting points. He started by saying, “After teaching real estate development at the MBA level for 7 years, I came away convinced that one of the most valuable lessons of the class was to treat  their personal residence as a real project and also to factor into the process the lifestyle implications of the individual purchase options….”

Of course, this is the basis underlying everything I talk about on my blog and e-book. Whether or not you plan to sell your home in the near future, you should always think in terms of resale impact–as well as personal enjoyment–whenever you are considering home improvements, remodeling, or simple home makeover projects. 

My reader and I also agree that today’s economy and depressed construction and remodeling industries are offering homeowners a real opportunity to make value-added home improvements at prices that are perhaps 25% below what they were just 2 years ago, and probably much less than they will be in 2-3 years from now.  It’s also a great time to refinance. 

So, if you have been considering launching home remodeling projects, either for increasing your home’s value or for simply updating it for your own enjoyment, now might be the opportune time. But don’t jump in willy-nilly. Take the time to prepare. Get consultations and bids from reputable contractors (your friends & neighbors might have some referrals). See what you can learn online. Use resources like my blog and e-book to help you avoid problems, gather ideas and direction, identify green ideas to incorporate, decide what you will do yourself (DIY) or contract out, and learn tips on negotiating an appropriate agreement with your contractors.

Visit my full blog at http://LauraMartindale.com.

Follow me on Twitter! http://Twitter.com/LauraMartindale

Seek simplicity, comfort, and value!

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Home repair contractors – be sure to inspect their work

Sunday, October 11th, 2009

I have written about working with contractors on home remodels in the past (e.g., http://transformyourhouse.com/blog/?p=10). Although most are honest and hard-working and indispensable when specialized knowledge or skilled craftsmanship is needed, I could create a blog dedicated entirely to contractor problems, tips, and advice on how to work with them. Here’s another brief war story.

I was in escrow to sell a house that we had remodeled extensively, and the buyer’s inspector came up with a list of minor issues to fix or bring up to code. So, we fixed some ourselves, and some we fixed by hiring a home repair contractor (basically he was a licensed handyman with one laborer).

After escrow closed and the buyer had moved in, the buyer brought out the inspector to re-check everything again, and he said that certain items still weren’t up to code, such as an exposed bundle of spliced electrical wires for some of the low-voltage landscape lighting. When the buyer called the home repair contractor we had used to come back and fix it, the contractor told her that he had done a substandard job because we had told him to do it “on the cheap.”

What we had actually told him was to do the minimum required to bring the minor items up to code, i.e., no “gold-plating.” For example, just put the spliced wires within an electrical box. But the repair contractor instead sought to explain away his substandard work by blaming us for supposedly telling him to do a substandard job, which of course made him look ridiculous. I hadn’t personally inspected all of his tasks because most items were minor, we were quite busy moving out, and I simply trusted that it was done appropriately.

But this serves to show that unless you have good reason to trust a contractor implicitly (such as a long prior history of superior work from him), you can’t be complacent in assuming that any work will be completed properly, no matter how minor it seems. There’s always the possibility that a contractor might cut corners, forget to do something, take advantage of a situation, or try to set himself up for another payday in the future, so you have to stay vigilant. In this case, the contractor ended up having to go back to perform the substandard repairs properly, but only after making himself look inept in the eyes of the buyer (who would have been a prospective new client) and burning bridges with us.

It’s not my intention to disparage all contractors, because they have done a lot of good work for me. But even the good ones can get distracted by other jobs and bigger clients. My blog is for giving ideas, advice, and cautions to homeowners, and so I’m focusing more on the occasional problems that might arise than on the good jobs contractors typically do.

Need advice on home remodeling, affordable home makeovers, home repair for resale, or home staging for putting your home up for sale? Feel free to contact me for a consultation.

Seek simplicity, comfort, and value!

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For high-impact home remodeling, seek simplicity, comfort, and value

Sunday, August 9th, 2009

I’m going to take a moment today to review the underlying basis for all of my home makeovers and remodeling projects.

You always need to think in terms of resale, even if you have no intention of selling the house anytime soon. After all, for most people their home is the largest investment they have. I know many people who don’t like to look at their home as an investment — it’s where they live. But particularly in high-housing-cost areas (despite the big downturn in prices), their home is a family’s most valuable asset.

With this mind, you must think in terms of maximizing the value of your remodeling and home improvement projects. I talk a lot about this in both my free special report and my e-book

The overall price levels of an area will impact the amount of money and the types of upgrades you might want to pursue, depending on your goals, e.g., immediate resale, longer-term resale, or strictly personal enjoyment. For example, you wouldn’t invest $50,000 to replace all the floors with 3/4-inch hardwood, or $100,000 for a fancy swimming pool, if comparable homes in your area sell for $250,000–you simply won’t get your money back.

But in high-cost areas like coastal California, where prices for even modest homes can easily surpass $2 million, a $50,000-100,000 investment in something like a decorative swimming pool/waterscape as an enhancement to your outdoor living area might be worthwhile.

But no matter where you live, many great ideas can be carried out quite inexpensively (by any measure). In fact, some of my favorite improvements have involved, for example, a fresh coat of paint that I did myself, sandblasting and staining the front door, an antique chandelier found in the classifieds, a sofa set from Craig’s List, or Saltillo tile flooring–which is used in many of the finest Spanish, Southwestern, and Mediterranean-style homes but can be bought for as little as a buck per 12-inch tile.

My personal design credo is: Seek simplicity, comfort and value!

Simplicity means muted neutral colors, bright, open, airy, spacious, and uncluttered. Comfort means designing for function, usability, and durability rather than purely for style. And Value means cost-effective quality, i.e., always seeking good quality for a reasonable price.

If you keep this simple phrase in mind, it will go a long ways in helping you to dramatically & affordably transform your house.

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