Re: Any ideas for a guy buying fixer-upper house t

Posted by Hal/WA on September 01, 2004 at 22:00:28 from (148.78.243.26):

In Reply to: Any ideas for a guy buying fixer-upper house to re posted by Bryan on September 01, 2004 at 09:31:56:

My uncle made a fairly large fortune by buying older houses, mostly in his neighborhood in Spokane, and converting them into rental units. He watched for houses that looked like no one was taking care of them, but was very careful about what he bought and how much he paid for the houses. He looked for houses that had good foundations, mostly good structure and which had not had extensive roof leaks. He was very handy with plumbing and was a licensed electrician. He also did a good job on drywall and finishing. Although he worked on a job full time, he managed to fix up a house every year or so. He often converted larger houses into multiple rental units. His rentals were not fancy, but were affordable and clean. It also helped that his neighborhood was just off the Gonzaga University campus.

One of the houses he bought in the early 70's had been abandoned for awhile. Windows were broken out and no heat was on during some very cold weather. When the previous owner realized the problem, there was about a foot of water in the (luckily unfinished) basement from some broken pipes. My uncle found out about the disaster and contacted the owner, who ended up selling the house to my uncle for only a couple thousand dollars. My uncle got the water turned off, drained the basement, replaced the furnace and broken windows. He had to fix some things after he got it dried out, but spent a total of less than $10k for a house that he could have easily sold for $50K to $60K the next summer. That house would sell for at least $140K today. But my uncle didn't sell it. Instead,he rented it to the same family for over 20 years, giving them a good deal. The family ended up buying the house when my uncle retired, but had always taken great care of it and treating it like they owned it.

My uncle had very little trouble with tenants. He especially liked law students. I think he had about 20 houses at his peak and something like 50 rental units. They all were from houses he bought and fixed up. He also enjoyed his business and working on the houses and fixing little problems in the rentals.

Location, location, location. And buying smart and being able to do most of the work yourself CAN result in good profits. My uncle retired as a millionaire.

I wish his later investments had worked out anywhere nearly as well as his houses did. He lost big with Enron.....

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