More foreclosures mean more fixer uppers

By Alina Dizik

NEW YORK (Reuters) - A year after purchasing their Richmond, Virginia, fixer-upper for $290,000 in 2010, Sherry and John Petersik rolled up their sleeves and tackled the outdated kitchen.

They dragged the refrigerator and microwave out of the way, set up a dish-washing station at the bathroom sink and plunged into do-it-yourself mode, installing a new countertop, refinishing cabinets and replacing appliances.

"We knew to expect the chaos," says Sherry Petersik, 30. That's because it's the second home the Petersiks have renovated for fun and the promise of profit.

They actually lost money on their first handyman's special, buying a home for $190,000 at the height of the real estate bubble in 2006, pouring $30,000 into it, and then selling it for $195,000.

"But we lost tens of thousands of dollars less than our neighbors did," Petersik says. Plus, they unloaded the house in days.

Now the couple is older and wiser, but still hooked on the dust, noise and profit potential of home renovation. "We got comfortable with that lifestyle of sweat equity," says Sherry.

They have already added window treatments and a cobblestone patio and modernized a fireplace in their new home, and after the kitchen is done, they expect to have spent a total of $10,000. She expects that to give them a nicer house than they could have afforded to buy, and to add $50,000 to the home's value.

The DIY strategy is gaining traction these days as energetic homeowners try to build equity in a still-depressed housing market, with a growing number of foreclosures filling the multiple listing services with run-down homes.

According to RealtyTrac, a foreclosure listing service, 26 percent of homes sold in the first quarter of 2012 were foreclosed properties, an increase of 8 percent from 2011. Short sale properties accounted for 12 percent of national sales for the first quarter of 2012, up from 9 percent last year.

See the original post here:
More foreclosures mean more fixer uppers