The fix-and-sell investment strategy is as popular as ever thanks to exposure on cable television—both as TV series and late-night advertorials. St. Louis fixer-upper properties offer first-timers a straightforward way to test the real estate investment waters. The simplicity of the strategy is appealing—but as presented in 30-minute chunks, a bit over-simplified.
Last week, Forbes magazine posted a relevant commentary aimed at informing new real estate investors of some basic stages common to just about every St. Louis fixer-upper project. It amounts to a 5-part master checklist for fixer-upper project management:
- Inspecting. Spotting and detailing problems is the first order of business. Forbes gives a rundown of the major areas of concern—but a more detailed listing is available by reading any professional inspection report.
- Recruiting. Whether you engage a contractor to oversee the rehab or decide to hire the sub-contractors yourself, locating reliable St. Louis personnel is key.
- Scoping. Formulating a detailed SOW (Scope of Work) comes next. It should detail the objectives (and limits) of fixer-upper activity—important ingredients for assuring the precision of bid proposals.
- Bureaucracy wrangling. Obtaining building permits, insurance indemnification, and keeping ahead of all the varied governmental and legal paperwork prevents fines and penalties (or the worst case: having to tear down renovations already proceeding).
- Management. Whether you are relying on a contractor or doing the work yourself, keeping tabs on the progress of the St. Louis fixer-upper needs to be a continual, hands-on activity.
First-timers can’t be expected to anticipate every potential time-consuming setback that fix-and-sell projects sometimes encounter, but with mortgage interest rates near historic lows, the expense associated with the time factor is less of a profit-killer. That makes today’s market an unusually inviting one for first-timers ready to wade into the opportunity. For a look at some of today’s intriguing St. Louis fixer-upper candidates, give me a call! 636.329.4100