Homeowner · Austin, TX · Member since 2010 · 12 posts · 2 votes
The suburbs around Austin are flooded with cookie cutter tract houses. What are your experiences, good or bad, rehabbing homes in areas like this? It seems at any given time you can find 2-3 houses with the exact same floorplan, lot size, features, etc. on the market.
It seems like the increased competition after your repairs can make these properties less of a deal (in general) than others with the potential for greater DOM/holding costs.
Do you tend to stay away from areas like these? Or is the trick to find a certain level of finish out quality that sets your properties apart from the ones next door, without overdoing it for the area?
I have sold properties in such areas in the Phoenix metro. I actually like such areas because it is easier to comp the properties due to plenty of very similar homes having been sold recently.
There is no particular secret to selling in such areas. Make sure other homes are selling within a reasonable DOM and then try to buy for a low enough price that you will have a decent margin when you try to sell it for whatever price you have comped it for.
Many tract home neighborhoods have a lot of SS and REO that could affect the appraisal, so try to comp the property considering the potential for a lower appraisal than you would like.
I have sold properties in such areas in the Phoenix metro. I actually like such areas because it is easier to comp the properties due to plenty of very similar homes having been sold recently.
There is no particular secret to selling in such areas. Make sure other homes are selling within a reasonable DOM and then try to buy for a low enough price that you will have a decent margin when you try to sell it for whatever price you have comped it for.
Many tract home neighborhoods have a lot of SS and REO that could affect the appraisal, so try to comp the property considering the potential for a lower appraisal than you would like.
Hi, good points above, the 50s ranch is gaining popularity. Tract properties of the 50s and 60s now have mature landscaping, most can be retro-fitted for energy updates easily and lot sizes are sufficient. Something people that want to scale down are attracted toward.
Color makes a big difference in these properties. I'm not bad at selecting and blending colors and coordinating designs, it's a fun thing to do, but I have seen some professionally updated ranch homes that really had the wow factor by using color and simple design features that made sence with the style of the home. For example, there is not much you can do with an 8' ceiling, you'd think. I saw one larger den that used an off white or sand color on the ceiling with darker brown walls and they had put up false beams and antiqued them. Walls were lightly textured as stucco. Now this was an old design feature from years ago, but with different color. The place was staged with furnishings that set off and complimented these designs features. The kitchen was updated in granite and new appliances and new tile floors. The original hardwood was refinished and the floors poped. Another big difference was lighting and fixtures that matched the decor and theme of the property.
There was a similar size home about three doors away, bland neutral colors, carpeting and pretty standard stuff, nice appliances, but nothing really remarkable. It was furnished with the seller's stuff in a french provencial with some dated wall paper.
They were close in price, the first described home is sold and the other is dropping the price after months of marketing. Still available and over priced based on what they see as a comp that sold.
To me, a ranch style home is either a contemorary or it's a masucline home, ranchy, like the home on the range. IMO.
IMO, You just can't try to match an interior style that contradicts the style of the home....traditional should be triditional, a ranch should be "ranchy" and contemorary done in a more modern design. You can blend styles, but I can't and make it look like anything, as to furnishings, but not as to color and textures of the home itself, IMO. Oh well, I could go on, but won't...but design makes a big difference in the price you will get, I've sold homes that were designed to sell (no pun intended with that TV show, which isn't that great by the way) and that got bland paint jobs. The extra effort paid off. Good luck, Bill
So, if you're not real good at interior design, a professional can probably consult for a couple hours and their fee will probably be well worth it!
That's what I have done when the properties get in a higher than mid-range price. Good luck. Bill
I was talking more about houses that were built in the late 90's & early 2000s. Way more of those than 50's ranch homes around here.
LOL! Well, most of what I was explaining still applies regardless, but "tract housing" was the development push beginning in the 40s after the big one, and in the 50s and 60s was the main thrust of home expansion. They wer similar in floor plan, identical in fact with a mirror image accross the street, a perhaps 3 floor plans in a development with different front elevations, but some didn't bother to mix it up very much.
In the 90s and beyound, I would think a developer would build in that manner, I have not seen it, they may have the same floor plans, but they are reversed with different elevations and even different roof styles to mix up the area.
Try curb appeal, color/design and higher end features that will not over price you in the market. Sorry for the assumption...good luck, Bill
Craig, they are very very hard to get at good discounts. You need to cut costs everywhere which comes with time. You'll soon find the cheapest tile, cheapest painters, cheapest appliances, etc. I know rehabbers who buy all in bulk and then store their stuff in warehouses. It is not easy but over time you will become proficient in it. Profit margins of 10% or lower are fairly common in my area. Flipping lipstick rehabs is in the volume you do, you should be turning them every 60-90 days max. Look at are your annualized return as a key factor.
Study your market and determine if the best deals are REO, Shorts, or Auction props. Then go with the best margins. Good luck.
Hi again, looks like Justin and I have contradicting advice, but really not, Justin is right as well. You really need to know your market. I'm thinking you're in a mid-upper income 10 year old house and you're finding the dog on the street. Justin is correct if the property just needs lipstick and appliances, where it's not far from being par in the neighborhood. As you mentioned, people living in it as is.
Getting a property to really stand out from the rest will take more thought and money. Justin makes a great point at buying in bulk. I did very well at Lowes and a locally owned lumber yard. I had the opportunity to do some developing wearing one hat with a non-profit and got to use that as leverage in purchasing for my personal properties. Tell them you are planning on doing X houses a year, that might help in cutting deals. I still look at the call/returns out of habit. Check in your area to for a habitat for humanity re-store, stuff is donated to habitat and they sell it to raise funds. Last fall I got a double oven, a $1,800 appliance, brand new still wraped for $400 I think. Very cheap compared to the new price! Your garage should be full of stuff purchased on sale, you'll probably need to build a storage building in your back yard! LOL Good luck, Bill