If you’re a first time buyer you’ve definitely come across the dazzling flips reputable developers have been cranking out all over NELA, specifically Highland Park. The top tier lookers sell for an average of 10% over asking, sometimes more. So why not pick up a fixer and do it yourself?
It’s the great debate and I get it all the time from buyers wondering if it’s an avenue they should explore. Before you hitch your wagon to this star, you really need to consider a few things like…
– Quality of life: Do you really have the time, energy, patience and discipline to take on a project that could last years if you have a hectic work schedule, family or other time consuming obligations?
– Vision: Do you have a handy, crafty, creative side or would you have to incur additional costs by hiring an architect or designer?
– Experience: Do you have access to dependable vendors, handymen or skilled labor and know the going rates for different projects so you don’t get taken advantage of?
The fact of the matter is that there’s no right answer. Developers get awesome pricing from contractors because of the number of projects they have with their developer client. It’s pricing that regular buyers typically don’t get.
That said, when you buy a dazzling flip, you’re paying anywhere from a 20-50% markup for that open floor plan and sparkly finishes just it’s already been done for you. What matters most is determining what’s realistic and fits your lifestyle. If that means a house where you only need to bring your toothbrush, dogs and wardrobe, a turnkey house is the answer.
But, there’s also a gray area. If a client is open to a fixer I always recommend getting the in-between house. This is a house with good bones (structurally sound) and not totally trashed that you have to take it down to the studs. It may have a dated kitchen and baths, but is totally liveable in it’s current state.
In general, these in-betweeners aren’t all that appealing to most developer because there isn’t a good enough margin based on the asking price – typically just a smidge below market value or comparable homes that are more spiffed up.
Case in point is the fixer on Fayette in Highland Park. It’s not trashed and not turnkey, but definitely liveable and the listing price at $565k reflects that. If it was listed at $499k it would have been picked up by a flipper yesterday. At $565k, it just isn’t as profitable–and that’s a great thing if you’re a regular buyer with time, energy and vision. If you are one of them, then it’s a no-brainer. The fixer is the right choice for you.
Still need more help and guidance? Let me know!.