For the last couple of months we have been taking the temperature of the Real Estate market in this email. It’s hot, it’s cold. Blah blah blah. Given the average to below average feedback and engagement on this topic it seems like old news or news everyone is getting elsewhere. So let’s talk about something else. How to get a DEAL and make some EQUITY (MONEY) quickly in this market.
There are an infinite amount of ways to build equity in a hurry in this market. This one though is easily accessible for most people financially AND helps combat HGTV syndrome. Where we all watch a show for 30 minutes or an hour and look at an impeccably appointed home. This has reset most buyers expectations of what you can get for your money. Many buyers end up disappointed because sellers of anything decent want “full price” and few of those properties are as well done as on TV.
The houses that are as well done as they are on HGTV are going for MAXIMUM value. You can buy one of them, but understand you will have to overpay and outbid a bunch of other eager buyers, all qualified to get that place. It’s OK to do that, but it’s hard, pricey and those homes are moving in a hurry.
The solution lies in an old real estate strategy, combined with a mortgage solution that can help you get the “worst” house on the market, do some fix ups, finane them into the mortgage and grow your property value immediately over the first few months you own it. This can help you increase the value while getting a partner in the repair process who understands how contractors work and is just as motivated as you to ensure the work is on time, and on budget and of high quality.
The solution is a renovation loan. We are working on a great example currently. A client of ours was shopping for homes in the $250K area in Berwyn/Cicero. However, she lost two bids on places between $240 and $260K in January and February. She turned her attention to cheaper homes. Found one for $184K that needs a fair amount of work. It’s on the same block as one of the two she lost out on six weeks ago. Got it under contract, for $184 but found a bit more work was necessary through the home inspection that helped bring the price down to $178K. Now she is financing $35K into repairs as well. Total investment will be $213,000 after the repairs. The home will be as “up to speed” as the other one, for $40K less.
The conservative “future value appraisal” done with one eye on the work expects this house to be worth $229K when done. An increase of $16K. With the required down payment being just $7500 or so. The return on this clients cash invested is 113% over the next 3-6 months. And if the house ends up being worth the $240K the other one on the block she missed out on is worth? That return jumps to over 250%. THAT, is how you make money in this market!
To learn more about this program and see if we may be able to use it to help you find the right home, call me at 630-708-7088 or email dylan.kramer@benchmark.us
