Market Conditions in Methuen>Question Details

Cat, Home Buyer in northeastern ma

is it possible to buy and sell a modest home (needing roughly 10k work) within two years in Methuen? For profi

Asked by Cat, northeastern ma Sat Mar 1, 2008

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Chris Lefebvre’s answer
It is possible to sell any home in any location for a profit if you buy it at the right price. As is true with any investment, you need to understand the market conditions and value of the home today, conservative estimates for repair costs, holding costs such as mortgage payments, utilities, general maintenance, etc., and also the cost to sell. It is impossible for anyone to accurately predict the future of the market so the more conservative you are with your estimates and the more cushion you give yourself, the better chances you have of profiting when you sell. Working with a local real estate professional can help you determine the market value of a home today before you buy. Good luck with your investment and feel free to contact me if you would like any advice on a specific home.
Web Reference: http://teamlefebvre.net
0 votes Thank Flag Link Thu Mar 31, 2011
It sounds like you might be an investor, and, if so, this is definitely a market for someone like yourself. However, I would be interested to know where that $10k would go - roof, siding, landscaping vs new kitchen, new baths, hardwood floors. Also, are you in a strong 'rental' neighborhood, and is that an option if you find that you need to carry the house for a period of time. Though, the short answer might be 'no', I don't believe that there is anyone who can answer your question with certainty.
0 votes Thank Flag Link Tue Mar 4, 2008
I just had a closing in Methuen last Friday and I will say having been through the inventory that there are some very good values. As to whether or not you will see a profit in two years, I honestly wouldn't feel comfortable making that claim. Remember that your profit will be what you get after your purchase price plus two years of interest, taxes and fix- up costs. A lot depends on how you are financing and how much you are willing to put in. I don't quite get if you are trying to flip a property or if you are looking for a short term living situation but two years is too long to hold a flip and not long enough to build equity. If you are trying to flip use the link below. This site has some great tools to use to help you determine if a property is worth flipping or not
Web Reference: http://www.fliothebook.com
0 votes Thank Flag Link Mon Mar 3, 2008
It's kind if like asking if you can make money in the stock market if you bought a stock and held it for 2 years - one would hope, but then you never can tell. Real estate should be a long term investment. Flips are best made in an appreciating market, not that 2 years is necessarily a flip but... anyway I wrote a post on my blog about the math on a flip in a market like this - I've added the link below for your reading pleasure.
0 votes Thank Flag Link Sun Mar 2, 2008
Cat,

It's possible, but there are so many variables that it is impossible to give you a definate answer. I will give you a couple of hints, though.

1. Buy low. Nobody can predict what is going to happen with the market in the next 2 year. Yes, some people try, many with very impressive credentials, but there are so many different opinions, who do you believe? The fact is, real estate will always go up in value over time. How much time is the big unknown right now. But if you buy low enough, you have a better chance of selling for a profit. And by low, I don't mean low-priced. I mean below current market value. Look at bank owned (REO) properties to find some great deals.

2. FInd homes that mainly need cosmetics. A coat of paint, new flooring, and a spruce up of the kitchen and baths will dramtically raise the value and lower market time. Don't buy a home that needs major renovations unless you can do most of the work yourself to keep the costs down.

3. Make sure the home is located in a desirable, fast-selling neighborhood. It doesn't matter how nice you make the place, if no one likes the neighborhood, they won't even want to see it, let alone buy it.

4. Concentrate on curb appeal. Make sure the outside of the house is immaculate. Spend some money on landscaping.

5. Enjoy the tax benefits in the meantime (assuming you are going to live there for the 2 years). Not only can you deduct the mortgage interest and some other expenses, when you sell you can make up to $250,000 profit and not pay any taxes on it! ($500,000 for couples). Please talk to your tax advisor for full details.

Good luck and I wish you much profit.
0 votes Thank Flag Link Sat Mar 1, 2008
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