The pros and cons of a fixer-upper

Looking for a bargain?

Why not buy a disgusting heap of a house that no one else wants and turn it into your dream home?

The Financial Post has an article about the pros and cons of buying a fixer-upper.

It’s a first-time homebuyer’s dream: Snag a rundown house in a terrific neighborhood, and then revamp it to your heart’s content.

But fair warning, that fixer-upper could become your worst nightmare.

“You have to really know what you’re getting into,” says Zillow.com real estate expert Brendon DeSimone. “It could be the case where it seems like a good price and then you dig deeper and find that the windows are off, the electrical foundation is messy, and so on.”

Translation: You could wind up spending more than you bargained for.

Read the full article here.

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Maverick
Guest
Maverick
4 years 24 days ago
Why not wait a couple of years and pay 30% less for that fixer-upper? Seems like a prudent strategy. Not to mention contractors would likely be more willing to provide you with a little extra bang for your buck at that stage of the market. Or with the money you save, you could buy that house off the poor saps who bought at the top and then proceeded to bankrupt themselves to install granite countertops and track lighting, all to just keep it near their cost price (unlikely). Maybe if you are generous, you can even allow the sellers to… Read more »
ScubaSteve
Member
ScubaSteve
4 years 24 days ago

Vancouver prices will be down 52.2% by November, 2017.

Yes. 52.2%. Not 52.3% or 52.1%.

I can be just as accurate as the BCREA.

patriotz
Member
4 years 24 days ago

Missing the forest for the trees. The article doesn’t even touch on the issue of whether the broad market is fairly valued. Almost all of the price swings in SFH are due to land value, which means you are not going to get a “deal” regardless of the condition of the building.

Proud and extremely rich Chinese home owners
Guest
Proud and extremely rich Chinese home owners
4 years 24 days ago

@ScubaSteve:

Wake up to take your Psychotic medicine now

asalvari1
Guest
asalvari1
4 years 24 days ago

Sorry but I find this article very misleading and dangerous..

When the fixer upper is 1.NN Millions, and you bought it, there is something else that needs fixing first – your head.

good-format
Guest
good-format
4 years 24 days ago

I just rented a very nice house for $1850.00 ( I guessed my landlord paid more than $700,000 for it).

The owner (the wife) seems to be ok. But the husband seems to be so rude when I met him (guessing he was so mad at his wife for purchasing the house).

space889
Member
space889
4 years 24 days ago

I think The Chronicles of Froogle Scott at VREAA and Mike Holmes show on HGTV should dissaude most average people from either attempting a fixer-upper themselves or buy one (before or after the fix) because there are just too many unknowns, potential problems, and cost overrun.

The quality of fixer uppers that are done for flips in my area has been steadily getting worse and worse since 2001. Seems like the higher the profit potential, the less incentive there is to take pride in one’s work.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
4 years 24 days ago

Guys! I heard the housing market is going to crash tomorrow! All those evil people who bought property and made tons and tons of money will finally be punished!

We will finally be able to buy a place of our own!

Anonymous
Guest
Anonymous
4 years 24 days ago

Guys! I heard the market is going to pop tomorrow! All those worthless bears who cried about the sky falling will never be able to buy in!

They’ll be paying other peoples mortgages forever!

boogeybear
Guest
boogeybear
4 years 23 days ago

That there are still people who think it’s still plausible to turn a profit on a fixer upper is incredible in itself.

UnagiDon
Guest
UnagiDon
4 years 23 days ago

“Property Always a Good Investment” Says President of National Association of Realtors in India

http://globaleconomicanalysis.blogspot.ca/2012/09/property-always-good-investment-says.html

Van
Guest
Van
4 years 23 days ago

Anonymous – Market already popped yesterday. I hear Realtors phones are ringing off the hooks. It’s the fall market baby. And either fall into a new mortgage or keep renting.

Van
Guest
Van
4 years 23 days ago

“I just rented a very nice house for $1850.00 ( I guessed my landlord paid more than $700,000 for it).”

I smell bullshit! Where in Vancouver can you get a house for $700,000?

