There's one house in my neighborhood that's been bought and sold repeatedly over the decades, and I don't think anybody's ever made much money, with the exception of one guy. It's an old Sears and Roebuck home, similar to this one: http://www.searsarchives.com/homes/i...3202-p7009.jpg
except that it was 24x36 plus the front porch, and no basement.
My great-aunt and uncle bought it for around $36,000 back in 1982 or so, from an elderly couple who wanted to leave the area and move back to a family farm. They put in a new septic tank, got it hooked up to city water (had been on a well) and did an extensive remodeling that included a 14x24 addition off the back. They also put on a sunroom off the side of the addition, which was maybe 12x14 feet.
My great-uncle died in 1989, and my aunt didn't want to live in it anymore, so she sold it for around $100K that year. Considering inflation, all the work that got put into it, etc, I doubt if she really came out much ahead.
The guy who bought it in 1989 didn't do much to it, although he put a fence around the whole yard (1/2 acre), and ended up selling in 1993, to a young married couple, for around $110K. Again, I'm sure inflation and closing costs ate up any "gain".
That young married couple had a daughter. Then another. By the time the wife got pregnant again, they realized they needed more space. This house only had two bedrooms and one bathroom, and with three young girls, that was gonna get really crowded, really fast, as they got older! They sold for $125K in 2000. Once again, over the course of 7 years, $15K of appreciation isn't much, plus factor in closing costs and such.
The next people who bought it trashed it and were gone by late 2002. The house sat over the winter, and went on the market in the spring of 2003. I looked up the records that said the bank "bought" it for $123K, but I'm sure that was some short-sale price or something, these people got nothing, other than the copper baseboard pipes, appliances, and other things that they ripped out of the house.
In 2003 the house went on the market for $143K. I looked at it with my real estate agent, and with a disgusted look on her face she said don't offer them more than $100K. Well, someone else offered them $145K, and got it in October of 2003. He put a LOT of work into the house and the detached 1-car garage. Took the big 14x24 room which had been a kitchen/family room, and turned it into a kitchen with a master bedroom off of it, and then what had been the sun room, was converted into a master bath and closet. He had trouble selling the place, but in October 2007, at the peak of the market around here, managed to get $375K for it.
Now, I'm sure THIS guy made out pretty good on it, even though it sat for four years, and he put all that money into it.
Alas, the people who moved in, an older couple with a disabled wife, ended up moving all sorts of kids and grandkids and other relatives in and out on a rotating basis, the place is getting trashed again, and it's currently on the market as a short sale for $149,900.
Maybe I should go and offer them $100K again, like I did 8 1/2 years ago? I'm tempted to get my real estate agent to go with me again to look at it, but I'm afraid to see how bad it's been trashed. Plus, I'm a bit leery of how the sun porch was converted into a bathroom/closet.