Flip This Neighborhood

Yesterday, as I sat in Border's (I really wish we had something like that), I was thumbing through the Sunday Newsday and found myself reading a story in the LI Life section about the foreclosure crisis. Not surprisingly, there was a feature on Mastic Beach. The article (you can read it for yourself here) featured a street just not too far from Neighborhood Rd called Lynbrook Rd and interviewed a few of the residents in that small street. They spoke of how the vacant homes are an eyesore and bring nothing but squatters and others looking to steal (the copper pipes) or just cause damage to the properties.

One of the residents there expressed his love for the area and described how he has "deer roam into his yard and eat carrots from his hand". He was contemplating buying one of the vacant homes to fix it up and sell it but his wife is tired of the area and wants to leave.

Then I had an epiphany. What if a small group of local residents got together and did just that? Get a home, fix it up and sell it? The home has to be owner occupied, of course (I'm tired of all the rentals that bring shady people), and the objective is not to make money (though we wouldn't shy away from profit). The objective would be to minimize the vacant properties and have more owner occupied homes, affordable homes, to stop the "brain drain" in the island.

This group would have to be small (too many chefs ruin the soup) and each member would have their role based on the experiences that they could bring. I, for instance, have all my hard-money lenders, Realtors, and RE attorney connections. I'm handy with a hammer but it would be better to have a contractor or someone who's renovated a home before just to know the costs of material and have the renovation flow smoothly. Someone with a good eye for design would also be a good fit (I'm horrible at picking colors and all that design stuff). Someone who's good at marketing and could market the hell out of the property once it's done. And perhaps a silent partner to do small funding for small incidental expenses. I would, personally, prefer to take all the profit from the first year and not touch it. Keep it in the bank so that we'd have enough to bypass the lenders and pay cash for the properties in the second year (minimizing our monthly costs). I think a good goal for the first year would be to sell 4-5 homes.

Take this home that's on sale, as an example. It has fire damage but it's fixable. Now, how much would something like that cost? $50K? $75K? $100K? I don't know, I'm not a contractor. I do know that it's only $51K and could easily sell for $225-250K. So there's plenty to work with. Even if we'd have to sell it to break even it'll be a steal for a hard working family. And it'd definitely be better than a boarded up burned home.

Hmmm ... my brain is ticking. But I don't think I could set something up quickly enough to have the first home up for sale around April or May (the best month to sell a home). I definitely wouldn't want to have the first home out on the market in the fall or winter (the worst months to sell a home).