There are ton of investors out there currently looking for fixers right now. I get hit up daily from buyers that are all cash looking for a good house to fix and flip in Sacramento. We're seeing it become difficult with the low inventory and the margins are minimal. Some investors are buying a paycheck. They will make money on the deal but it's mostly from their labor that they are putting into the property. I'm no stranger to doing home improvements and I know what things cost. Everything from materials to labor has increased dramatically since Covid.
I reciently went to look at a property in Sacramento that was inherited by my client and he wanted me to take a look at it to see what he should do. It's a 2 bedroom 2 bath, 1400 sqft on 1/3 of an acre built in 1944. It comps at $400,000; however, it's going to be well over $100,000 to rehab the property. There's a ton of dry rot, electrical isn't grounded (2 prog), the kitchen and bathrooms need a full gut. It can become a rabbit hole and end up costing $150,000. For this to pencil, I would be comfortable around $225,000. The crazy thing is, I could sell it today for $275,000 no problem. My advise was to sell it "AS IS"! Don't put money into it. He's not a contractor and it makes more sense to walk away from it. Take the money and run I said. I also told him I wasn't interested in buying it as it needs too much work.
I have several fixers coming on the market soon. 2-3 houses in Sacramento, 2 in Roseville, 1 in Orangevale... Many of the fixers I get are court ordered partition sales. They are properties that are owned my multiple owners and one if forcing the sale. These typically have differed maintenance. As I'm a remax agent in Roseville, I'm also a court appointed referee on these properties. I'm not allowed to represent the buyers in these transactions; however, I can put you in touch with a broker.