Anonymous
Guest
Anonymous
4 years 23 days ago
Patiently Waiting
Member
Patiently Waiting
4 years 23 days ago

More international hand-wringing about Canada.

“Société Générale believes Canada still doesn’t have a handle on a frothy real estate market.

Senior foreign exchange strategist Sébastien Galy today cited the risks associated with a protracted period of low interest rates.”

http://www.theglobeandmail.com/report-on-business/top-business-stories/top-business-stories-housing-bubble-is-not-yet-under-control-socgen-warns-canada/article4519999/

VMD
Member
4 years 23 days ago
Aug REBGV report: http://www.rebgv.org/news-statistics/home-sellers-continue-outnumber-buyers-greater-vancouver%E2%80%99s-summer-housing-market The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,649 in August, a 30.7 per cent decline compared to the 2,378 sales in August 2011 and a 21.4 per cent decline compared to the 2,098 sales in July 2012. August sales were the second lowest total for the month in the region since 1998 and 39.2 per cent below the 10-year August sales average of 2,711. “Home sales this summer have been lower than we’ve seen for most of the past ten years, yet we… Read more »
Deliverator
Member
Deliverator
4 years 23 days ago

A fixer-upper in a great neighborhood can get where you want to be. Per DeSimone: “If you can spend $375,000 and put some $75,000 into it, now you’re in the neighborhood for $450,000 rather than $500,000.” It’s a great deal.

What neighborhood is this? Oh, right – it’s not in the GVRD.

gokou3
Guest
gokou3
4 years 23 days ago

This twin-building complex near Lougheed mall is a financial disaster. Below unit goes from $449k to $439k to now $407k listing. Unit is vacant per description, so apparently a naive investor who’s tired of renting at a negative cash flow is bailing.

http://webcache.googleusercontent.com/search?q=cache:sOtzk08Ta88J:www.6717000.com/mls/V956163-310-9868-cameron-st.html+&cd=1&hl=en&ct=clnk&gl=ca

http://webcache.googleusercontent.com/search?q=cache:5tg_7kpfEc4J:www.ecorealtyinc.ca/listing%3Fid%3D259550631+&cd=2&hl=en&ct=clnk&gl=ca

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=713205761&s=BRC&t=BRC

good-format
Guest
good-format
4 years 23 days ago

@Van:

I never said I rented the house in Vancouver city. But it is in Great Vancouver

/dev/null
Member
/dev/null
4 years 23 days ago

@VMD: Most shocking (for me) statistic in that release is in the footnote – there are 11,000 realtors in Vancouver/REBGV?! Wow.

VMD
Member
4 years 23 days ago
VMD
Member
4 years 23 days ago
Patiently Waiting
Member
Patiently Waiting
4 years 23 days ago

My internet sleuthing indicates The Key is not dead yet. Scam is trying to hire a team of realwhores to do something. Not sure what it is.

My main concern is whether he’s going to try to incite racial hatred again. I’ll be watching, you hear me Scam?

Bag it and tag it
Guest
Bag it and tag it
4 years 23 days ago

@VMD: ““Home sales this summer have been lower than we’ve seen for most of the past ten years, yet we continue to see relative stability when it comes to prices,” Eugen Klein, REBGV president said”

Prices dropped 1.1% from last month. This annualizes to 13%. That’s supposed to be stable?

gokou3
Guest
gokou3
4 years 23 days ago
Patiently Waiting
Member
Patiently Waiting
4 years 23 days ago

@gokou3: Yep, they’re also promoting it on their social media. So far, Scam himself isn’t saying anything publicly. Maybe they realize he’s tainted and will keep him out of the media. One can only hope.

asalvari1
Guest
asalvari1
4 years 23 days ago

re: stats

for all those people that believe in the misconception that expensive areas are not going to fail:

The winner is Vancouver west side, with index drop of -2.5% for one month and -5.9% for 3 months.

