Investing in Fixer Uppers and Flipping Properties
There are many people who make a great living buying and selling “fixer upper” homes. If done properly, this can be a great way to make money. But if you’re thinking of getting into the business of flipping property, you should be aware of the problems and challenges you may face.
The first challenge you will face is finding the right property to buy. Real estate listings often try to make the home seem as inviting as possible, so it may be hard to spot a house that needs some work. You should look through ads and classifieds for key phrases like “needs some TLC” and other indications that the home isn’t in the best condition. You may also want to drive around neighborhoods you are interested in and look closely at the homes for sale.
To be able to make a profit, you don’t want to buy just any run-down home. Try to find a property that’s not in an area where all the homes seem like fixer uppers. You want an area where house values are already rising or where other homes in the area are worth substantially more than the home that needs fixing. This will give you the most profit from your investment.
You’ll find the best bargains from homes that have been left vacant by their previous owners. You also want to determine if the damage can be fixed reasonably. The best houses to flip easily are those that require mostly cosmetic fixes, like new paint, countertops and carpeting, as opposed to damaged pipes, roofs, or foundations.
Once you’ve found a home you think has potential, find out if it will be worth your time and money. First, get the property inspected; this way you won’t have any surprise repairs later on. Then, talk to an appraiser to find out the value of the house as is and what it could be with the needed repairs. You can also get comps (comparables - other homes that have recently sold in the area) from your real estate agent. Finally, get quotes from several contractors to find out how much repairs will cost. This will help you determine if what seems like a great real estate deal really is one.
While investing in fixer upper properties can be a great investment, be sure to do research and be well prepared before making a purchase.
About the Author
Kathy Fettke is a real estate investor, certified personal coach, and host of The Real Wealth radio show. Kathy specializes in helping people build multi-million dollar real estate portfolios through creative finance and careful planning. Learn more at www.RealWealthNetwork.com
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