The fixer upper seems to be the fix-all for many real estate investors. Fixer uppers are the most sought after of real estate purchases, but they sometimes turn into a headache rather than an equity building vehicle.
Ive done well doing fixers,said Matt Stansfield, who just completed his nineteenth fixer. But I havent made money on all of them. Anybody who thinks theyre going to make a fortune on fixers and doesnt have the know-how may be mistaken.
Stansfield has more than an average understanding of how the fixer-upper game is played. Hes done more fixers than most people will ever challenge, and hes bought and sold homes from coast to coast in this wanbee game of fixers in California, Florida, Oregon and New York.
Stansfield has netted $1.34 million in the fixer upper market, which designates him as a fixer upper expert. If you want to find the right property to make money on, he said, you better get ready to look high and low for them for a long time. Most of the real deals out there get bought up quickly.
At 48 years of age and doing fixers for 18 years Stansfield is slowing down his hunt for the fixer upper. He worked for a large corporation right out of college, but as he says, couldnt stand the grind or drudgery. The day to day odyssey of going to the office and keeping on the good side of his bosses wore on him and this self-professed independent man left the corporate world after just two years for good.
I had to make my living my way, he says. And now I suppose I can say I have. But learning the ins and outs of doing rehabs on homes in four states has taught Stansfield more about the real estate business than he could imagine.
The fixer upper may be one way to making a fortune in real estate, but it isnt without its pitfalls. Stansfield lost nearly $18,000 on his first two fixers, which would have knocked many people out of the game, but then Stansfield decided he needed a game plan before tackling his third. I just said we have to have a budget and stick to it.
The cosmetic fixer was his next avenue, and with just carpet, paint, kitchen counters and vinyl Stansfield found the right house to net a $28,000 profit. He was off and running. It was like hitting the lottery after two losers, he said. We only owned the house for three weeks and sold it. Everything worked like clock work.
Everything hasnt been the proverbial peaches and cream for Stansfield. Hes fought for zoning changes, found himself on the outs with lenders, on the brink of foreclosure twice, learned about IRS redemption periods on homes hes purchased at auction and a merried of other aspects of real estate. He says its been a battle at times, but he seems to have won at what he calls a game of sorts.
Partnering with hard working dependable contractors and good real estate agents have been key to his success. Stansfield has worked with the same contractor in most of his homes that have needed extensive repairs.
Finding good real estate agents in each area has been another matter. Hes found agents who would both sell and list his real estate. Working with real estate agents who just do one or the other never worked for me, he said. So I decided long ago to work with agents who did both. Its worked for me, but everybody seems to have a different game plan when it comes to marketing property.
While Stansfield has found great success in the fixer upper market, Don Ryerson has experienced a deadening end to his dreams of a wealthy retirement in Greenwich, Connecticut. After 23 years doing fixers he purchased a home for slightly more than $2-million, which needed extensive work. As a suburb of New York City, Greenwich has one of the most expensive housing markets in the nation.
But it took Ryerson more than seven months to finish the needed repairs, including a partial foundation failure and it took another eight months to finally get the home sold for what amounted to a net loss of $310,000.
While he still has a little more than $400,000 Ryerson is hanging up thoughts of conquering another fixer upper. Hed done more than two dozen fixers over the years. The real estate market was booming, he said. Now things are changing with the interest rates going up so many times and I think its time to get off this merry-go-round.
After a national real estate boom which has lasted more than five years in some places, real estate markets throughout many parts of the nation are changing. But there are some local real estate markets that are still very active, even some that are still hot. |