This bodes well with my thinking that:
– van west had a lot of speculation in the SFH.
– new rules are going to hit hardest the houses worth above 1M

asalvari1
Guest
asalvari1
4 years 23 days ago

@asalvari1:

funny, I did not looked the apartments numbers for long time. It appears that most of the prices are within the 10% of the 2009 bottom. The winner (again)is Burnaby east, at -11% 3years ago and -13.7% 5 years ago. I believe that this would put it BELOW 2009 lows.

then it hit me – It IS happening, now, just while we have this stupid tug-of-war bull/bear on daily basis.

crashcow
Member
4 years 23 days ago

you know when you’re in a bubble when meetup.com shows that Vancouver has over 20 groups on real estate “investing” and only 4 for all other asset classes combined.

YLTNboomerang
Member
4 years 23 days ago
@/dev/null: So take the “over” 11,000 used house salespeople combined with the $25B in transactions in 2011, assume a 30% decline in transactions for 2012 and assume a generous average commission of 4%…and you get average income of $64K in 2012. Now of course we know that there are a good number of high end salespeople working the “Wests” so pull a Rennie and take out the top 20% and your average is probably somewhere around $50K. Now take out the costs (brokerage fees, advertising, BMW lease etc.) and your average profit is what? Lets say at least sub $40K,… Read more »
b5baxter
Member
4 years 23 days ago

Here is 2012 September graph that compares the Vancouver decline with one US market – San Diego:
http://vancouverpeak.com/groups/data-hounds/forum/topic/crash-curve-graphs/?#post-2572

good-format
Guest
good-format
4 years 23 days ago
MLS® Home Price Index July 2012 Aug 2012 Chg(%) Annualized(%) Detached 950,200 942,100 0.86 10.32 Attached 468,700 462,300 1.38 16.61 Apartment 374,300 370,100 1.13 13.61
crashcow
Member
4 years 23 days ago
also: membership in the avg real estate groups is about 3x that of non-RE investing groups. Checkout this group for a good laugh: Name: “Cashflow Game Night for Real Estate Investors” Trolls, wouldn’t you rather be playing board games with other trolls instead of coming here to moan? Pitch: “We firmly believe that our lives should be under our own control. We don’t want to rely on an employer for whom we trade our valuable time in order to earn just enough money to pay our bills. We don’t want to have a bad day just because our boss is… Read more »
Chabar
Guest
Chabar
4 years 23 days ago

Is this fucking mentality and behavior that we are supposed to get accustom to due to changing times and multiculturalism so we don’t get called racist when pointing out HAM savagery?

http://www.dailymail.co.uk/news/article-2198246/Ling-Gu-death-Ferrari-crash-covered-Chinese-officials.html?ito=feeds-newsxml

Bag it and tag it
Guest
Bag it and tag it
4 years 23 days ago

@asalvari1: “then it hit me – It IS happening, now, just while we have this stupid tug-of-war bull/bear on daily basis”

If buy tug-of-war, you mean bulls posting stupid comments and bears laughing at them….then yeah, I suppose it’s a tug-of-war

paulb
Member
4 years 23 days ago
VMD
Member
4 years 23 days ago

words are out on MSM:

[Vancouver home sales plunge, posting second-worst August since 1998]
Garry Marr | Sep 5, 2012 2:38 PM ET
“Sales activity in the country’s most expensive housing market continues to tumble but the Real Estate Board of Greater Vancouver maintains prices are not being impacted.
… Home sales this summer have been lower than we’ve seen for most of the past 10 years”
http://business.financialpost.com/2012/09/05/vancouver-home-sales-plunge-posting-second-worst-august-since-1998/

Bag it and tag it
Guest
Bag it and tag it
4 years 23 days ago

@YLTNboomerang: It’s going to be ridiculous how many bankrupt Uses Houses Salespeople there will soon be. People most likely to rack up debt are people that are currently earning less than expected ‘today’, but expect things will turn around for them ‘tomorrow’…and we all know tomorrow ain’t going to come for them.

gokou3
Guest
gokou3
4 years 23 days ago

@crashcow: “you know when you’re in a bubble when meetup.com shows that Vancouver has over 20 groups on real estate “investing” and only 4 for all other asset classes combined.”

And at least one of the meetup groups is dismantling because the organizer bailed.

