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| Flipping Houses for Gold: How to Find the Perfect Fixer |
Many real estate investors enjoy "flipping houses," or buying
and selling houses quickly for profit. Not all flips are fixers.
However, rehabbers make millions turning ugly houses into
dollhouses. On the other hand, some inexperienced investors lose
money buying houses that just don't turn a profit.
If you're looking to get started investing in real estate by
fixing and flipping houses, you'll want to know what type of
property to buy. HOW TO FIND THE PERFECT FIXER
1. Know Your Market
Your first task, exploring your market, helps you know a bargain
house when you spot one. Look at many houses for sale in your
area. Keep track of sales and how long the houses take to sell.
Ask selling real estate agents about the terms of these sales
because this helps you understand how sellers market their
property (some of this information is public record). For
instance, if a seller paid closing costs for the buyer, did the
price rise from the listed price accordingly? Or, did the seller
come down on the price and also pay the buyer's costs?
Examine the sales |
that sell quickly. What home features and
financing options prompted the fast sale?
Also, look at model homes. Buyers often buy resale homes because
they can't wait for a new home to be finished. However, these
buyers like the distinctive features new homes offer. Visit
model homes and take notes on how details like a water fountain
or a new state-of-the-art appliance makes a house sell itself.
When you remodel your fixer, you'll know what attracts buyers
and you'll make smart redesign choices.
2. Know When "Ugly" Means "Gold"
When you first start out in your real estate "flipping fixers"
business, you'll want to look for houses needing only cosmetic
work. Look for houses that just need cleaning up, painting, and
new flooring. Use your imagination when viewing these homes. Try
to visualize the finished dollhouse as you look at structural
features and the surrounding homes. Make offers on the ugliest
houses in decent neighborhoods.
Don't be afraid of stinky houses that show horribly. Search for
fixers with peeling paint, holes in the wall, stained |
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carpeting,
and trash in the yard. Remember, these houses won't look good to
most buyers, but other real estate investors see them as gold
mines. 3. Know When "Ugly" Means "No Thanks"
When you're new to real estate investing, always remember your
limitations. Use caution when considering houses that need
structural repairs. Some rehabbers replace walls, plumbing,
structural beams, sub-flooring, and electrical systems. These
experienced real estate investors acquired those skills after
years of experience or they have the money to pay for
professional help.
If you find a house with structural problems, get estimates from
reliable contractors to do the work. If the walls have too many
cracks and bumps, you may need to hang new sheet rock or hire a
professional plaster refinisher. Check for signs of plumbing
problems such as water stains under sinks and loose flooring,
and get estimates for professional repair. Take professional
estimates into account before deciding whether or not to
purchase an investment property. Any big expense decreases your
eventual |
profit.
Turn Yucks into Bucks
Why would anyone want to do this hard work? How much does the
average rehabber make? In Ohio, real estate investors buy houses
expecting a profit of about $30,000. In Southern California,
many investors make $50,000 to $100,000 on each house.
When you find a garbage-filled, flea-infested house in a family
neighborhood, take your bug spray, hold your nose, and get ready
to make a difference, in the neighborhood and in your bank
account.
You can make a fortune fixing nasty houses. Know your market.
Know when "ugly" means profit in your pocket, and when to keep
looking for the house with the hidden gold mine.
Copyright © 2005 Jeanette J. Fisher. All rights reserved.
About the author:
Jeanette Fisher teaches beginning real estate investors five
easy steps to find, finance, and fix houses for profits. Free
ebook on fixing houses using interior design strategies for
top-dollar sales, http://www.doghousetodollhousefordollars.com/
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