I am a recent college graduate, 22 years old, and with a steady job at an infamous non-profit making 25k/ year. Ideal? Not bad.
I moved to a small rural southern town with cheap housing costs. ( 1 Br. Apartments around $350) I didn’t want to rent thou h because I have a dog, a motorcycle, and I like working on my own vehicles, etc. So I decided to buy and I stumbled on a foreclosed home.
The house had a roof that should have been redone 10 years ago. The carpet was black with grime. The kitchen was so greasy that setting down a notebook meant you would be walking away with someone’s dinner. The bathroom was outdated and in shambles. The garage door and back door were rotting. Getting the picture? But… it was structurally sound, in a quiet neighborhood, and a 3bedroom, 1.5 bath, with a garage. 1050 sq ft. A perfect starter home!
Now I worked for a carpenter for all the years I was in college so I have a slight advantage. I have been working on the house nights and weekends for the past 6 months and I am getting close to completion. The return on my investment will probably be about 150% of the total cost. Is it a flip… maybe. But let me tell you why this simple starter home is good for me and the community.
First of all it is good for the buyer for obvious reasons. Instant equity, profit, a place to live, etc. However doing something of this nature also teaches valuable skills for any homeowner. I kinda know what I am doing, but with home improvement stores offering classes, most anyone can learn how to do simple plumbing, electric, and finish work. Sometimes just a coat of paint goes a long way!
Secondly, it is good for the community. My roof is done, the front yard has been cleaned up. The garage door has been replaced. My neighbors love me! The house is no longer an eye sore, but it brings the property value in the neighborhood up. Sure I had a mess for awhile, but now everyone is in love. I have people stopping by asking if the home is for rent or sale. They have seen me working and know how much hard work has gone into it.
Not only is it good for my neighborhood, but it helps my community. Instead of more land being used for new home construction I have taken an existing home and made it close to brand new. This means more land can be used for parks, or donated to non-profits, etc.
Now for a caution. It is nothing like those shows on television. I lived on sub floor for 6 months. Only my kitchen sink worked for 2 months. I have stayed up until midnight some nights working on it. IT IS NOT EASY! If I followed the model of those shows I would have carpenter’s do my work. But I would miss all the profit from the sweat hours I have put in. I would be betting on a sale for financial stability. Instead I pay the same amount as I would for rent and I am building a home. If you want to do this and make money, make it a long term project! A short term flip is NOT a good idea in the current market. But, a long term investment will payoff at the time of sale.