Buying Fixer Uppers in the Fl keys

Real Estate Agent with Coldwell Banker Schmitt

Buying fixer uppers
Ask many a home buyer about the type of house they are looking for and many will reply "We are looking for something we can fix up and live in (or resell). We like the idea of gaining some quick sweat equity." The classic "fixer-upper" home. Unfortunately, there is a bit of fantasy in the notion, though. First of all, there are many more fixer-upper buyers than there are fixer-upper properties. Second, the current thinking in many minds is that anyone can make a killing in the Real Estate market, which is not always the case. Third,
many buyers totally mis-estimate both the cost and the time involved in fixer-uppers, severely impacting (and in some cases destroying) the profit potential. Unless you are fully prepared to deal with the realities of fixer-uppers rather than the fantasies, it probably is a good idea to look elsewhere for a home.

This does not mean that there isn't equity to be gained (or profit to be made) by purchasing the RIGHT property at the RIGHT price. The important notion is to understand that there are several factors that will make the difference between winning and losing in such a transaction.

The Mindset

The first factor that must be understood is that it isn't going to be easy. The only people who think that finding, buying, fixing and selling a home is an easy task are those who have never done it. Those with any experience (even if only once) will tell you that it rarely is as simple as it appears. In general, it is best to assume that repairs will cost twice what you estimated, take double the amount of time and,when finished, the house will be worth less than expected. If you keep that in the forefront of your thinking, the chances of being burned are much less.

Foreclosure sales are often good sources for fixer-upper properties. A couple of resources that specialize in listings of those types of homes are and . All three of the resources above offer free trial periods to evaluate their services and search for foreclosure listings in the area in which you are interested.

Start Out Small

Some of the worst examples of mistakes made by buyers of fixer-uppers are first-time buyers who bite off way more than they can chew. Examples of this are houses that have structural problems or will take an exceptionally long time to repair, or are located somewhere other than a desirable neighborhood. These can be a horrible drain on finances, time and peace of mind.

A much better strategy for the inexperienced is to purchase a home in a desirable neighborhood that is in need of cosmetic attention--new paint, carpeting, appliances, landscaping and the like. These repairs can either be handled by the homeowner or are easily contracted out, saving time, effort and money. Yes, money can be made on homes needing major renovations, even if they 
are in less popular neighborhoods, but these are jobs for professionals, not homeowners (and definitely not for first-time homeowners!)

Avoid Surprises

The most expensive situations are often those that are the least expected--those nasty little (and often big) surprises that jump out at you. You can avoid many of these surprises, though, with a couple of easy steps taken BEFORE final commitment to a property.

1) Have the property thoroughly inspected. Have the inspector detail all obvious (as well as potential) defects in the property. NOTE: The seller may say "we are selling the house as-is, so NO inspections." Avoid this property like the plague.

2) Run the numbers. You must know the market values for houses in the neighborhood in which you are interested that need no repairs. Running the numbers means working them backwards to see how much equity or profit may be available (or even IF there will be any) in the deal. You will need to begin by computing the realistic value of the home when all repairs are made. From that point, you will need to subtract any selling expenses you will incur (commissions and the like) as well as the full cost of repairs and, most importantly, the amount of desired profit or equity.

$600,000: Expected Sale Price, Repaired
-40,000: Selling Expenses
-25,500: Repair Expenses
-50,000: Desired Profit/Equity
$485,000: Maximum Property Purchase Price

Don't be deluded into thinking that you'll be able to sell for more than the market value or do the repairs for less than the estimates. If the numbers don't fit--with a good amount of "wiggle room" for more expense or handling costs or if the property does not sell quickly--don't waste your time or your money!

Summing Up

When considering a fixer-upper, whether for resale or to live in with increased equity, go into the process fully prepared so you will avoid many surprises. For your first project, only consider structurally sound homes in good neighborhoods requiring cosmetic repairs only. Have any property you are considering fully inspected and then get firm estimates for all needed repairs. Most importantly, "run the numbers" to be certain that the potential for gain is truly there. If you are satisfied on all counts, you may very well be able to be successful with your fixer-upper project “Remember not making a decision is still a decision!

Building a Home in the Keys 
Buying a lot and building your dream home may be the way to go. The cost of building will vary widely from $150.00 per square to $300.00 and up.
Basically lots in Florida as far as price goes will run as follows.
Most expensive
• Open-water—Atlantic or Gulf 
• Open-water Inter-Coastal or other Rivers-Lakes 
• Canal Homes with Open water views (Bay or Atlantic-Gulf) 
• Canal homes-Boatable and quick access to open-water 
• Dry Lots—price varies widely, based on the community and area.

