Foreclosure fix-ups 'make the market move'

There are approximately 100 foreclosures and bank-owned properties — not including raw land — across the Flathead Valley, according to Kristi Bruyer of Chuck Olson Real Estate.

That means lower home sales across the board, and homes that are not being foreclosed upon are a hard sell.

However, Kyle Lathrop is committed to buying up foreclosed and distressed homes, fixing them up and selling them at a reasonable price — all in about 30 days.

Lathrop, with investor backing, purchases about five houses a month around the valley. Most are in terrible shape, he said.

Employing between eight to 10 contractors for each fix-up, Lathrop and his partner replace foundations, patch or replace cracking drywall, replace kitchens, rewire and replumb.

Lathrop sees opportunity where most see disaster.

“It’s good for everybody,” Lathrop said. “I buy [the properties] from the banks and get them off their books. The [subcontractors] work, they have jobs. We buy material locally. Another family gets a house at a reasonable price. Since we’re keeping it in the valley, we’ll recover faster.”

One old house on which Lathrop’s team recently completed work was no longer square. Doors and cabinets wouldn’t close. The windows were painted shut. The crew raised the house about an inch, replaced windows, brought wiring and plumbing up to code, added outlets throughout, gutted and rebuilt the kitchen and added a small deck.

“When someone like Kyle buys a home in need of repair or a distressed home, it makes the market move,” said Nick Hansen, a broker/owner with Re/Max American Dream Properties Inc. in Kalispell. “He makes them nice, clean, livable homes and tries to do that in the range of first-time homebuyers.”

Hansen pointed out that the multitude of opportunities available to homebuyers — tax credits and low interest rates — make refurbished homes especially tantalizing.

And anything to employ contractors along the way is a benefit.

“Not many people realize how many jobs are affected by people buying and selling homes,” Hansen said. “The carpet people make money, the painters make money. It keeps the employment cycle going.”

Lathrop tries to put as much into a home as he can for $140,000, including his purchase price.

He explained that he and his partner don’t simply paint a place and call it good.

“I prefer to give people the biggest bang for their buck. It’s nothing extravagant, but people don’t need fancy stuff right now.”

Lathrop does not have any homes currently that will cost buyers more than $175,000. He also sells the houses just under market value — not enough to devalue neighbors’ homes — so that the new owners will have some additional equity after appraisal. Many of the homes appraise for about $20,000 more than they sold for.

“I don’t make a whole lot of money off of this, but I make up for it in volume,” he said.

Bruyer says such sales are helping people become homeowners.

“It’s helping our economy,” she said. “It’s helping people who would otherwise not have work. It’s getting people into a nicer home than they could have ever dreamed of. And he’s flipping [the houses] right away.”

Pending taking on new investors, Lathrop hopes to double his monthly load from five houses to 10. He plans to hire general contractors at some point to oversee the projects so he can focus on coordinating work, choosing colors and fixtures and balancing the books.

“More people work, more people buy, more people spend,” Lathrop said. “All this from teamwork. I want people to have a good product.”

Reporter K.J. Hascall may be reached at 758-4439 or by e-mail at kjhascall@dailyinterlake.com