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.
THREE TIPS TO HELP YOU FIND THE
1. Know Your
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
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
2. Know When "Ugly" Means
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
Don't be afraid of stinky houses
that show horribly. Search 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
other real estate investors see them as gold mines.
3. Know When "Ugly" Means
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
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
Why would anyone want to do this
hard work? How much does the average rehabbers 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 © Jeanette J.
Fisher. All rights reserved.