ScubaSteve
Member
ScubaSteve
4 years 23 days ago
Posted on the Vancouver Bubble thread at http://forums.redflagdeals.com/vancouver-bubble-road-50-housing-crash-w-monthly-stats-1194032/114/#post15316960 ————————- REBGV released the August stats today. Nothing positive in their press released at all, titled “Home sellers continue to outnumber buys in Great Vancouver’s summer housing market”. The REBGV reported that “August sales were the second lowest total for the month in the region since 1998 and 39.2 per cent below the 10-year August sales of 2,711”. And as predicted, for the first time the HPI composite benchmark fell 1.1% in 1 month and is down 0.5% YoY. According to the “HPI” prices from the real estate board, they claim that… Read more »
YLTNboomerang
Member
4 years 23 days ago
FFWD a few years and the Vancouver fixer-upper is not going to be a detached home, it is going to be buying two uselessly sized apartments and joining them up. Check out the layout and photo’s of this one: http://vancouver.en.craigslist.ca/van/apa/3251861399.html Forget the fact that this person is dreaming at $2100/month asking rent but look at the second bedroom that can barely fit a futon not to mention that the “flex” room is so small that they don’t even have a picture. I think the icing on the cake though is the fact that the kitchen looks like an afterthought slapped… Read more »
asalvari1
Guest
asalvari1
4 years 23 days ago

@Chabar:

uh, well. Give them a bit more time, like few years or so. They will disintegrate internally, the conflicts in that society are too big to sustain itself in current form for long.

In some way, I have “Been there, done that, have the t-shirt”.

s
Guest
s
4 years 23 days ago

I was sure they would have trumpeted the average price this month since it went up.

yvr2zrh
Member
4 years 23 days ago

Not that I like to toot my own horn but I did call it that we would have increase in avg. this month with decrease in HPI . . . . If we did not then this would just be voodoo economics.

Let’s see how Week 1 goes for Sep. Remember that the first couple of weeks is really the late August sales posting while the listings are real time post-labour day decisions.

Just about to go and do the data mining through the report to see how bad certain areas really are.

gokou3
Guest
gokou3
4 years 23 days ago

@YLTNboomerang: $300 move-in and $300 move-out fees? Seriously? Is that normal? The bby apt that i rent charges $100 each way.

Anonymous
Guest
Anonymous
4 years 23 days ago

@gokou3: That’s absurd, why would there be a fee to move in or out of a condo? I’ve never paid a fee beyond a deposit on a parking garage key or a damage deposit, what the hell would justify a ‘moving’ fee?

jesse
Member
4 years 23 days ago

How has September done compared to August? Here is the % change in sales from August to September since 1999:

-4% -2% -16% 0% 2% 15% -8% -16% -18% 2% 3% 1% -6% average -3.4% stdev 9.2%

Taking the max, min, average, and 1stdev we can take a stab at where sales will be, given August’s were 1649:

max 1,892
+1stdev 1,801
avg 1,590
-1stdev 1,497
min 1,353

wallnut grove
Guest
wallnut grove
4 years 23 days ago

“Vancouver’s Olympic Village ghost town or boom town”

http://www.vancouversun.com/videos/recommended/video.html?embedCode=dwazRzNTrj-EHTuLKpN7hfR4rurk03Ka

That’s who will be hurt by a housing collapse. Not some nameless ‘HAM’, but people who look and act just the way you do.

YLTNboomerang
Member
4 years 23 days ago

@gokou3: Yea, $300 is pretty high. Most places I’ve rented used to have a move in/out damage deposit however now that most have moved away from live-in building managers or concierges they have to pay someone to come and put up the elevator protection and inspect pre/post move. I can accept $75 or even $100 for this but $300???

Vote Down The Facts
Guest
Vote Down The Facts
4 years 23 days ago

@gokou3: “$300 move-in and $300 move-out fees? Seriously? Is that normal? The bby apt that i rent charges $100 each way.”

I believe many buildings are now starting to charge a move-in fee only, as it’s hard to track down those who choose not to pay the move-out fee.

But $300 each way sounds ridiculous.

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