The San Jose Mercury News published an interesting article about what you could buy in the Bay Area for $157,000. That amount is significant because it's the median home price overall in the United States. Sadly, the homes in the article are one train wreck after another with some described as "dangerous" by the listing agents. One home was half burned down and another was so small it's hard to imaging anyone living in it. Why bother buying any of these deals?
In a word, cashflow. Investors can buy these homes and get a great return by renting them out. This is what investors have been doing all around the area for the last 3 years. In some areas, you can even potentially flip the house, if you put enough work into it. It all comes down to how much effort you can put in and how fast. The key to remodeling or rebuilding a home is time. Professional investors and developers can flip the work done on a home in 30 days, perhaps a little more. Here are some tips to flipping anything:
- Find homes that only need cosmetic repairs (landscaping, paint, light fixtures, appliances). Those are the easiest to spruce up but also the target of many investors so be quick when making a purchase decision.
- find homes that don't need expansion. A good floor plan as is will be easier to improve without the costly process of expansion which includes architect fees and planning fees not associated with other lesser remodels.
- Find homes that only need "over the counter" permits. This includes landscaping, new windows, and other upgrades that don't review plans to go to the city Planning Department. If the home is a truly exceptional opportunity and needs expansion, make sure you can expand getting one of these permits. In cities like Los Altos and Mountain View you can get "over the counter" permits for expansions under 500 s.f. or that are at the ground level.
For those who are looking for similar deals in Los Altos, Mountain View or other nearby communities, don't expect to find anything priced this low unless it's low cost housing that has income restrictions.
Here's the original article on the Mercury News website:
http://www.mercurynews.com/business/ci_17795863?nclick_check=1
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Bryan Robertson, Broker Associate | T: 650.799.9951 | Email: bryan@serenogroup.com | Website: http://www.BryanRobertsonHomes.com |CA License: 01191946 | Sereno Group - Los Altos branch | 369 S. San Antonio Road | Los Altos, CA 94022
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