It's, no doubt, a terrible economic time. In spite of that, my youngest son and I have been doing pretty well buying, refurbishing and reselling foreclosures here in Lexington.

We did three last year, have one in the works and are bidding on several right now. Most are HUD repos.

A typical one last year was an 1100 square foot, 87 year old single story frame home at the edge of an area undergoing lots of renovation, mostly by people associated with the University of Kentucky and other professionals. This little place had a 2 fuse electrical system. We bought it for $40,000.00, spent $34,000.00 in renovations. It appraised for $110,000.00 when we finished it. It turned out great, and my oldest son wanted it. We had offers for $100,000.00 just before it was complete.

I just supply funding and moral support and my son does the rest. By starting with a conservative selling price when complete, building in a 10% contingency fee (for "surprises"), building in a 20% profit and then bidding the difference to purchase the property, we cleared $50,000.00 in 2008, and didn't start the first project until April. At closing, we have the dumpsters outside the building, and start on it immediately. We work on a 90 day timetable, and have a reception for all the subs and other "helpers" on the 88'th day. The open house for realtors is on the 89th day, and the house goes on the market, if it's not already pre-sold, on the 90th day. We are only involved in homes that will sell in the $85-125,000.00 area...lots of Federal assistance programs I know about thru my work with banks and Credit Unions.

We do a new dimentional tile roof, new windows, new electrical system, new siding, new water heater, new heat pump and furnace, new bathroom and kitchen with tile floors and new washer, dryer, stove and refrigerator. We have remote control fans in most rooms and recessed lights with dimmers. Bathroom and kitchen hardware is a step above builder quality. Cabinets are solid oak and the kitchen counter top is generally granite. That way, instead of having to say, "you have three more years on the roof, or, the furnace is 10 years old", we say, "mechanically, all the infrastructure is new". Purchasers don't have to buy anything additional, and most are stretched to the hilt to qualify. Supplying the washer and dryer is not conventional, but much appreciated by the buyer, and helps the "turn-key" approach. The buyer gets all the warranties on the appliances and a 5 year warranty on the renovations.

My son hopes to leave his day job and do it full-time when the market improves.

The current project involves removal of a large slab from a demolished home and building a 1500 square foot unit from scratch.

My son and I are enjoying working together.

And that's what's REALLY important.


Russ