Just read an article refered from a post here. Would like to discuss these strategies:
Buy a land lot in an expensive area and buy a house in a cheap area. Then transport (use truck company) the house to the expensive area land and sell it for a nice and quick profit. Sounds too good to be true. Will it work?
Buy some land lots in expensive area and buy “clever homes” for quick assembly build. Then sell piece by piece for big profits.
Anyone did similar deals? Will it work?
To move a house it is my understnding that it would have to be pier and beam construction. This would make it an older home in most areas I am familiar with so probably not suitable for expensive development. 25 years ago when we moved our present home out to our country acreage it was $1000/ mile. You have foundation costs, repair costs (sheetrock cracks, etc.) and utility hookups and other costs (fees, permits) etc associated with the move. Additionally, there may be deed restrictions etc with your expensive land.
A fair amount of investors in our area have this strategy. The main thing is to match the home to the neighborhood. I believe you can move a house on a slab, but it will cost a lot more than just pier and beam. You may be able to get ballpark figures from a house moving company in your area.
Moving homes can work because older homes in various parts of the city are often very similar, but one area may be more or less undervalued than the other. For instance, some houses in East Austin are very similar to west areas, but you can get twice as much or more on a sale in West Austin. Keep in mind that lot costs can be 2-3x in some of the popular west areas, so you need to be careful on your numbers.
You need to get a house at a great price, but it should still have features that will make it comparable to the neighborhood you are moving it to. For instance, original hardwood floors and unique/original accents can really help the market value of homes in our older neighborhoods.
Also, the other poster is right. You need to check on neighborhood plans and deed restrictions as part of your due diligence. Keep in mind that there can be various ordnances or legal guidelines on setbacks, removing trees, etc. A survey will help you determine some of the issues, such as whether the property is in a flood plain. This really hurt one of the deals I was doing with an investor.
Thx for the info. So it is still a very costly strategy. How about the 2nd one? here is clever homes website ( http://www.cleverhomes.net ).
The total cost is $300K ~ $500K per house depends on the land cost. Someone did a deal and build 13 houses and sold each one for 600K.