How to look for run down properties

[flyingsquirrel]

I am thinking of getting a run down property for renovation and flip.

How can I locate these kind of properties?

 

[fumbrunner]

MLS. Public Auctions, etc. Pretty simple answers to a vague question.

 

[bizaro86]

Personally, I'd look for properties that are cheap for the location/size, not properties that are run down.



I went to an MLS listed house here in Calgary during the depths of the recession that was listed for 160,000. It was gutted down to the studs, and needed a complete renovation. That's work we could do, so we went and had a look. We estimated a post reno sale price of $220k, 10k in selling costs, a 20k reno budget (materials and a few trades, doing most of the work and contracting it ourselves, based on 3 recent reno projects, so it was a good estimate), and a 25k buffer to cover carrying costs, contingency, and my profit. So we were prepared to offer 165k. The property sold for $225k, after a steady stream of people in toolbelts came through to look at it. So even though it was run down, it wasn't a deal.



In a similar fashion, I made an offer on a run down condo of 160, and lost out to another bidder. Now the condo is back on the market (9 months later), totally renovated, and its been price reduced down to 180. Do you think either of these people made money?



If you find something that is well under its value, and its in good shape, why wouldn't you buy it? The goal isn't to practice doing renos, its to make money. If you can get the same discount without doing the reno, spend a weekend in Banff with the reno time/money, and enjoy your profits. If you are going to do a reno, make sure you get a big enough discount.



Regards,



Michael

 

[flyingsquirrel]

You have a really good point there. The goal is to make money, not to have fun doing the reno.

So how about foreclosure? I was told that usually the foreclosure is not that much cheaper than the regular sale.

 

[Thomas Beyer]

[quote user=flyingsquirrel]I am thinking of getting a run down property for renovation and flip.

How can I locate these kind of properties?




drive around .. hang a notice on doors of houses that look ugly to you ..

flyers ..

ads in the paper and its online equivalent: Google Ads, Kijiji, craisglist ...

word of mouth ..

flyers at places where people with ugly houses hang out: Wal8Mart, HomeDepot, Pawnshops, ValueVillage ..

 

[flyingsquirrel]

thx for the suggestion. I will try the kijiji and flyers.

 

[bizaro86]

[quote user=flyingsquirrel]So how about foreclosure? I was told that usually the foreclosure is not that much cheaper than the regular sale.




I think its hard to make that generalization. There are good deals available that are foreclosures, and there are some foreclosures that are terrible deals. Just like there are good and bad deals on other MLS listed properties, the private sale sites, kijiji, the REIN classifieds, and your local supermarket. Your job as investor (or smart grocery shopper!) is to sort the good deals from the bad deals, and find one that works for you.



Regards,



Michael

 

[2ndstory]

Get your agent to run an MLS search of houses that have been on the market more than 60 or 90 days. I've found some good deals that way.



BTW, if you don't enjoy renos or have no experience in that area, don't even think about doing a flip to make money.



Nik

 

[RandyDalton]

Hi,



What area town/city are you looking at buying into?



I know here in Hamilton of a couple of realtors that are very good at finding these types of properties. Maybe the city/town you are looking for has similar experts? Worth asking around.



Regards..Randy D.

 

[flyingsquirrel]

Actaully, I am interested in Hamilton too.

Can you refer to me those realtors?

 

[dplummer]

In addition to the great suggestions already given , let me add my 2 cents. Talk to mortgage brokers & lawyers who can direct you to those needing to un load their homes.( Mortgage arears, divorce, mould, etc. ) If you wait till their listed with the real estate your paying more for the property. In addition to driving the neighbourhood looking for the right buy ,place an add stating " we buy ugly houses ". And remember, you gotta have fun doing it :>)



Doug

 

[MrHamilton]

[quote user=flyingsquirrel]Actaully, I am interested in Hamilton too.

Can you refer to me those realtors?


Feel free to give me a call if you're interested in investing Hamilton. Check out my blog as well as that is a good first step in researching the #2 city in Ontario. I just so happen to be in touch with a vendor right now who's in trouble with the bank.



thanks,

Erwin

 

[housingrental]

Based on your other posts I do not recommend you do this