How to Get Started in the Real Estate
Game Fixing and Flipping Houses
If you're looking to get started investing in
real estate by fixing and flipping houses, you'll want to know
what to type of property to buy. Many real estate investors
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.
Three Tips to Help You Find the Perfect
1. Learn Your Market
Your first task, exploring your market, helps
you know a bargain house when you see one. Look at houses for
sale in your area. Keep track of sales and how long the houses
take to sell. Ask about the terms of these sales because this
helps you understand how sellers market their property. 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 pay the buyer's costs, too.
Examine the sales that sell quickly. What home features and
financing options prompted the fast sale?
Also, look at model homes. Buyer often chose
resale homes because they can't wait for a new home to be
finished. But, these buyers like the amenities found in newer
homes. When you transform your fixer, you'll know what buyers
desire and you'll make informed makeover choices.
2. Know When "Bad" Can Be
When you first start out in your real estate
"fixer" enterprise, you'll want to look for houses needing
only cosmetic work. Look for houses that just need cleaning
up, painting, and new flooring. Don't 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 won't look good to most buyers, but
that other investors see them as gold mines. You need to use
your imagination when viewing these homes. Try to visualize
the finished product.
3. Know When "Ugly" Means
If the house has cat urine staining the carpet,
the subflooring or concrete foundation may need replacing. Dog
urine cleans up easier. 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
When you're new to real estate investing,
always remember your limitations. Use caution when considering
houses needing structural repairs. Some rehabbers replace
walls, plumbing, structural beams, sub-flooring, and
electrical systems, but they acquired those skills after years
of experience or pay a professional.
If you find a house with structural problems,
get estimates from reliable contractors to do the work.
Experience teaches you how to do more over time. Until then,
rely on experienced contractors to do the repairs. Take
professional estimates into account before deciding whether or
not to purchase an investment property.
Why would anyone want to do this? How
much does the average investor make? In Philadelphia, real
estate investors only make offers on houses they expect to
make $30,000 on. In Southern California, many investors make
$50,000 to $100,000 on each house.
Summary: You can make a fortune fixing ugly
houses. Learn your market. Know when "ugly" means bad that can
be good, and when stinky means pass.
Copyright (c) Jeanette J. Fisher. All