Here is an example of how easy it is to entangle yourself in all the many elements of a renovation. These are all changes we’ve made to one of our current properties. No doubt the future buyer will be ecstatic about all of the lovely changes and updates we’ve made…but before you buy a fixer upper, ask yourself whether this is something you can handle on your own. If so, more power to ya! If not, why don’t you give us a call to see what already-renovated properties we might have available.

We added a sliding door at the back of the house where the windows used to be located, because we got rid of the original rear door. We got rid of the original rear door so we could put in a new shower for the new luxurious master bathroom in the new master suite, which we created from a large unusable existing room. The renovation of this room required raising up the floor level to match the rest of the house, which caused us to re-design the structural posts and piers supporting the floor joist system. We had to run the plumbing through this joist system and create an access to it from the crawl space, causing more structural issues to deal with before getting the framing inspection approval. Oh, and to make the master suite nice, we cut through the brick walls to add two windows in the bedroom and one in the bathroom to make the space light and airy for the new buyers.  And I’m not even going to get into the cost of all these changes…

Now do you have an appreciation for renovation cause and effect?

While the couple and I were talking about the renovations that would be needed to bring the property up to the neighborhood standards and regain value, the agent chimed in that it “wasn’t a big deal.” She said that if the owners–who were planning to live in the property during most of the renovation–couldn’t do the work themselves, they could “just hire someone.”

Yes, that’s true. If you can’t do the work yourself, hire someone else. But it is not that simple or easy. Do not discount the fact that your life will be in turmoil if you are living in the home during major renovation work. You have got to pay for this work and keep a close eye on the finances. If you know this and are still willing to take on that situation, you should factor in some equity for your trouble.

Knowing exactly what it would take to get that property back up to it’s full market value, the price I recommended paying was less than what the agent considered a good deal. Agents tell me I’m out of my mind. Well, call me crazy. But a sales agent gets in and gets out, and gets their commission, and never gets their hands dirty. In my world, they bring no substantial value to the deal of cleaning up the foreclosure mess we are in.

It’s we the buyers who are stabilizing the market, cleaning up the glut of vacant, rundown houses and recovering neighborhood home values. Oh and by the way, they dropped the price of this home last week. And it’s still too high a price for the amount of work to bring it up to a reasonable neighborhood standard. Stay tuned…

These guys — one working in Virginia, and the other in Maryland — both got excited about the “win-win” of our business model. They both highly recommended that people interested in getting a great deal on a foreclosure look into our service instead of going it alone.

It just works. For the banks, for you the homeowner, and for us. Here’s how:

We take on all of the risks of overhauling these troubled properties, and get them off the bank’s dead-weight foreclosure list. And you still get a great deal, though a realistic one. You still pay less than market value, but you don’t have to take on any of the risks or hassle of making the place liveable.

It’s a tough market out there, but there are still great deals to be had if you’ve got your priorities straight and can ignore the hype.

Well, over the past year I realized that not everyone has had the good fortune of cleaning up really nasty properties and transforming them into vibrant, nice homes for a new owner/family. What really opened my eyes was the experience of working with the buyer of one of my investment properties.

Let’s call her Jan: a single woman in her early thirties who was going through a lot of life changes at the time we met. After selling her beautiful home to move on to a new life, a few things happened that drastically changed her plans. One major plan was to find another home to live in. She had temporarily moved in with her parents after these unfortunate incidents occurred, but we all know how difficult that would be after being on our own for a while.

So with the market for foreclosures growing in the area where she wanted to live, the family went seeking a good bank-owned foreclosure deal. My, how did their eyes open and frustration grow with this process. Many of us know the difficulty of shopping for a big ticket item like a car, selecting a college, engagement ring, a house to rent or own, etc. According to Jan, finding a deal on a bank-owned foreclosure home was definitely not as easy as she expected it to be, even with the large number of foreclosures around today.

She and her family were dragged around by real estate agents from one junky house to the next. Many of the houses were good prices, but they could barely get through the front door without encountering the smell of animals or the presence of major mold. The damage found at the houses they saw ranged from significant to major: kitchens were old and in many cases, nasty; the cabinets were worn out, falling apart, and greasy to the point that not even a professional cleaning would make a difference; appliances were old and beat up, or not working at all.

All the “great foreclosure deals” they saw seemed to get worse and worse: bathrooms were falling apart; heating systems weren’t maintained; windows were broken, old or damaged; light fixtures were broken or missing; mold was rampant. Each time, they heard the usual story from the real estate agents: “It will only take a few thousand dollars to fix the place up.

Check back this Friday for Part 2 of Jan’s buying a foreclosure story.