Remodelling homes for a living

L

ldogg53

500+ Posts
so as I'm remodelling a house for myself to live in, I've come to realize that I've got some good contractors and I also have the ability to get builder's prices on many items at a local distributor...

I figure there are plenty of opportunities to purchase homes in the Houston area from the 50s-60s that need some TLC and turn them for quite decent profits... my house alone will be worth about $80k more than it cost me when I'm done..

at any rate... is this something I should approach with a realtor to help me in selling them... and if I'm doing multiples, should I negotiate for the realtor to handle my purchases for free??

I plan on paying cash for the homes, so I won't have to get any loans which is nice... but I'm thinking of striking a deal with a mortgage guy.. referring buyers to him for a small fee or something...

what issues do I need to look out for?? has anyone done this before?
 
Do you plan on employing an architect or some other qualified professional to help you in this endeavor? If not, you're setting yourself for plenty of lawsuits in the future. One tidbit of information, if you are the 'designer' on a residence, you are liable for that residence until you die, but an architect is only liable for 10 years. Something to think about. You'd hate to get sued when you're 75 for a house that you built 40 years earlier and it really has nothing to do with you.
 
LF68..

I'm not talking about doing anything major with regards to structural changes... I mean remodeling kitchens/baths.. updating light fixtures... minor landscaping... new doors/hardware.... replacing flooring...etc... these types of things are yielding huge price differences in certain areas...

also.. if there is anything that needs to be done for plans/drawings then I can do that myself... I have basic knowledge on how to draw things and I have all the instructions from the City... as anything of that magnitude would be a permitted job, then the City would have to approve my plans before I can start... I would think that hiring an architect to draw plans would only protect you as much as having the city review them for approval... I'm quite familiar with the permitting process now from doing my own home.. what a PITA!
 
Liable until you die? I don't think that is a correct statement of law. While architects do enjoy a statute of repose, the statute of limitations knocks most things out within two years.

In any event, people who buy homes now pretty much have no rights to complain about anything with regard to the construction.

You don't have enough exposure to worry about.
 
ACtually, in terms of liability for the design of a building, I was told by my architectural law professor that you are liable for 10 years as an architect, but for your entire life if you are not. If you can find where I'm wrong, I'd be interested to know.
 
Guapo...

will do... does he do it in Houston, Dallas or Austin? I don't want to overstep any bounds if he might be a competitor...


also... do any of you know how to go about buying foreclosed homes? I know that they go on auction at the courthouse, but when and where do you get a list of the properties to be sold?
 
ldogg, call the Travis Count Tax Assesor Collector's ofice and they can tell you when the list is published. You can usually go up there and pick up the packet.
 
LF68...

I guess the same holds true for Houston (Harris County)... I'll give old Paul Bettencourt a jingle!
 
Report back when you sell your house for that $80k profit. I've heard lots of folks in Houston boast about the profits they planned to reap when selling their recently purchased/remodeled homes. They all seem to get a quick dose of reality when they actually put their home on the market.

Bernard
 
Bernard...
seeing as the house directly across from my driveway is sale pending at $70k more than my house will cost and it isn't quite AS remodeled as mine is, I think I have a fair grasp for this area... realistically I'd like to turn a $20-30k profit per house I remodel..
 
Is your house worth more just because you remodeled it or has the property value increased signnificantly lately?

In some neighborhoods, developers only want to tear down houses and rebuild. To them, the value of the improvements isn't that relevant.

Not saying you're wrong, just that you need to keep that in mind.
 
I would think that 20 - 30K profit may be most realistic. If all the houses in an area are selling cheap per foot, then making one of those the pearl will not add that much value because who wants to pay a lot more over square foot market value in a crappy area. Bellaire and other revitalizing places like that are a complete different story though. Land is the value there. But people will pay a lot for a nice remodel. Foreclosures are where the money is since you can get the house well below market value. But trying to sell a house for $30 more per square foot than all the other houses in the area seems to be a stretch. I think you business idea is a great one though and a lot of money can be made, but 80K profit would be the exception to the rule in my opinion.
 
Tripdaddy, you put it perfectly. I have a client who recently built a house way too nice for the area of town he built it in because he could get a lot cheaper there. Now nobody who can afford to pay him what he wants for the house would live in the neighborhood he is selling it. I drove by and the house just looks out of place. Eventually he had to sell the house he was living in and move into the one he built.
 
some good thoughts from you guys on this...

specifically my neighborhood is filled with older people.. retiring/dying... younger couples are moving in like crazy.... add to that the fact that it is one of the few remaining traditional neighborhoods inside the loop and it is ripe with opportunity...

many of these houses are in their original 1950s condition... they are mostly all well taken care of, but many are severly dated inside... the value is huge to a young couple looking for nice housing inside the loop with a yard, parks nearby, jogging trails etc... so the old people are moving out to retirement homes (or dying) and most people do not want to put forth the effort to make these houses more suitable by modern standards... but over the years many of these houses have been remodeled and as they come up on the market they sell nearly immediately with prices ever increasing.... there are a few new homes here and there in the neighborhood, but not many as most of the original homes are very well taken care of considering the age of the subdivision.... in fact, the newer homes are having a harder time selling as they are asking very big $$$$ and wind up with smaller yards due to building larger homes...
 
ldogg - foreclosure sales typically take place on the first tuesday of the month on the courthouse steps, at least here in Travis County they do. i would expect something similar in Harris County. many counties keep a list of the upcoming parcels/homes on their website, so you might try doing some searching on the web. just be careful to keep to the actually county websites, as most of those other sites are probably either trying to sell you something or get your business as a buyer.

i have a couple clients that i've worked with (i'm a realtor/real estate broker in austin) that have tried the courthouse steps deal but just found there was just too much competition which made any sort of 'deal' pretty rare in the end. what we basically do now is just monitor the fcls that have come up in the mls. if you want some ideas on that email me, i don't want to ramble on too long on here - there are just certain ways to go about it so you don't spend too much time chasing deals and properties that aren't going to happen.

also, as far as the commission - at least from my perspective - it's really going to be a function on saleability (is the price competitive where the property will sell within a reasonable marketing time), value (i'm not likely to talk about any commission reduction if the sales price is in a lower range), and quantity (how many properties are you planning on turning over). in the end the agent the you hire to work with you will be thinking over these things as it relates to the expertise & knowledge, time and money they have to lay out in order to generate a sale for the home.
 
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