*As to canal lots and how boat ability affects prices.
If the depth of the canal and the width allows for a 50ft boat or sailboat-it will be more expensive than a lot on a canal that is shallow and usually not as wide. The bigger the boat, the more room needed to turn around.

*Access to open water is another factor that influences prices.

If you’re only minutes (half hour) to good fishing-diving, expect to pay more.
Also homes on shorter canals will generally have better water quality. In the Keys we call these swimming canals. The tides flush them out easier and the water is clear.
As of September 2005, per an MLS search,

Vacant lots-Location-Number available and starting price.
• Key Largo, 89 starting at $30,000 
• Marathon, 446, starting at $35,000 
• Key West 20, starting at $275,000

For prices on the individual keys please contact me. The prices will vary depending on depth of boating etc—see information below.

Permit prices and restrictions will vary in each community. Generally the more environmentally sensitive the area is, the more restrictions there are in getting a permit. (Since the water is one of the main reason people want to be here, the state and the communities want to keep it that way.


Regarding pricing. The closer to the water and the deeper the boating,(boat draft-a 50 foot requires deeper water and wider canals than a flats boat) the higher the prices.

Another thing to do is find out what flood zone the property is in per FEMA maps and then talk to a local insurer on how that will affect your rates. Do this ahead of time.

#In all cases if you find a lot that you like, my suggestion is that you ask for a letter of build ability from the local zoning commission as a clause in your sales contract. Always-always, talk with the county yourself to get the update on the laws.

So, yes, you can build here and it’s done all the time, but make sure you ask all the necessary questions and if you can, get it in writing.

See the Biz directory for builders if that’s the way you want to go. If you want a new home contact a residential agent.


Ask the REALTOR that you pick to help find you a good builder that will respond quickly. Another consideration is to buy a lot and build later (be careful here as building codes and laws can change due to density controls) I would first see how long it takes to get a building permit and then if you get one how long you can wait. In the Keys when you get a permit there is a limit of a couple years during which time you have to at least start the process (bring electric to the site-do a septic check etc)

Since all this varies widely make sure you get all the answers, Probably best to go the the permit department yourself and have a discussion

Monroe County permits

You will probably need a building permit if you are:
• Building a new building or Adding to an existing building 
• Renovating an existing building 
• Demolishing an existing building 
• Constructing a prefabricated structure 
• Moving or installing a mobile home 
• Installing/Modifying other miscelaneous structures 
• including fences, pools, decks, fireplaces, etc.

You probably also need a permit if you are working on your structure's:
• Electrical System 
• Plumbing System 
• Heating or Air Conditioning 
• Ventilation Systems

State and or Municipal Licenses required
• Plumbing 
• Electrical 
• Asbestos Abatement 
• Roofing

Building Departments
• 2798 Overseas Highway 
• Suite 300 
• Marathon, FL 33050 
• 305289-2501 
• fax: 305 289-2515 
• 88800 Overseas Highway 
• Tavernier, FL 33070 
• 305852-7100 
• fax: 305 852-7103 
• Juvenile Justice Building 
• Room 2030 
• 5503 College Rd. 
• Key West, FL 33040 
• 305295-3990 
• fax305 295-3994

Florida Building Codes

The purpose of the Building Code is to protect the safety, health, and general welfare of the citizens through structural strength, stability, sanitation, adequate light and ventilation, and safety to life from hazards attributed to the built environment. This is accomplished through the implementation of building, plumbing, mechanical and electrical codes along with various state and local codes and standards

Information on Complaints Against Contractors:
Don't get nailed! Many citizens in Florida have fallen victim to dishonest, unlicensed or improperly licensed contractors. Florida Statute 489 requires all construction contractors to hold a valid contractor's license prior to engaging in contracting. Always require that a contractor show you a valid contracting license before you sign a contract. Some indications that a contractor may be unlicensed are: the contractor requests a large deposit or all of the money up front before any work has commenced, the contractor asks you to pull a "homeowner permit", the contractor pressures you to sign a contract "today or I can't give you this special price." To verify licensure of a contractor, you may call the State of Florida Dep't of Professional Regulation at 941 338-2373 or search their contractor licensing database. The City requires proof of licensure from contractors who pull permits for properties located in the City, so be sure to require that the contractor pull the permit in his name, not your name

So always play it safe and do it right. This will certainly help you in the Insurance area also---The extra structural costs for doing it better really pay off if a Storm hits and or you decide to sell

#The information above is based on my experience in the Florida keys, which is highly regulated due to environmental concerns. With regard to making any decisions, be sure to check with local and state permit and zoning authorities and/or a Real Estate attorney


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Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Carol~Your post makes it clear that any would-be "flipper" should engage the help of professionals!

Dec 14, 2010 03:37 AM #1
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Carol Amend

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