Good thoughts all around. I wish I had that crystal ball to to tell you to move forward in full force.
You would need to be able to purcahse that fixer upper at a great price, fix it up and be able to hold it for a while with your cash reserve in case you can NOT find that tenant. If all of that can be accomplished.. then you need to speak wiht a local aggent that can help you with your due diligence, find that house.. and make it work.
What does your gut tell you about the area, location and such? I personally think a year fomr now we will be in the upswing or at least better.... as the market is pickig up now.
Continue your due diligence.
Orange Key Realty
The market year-to-date has improved drastically compared to last year. Sales in Sussex County are up over 40% compared to last year. Prices remain low, but at least they have stabilized, and in some cases are increasing slightly. Three of the four last listings I've gotten under contract had multiple offers. All indications are that prices will be the same or slightly higher a year from now. I would assume that prices will be the same in a year. There is a lack of non-distressed, appropriately prices homes for sale for buyers who are looking for a "move-in ready" home that they can close on relatively quickly. If you could make a profit on fixing up and selling a house, without counting on prices increasing- now is an excellent time. The rental market for homes is extremely tight right now, and rental prices are increasing. It would be an excellent time to purchase a home, fix it up and rent out for a few years until price appreciate more significantly.
If you have any additional questions or would like me to send you some homes that are currently on the market, please feel free to call me anytime at (973) 903-2862 or e-mail firstname.lastname@example.org
Then...to add my additional two cents.
Lakefront and (good) lakeviews always have intrinsically done better in the market fluctuations. You must also factor in school systems and commutability.
The pundits (those that crunch the facts/numbers for a living), and take into consideration that NO ONE HAS THE MAGIC CRYSTAL BALL OF KNOWLEDGE, are stating that the market will not improve significantly (price wise) until almost 2016/17. Take for example the Otteau Report, the go-to appraisal expert used by the State of NJ and the expert the NYTimes, Star Ledger & Daily Record calls for....anything relating to RE in all of NJ. I've been going to his seminars for 5 years, and he's called every shot virtually on the money, including the forecast that prices would fall to 2003 prices by 2012...which they definitely have. He stated at the October seminar that activity will pick up this year due to pent up demand by first time home buyers, low interest rates and the abundance of inventory caused by the release of the foreclosure homes and short sales. Good news....demand is up. Not so good news...prices won't be for a while.
It's like betting on the horses...it's a gamble no matter how you look at it. But buying on spec always is. As Joan said before me, plan on it costing more than you thought to fix, twice as long as you think to sell and get yourself a professional to help you along the way.
The USA was built on pepole willing to take risks. Do you have deep enough pockets and the perserverance needed to get the job done? I wish you all the best in your efforts. If you're looking for a RE professional to counsel you in your journey,, contact me at 973-715-4182.
Best wishes always!
If you are counting on the house values, especially in NW Jersey, appreciating in a year, I would say that is a bad bet. It may even be possible that values will decline further. This is still a big unknown and there is nothing right now to indicate that this year, especially being an election year, will see a significant rise in house values.
However, if you can buy a house considerably below market value, do all or most of the work yourself, and are diligent about costs and realistic about what to expect for resale (including the significant costs associated with selling) its possible you may do ok. The rental market is pretty strong and rents are high, often higher than mortgages in our area. Its possible you could rent the property out until the market gets better (which could be years). It may not be the way you want to go (being a landlord is quite a committment) but its an option to consider.