Fixer-upper houses are great for fixing and flipping investment, but only if you know what you're doing. The oft heard phrase "Buyer Beware" is never more appropriate than when considering the purchase of a fixer-upper. You really need to know exactly what you’re getting into before buying. At our free workshops, you will learn all about real estate house flipping.
It’s commonly believed that fixer-upper houses represent great investments - that you can buy it, do rehab on it, and then resell quickly for a profit. And this is certainly true in this economy. With proper education and foresight, good profits can be made by buying "distressed" houses at less than market value, making appropriate repairs, and updated renovations, and then reselling ("flipping") at a profit. And for many first-time buyers who intend to live in the house while working on it, buying a fixer-upper can be an excellent option. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.
The most important thing to know before making a decision on such a purchase is what needs to be fixed. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or wallpaper are the best bet. This is especially true for the first time buyer looking to live in the house for a while before reselling. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays the highest return. Don’t be afraid of buying a fixer-upper in need of this kind of repair. But properties with structural damage, or a floor plan that requires major work to remedy, usually is more problematic, so proceed with caution.
Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper. With real estate house-flipping, make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection. In the alternative, have the Seller lower the sales price to sell the home "as is" instead of paying for the repairs.
Further, be careful that you don’t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer.
If you are interested in attending one of our free workshops in your area, please go back to our home page, and click on the appropriate workshop, and register.