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How to Make Money in a Down Market Buying Abandoned Houses

by Jeanette Fisher

Even when the real estate market is down, there are still properties that are perfect for flipping. Here's one great way to do it: buy abandoned houses.

Start by driving around your area, looking for houses surrounded by an overgrown lawn and a general feeling that no one has lived there for a long time. The more abandoned a home feels, the better prospect it is for making money--whether the market is up or down.

When you locate a prospective house, peek inside. If the inside looks just as abandoned as the outside, it's a prime candidate.

Next, talk to the neighbors on both sides. They can offer lots of information about the home, and they're often willing to help. After all, they live next door to a neighborhood eyesore, and they'd love to see you restore it.

You can peek in the mailbox for clues about previous occupants, but don't remove anything--that's illegal. You can often get a name from newspapers or junk mail on the front porch or in the yard.

You're looking for the name of a previous tenant and not the owner of the home in most cases. They're great resources for finding out what's wrong with the house, since they used to live there. You can try locating them through the phone book or on the Internet, and they're generally happy to say if the plumbing worked or the floors were saggy. Former tenants can help you locate the owner, too, since they'll often have that person's name and address.

Once you've learned as much as possible about the property, call the owner. Say that you're an investor who buys and rehabilitates properties in the area and that you might be interested in purchasing their home, assuming the price is fair and the repairs won't be too expensive.

Be friendly and listen carefully to what the owner says. If they sound open, and especially if they ask to hear what you have in mind, make your first offer and see what they say. They may jump on it. If they don't, you can always say that you've talked to a former tenant and heard about the various repairs that will be necessary. That may just close the deal.

Whether the market is up or down, there's money to be made flipping houses--if you're careful and take the time to do it right.

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