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 dont turn a profit.
If youre looking to get started investing in real estate by fixing and
flipping houses, youll want to know what type of property to buy.
Three Tips to Help You Find the Perfect Fixer
1. Understand Your Market
Your first task, exploring your market, helps you know a deal when you spot
it. Look at houses for sale in your area. Keep track of sales and how long the
houses take to sell. Ask the selling real estate agent 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 buyers 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 cant
wait for a new home to be finished. But these buyers like the special 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, youll know what turns buyers on and youll make smart
makeover choices.
2. Know When "Ugly" Means "Profit"
When you first start out in your real estate "flipping fixers" business,
youll 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. We like to buy the ugliest house
in a decent neighborhood.
Dont be afraid of stinky houses that show horribly; look for fixers with
peeling paint, holes in the wall, stained carpeting, and trash in the yard.
Remember, these houses wont look good to most buyers, but other investors see
them as gold mines.
3. Know When "Ugly" Means "Pass"
When youre 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,
but they acquired those skills after years of experience or they have the money
to pay a professional.
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. Look 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
investor make? In Philadelphia, 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. Learn your market. Know when
"ugly" means profit in your pocket, and when to keep looking for the house with
the hidden gold mine.
About the author:
Copyright (c) 2005 Jeanette
J. Fisher. All rights reserved.
For more articles about finding, financing, fixing and flipping houses, visit
Jeanette Fisher�s Doghouse to Dollhouse for Dollars. Learn about decorating to
attract buyers. Professor Fisher teaches Design Psychology college courses and
professional real estate seminars. She also writes books and articles on home
staging, credit for buying real estate, and other topics.
