The housing market is and has been quite strong, making it tougher to find good deals. The way to get the best deal is definitely looking off market. Recently I was thinking if it would make sense to find listed properties that need less work (specifically in the kitchen/bathrooms) and not necessarily meant for investors. Aside from cosmetic work, most of the rehab money would go straight to the kitchen and bathroom since those can boost value. Could this work? Purchasing a property at around 6-10% discount and then adding most value to the kitchen/bath. I would assume that it could be very much up to the person doing the appraisal? What do you think?
No it won’t work because it will cost you at least 10% in commissions and closing costs to resell. How will you recoup you kitchen and bath repairs and holdings costs. You would still have to get these properties at a discount but it would have to be more than 10%.
@Craig Jeppesen completely correct, the margins would probably be extremely slim if not non existent.
You need at least 25-30% margin. There are deals on MLS. Look for vacant properties that have been on the market at least 60 days longer than average days on market, had a price reduction or two and make an offer where it works for you. You need to make a lot of these offers but you will get a deal this way.
If you have a good agent they can make verbal offers for you on properties like this or if you have a license you can do it yourself.
Bottom line is you need to market consistently and make a lot of offers these days to get a deal but the deals are still out there.