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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 when flipping
houses:
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. When looking for
flipping houses, Know When "Ugly" Means
"Gold":
When you first start out in your real
estate flipping houses 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
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
flipping houses:
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 of
flipping houses 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.
When flipping houses,
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
of flipping houses? 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
properties and flipping 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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