Beginner's Real Estate Investing Guide:
How to Buy
Fixers
By Jeanette Joy Fisher
It's been said many times
before, but only because it's always been true: If you
want to be a successful real estate investor, the best
way to begin is by finding a "fixer-upper" house being
offered for sale by a seller who really wants to get rid
of the property.
Why would a seller sell a property at a low price or
with great terms?
The reasons are as numerous as the number of sellers,
but the most common situation has to do with money
problems. Whether it's due to divorce, illness, or loss
of employment, some sellers find themselves in need of a
quick sale, especially if they're facing potential
foreclosure on the property.
Living room in investment house
As a beginning investor, the most desirable type of
investment house to look for is a "Triple D," which is a
doghouse owned by a seller involved in a divorce who is
close to defaulting on the loan.
The term doghouse describes a rundown home that's tired
but not in need of much structural repair to bring it
back to life and to make it sparkle. A great doghouse
also has the potential to fit nicely into a neighborhood
of well-maintained homes once again after the repairs
have been done.
One advantage to investing in fixers is that your
competition will be less than for homes in better
condition. Ugly houses scare away home buyers who don't
have the money to finance the repairs or upgrades
necessary to turn a doghouse into a dollhouse. As you
scan the classified ads, look for terms such as
"handyman special" or "fixer-upper." They're clues that
there's work to be done to bring a house back to an
acceptable condition.
Once you've located a doghouse that can be converted to
a dollhouse without a great deal of time or money, the
next step is to find out what seller's problem is and
then to offer a solution. Most sellers who've let their
homes run down will be in need of a quick injection of
cash, so if you're in a position to offer a speedy cash
out, you'll be in a strong bargaining position.
Establish a relationship with a lender and get
pre-approved for a loan before you've found your
property. You want to be able to show a seller that you
can quickly alleviate their money problems.
Your object is to get into the home quickly, fix it up,
and then sell it, so you can move on to the next
property. Look for entry-level homes that are merely
ugly and in need of mostly cosmetic upgrades such as
paint or new carpet. Those are types the houses you can
flip quickly and make the most money on, because there's
always a strong demand for entry-level houses. I know
it's true because my husband and I sold a little fixer
in a great neighborhood within three hours!
Find a Triple D house in your area and you can be on
your way to becoming a successful real estate investor,
too.
Copyright © 2006 Jeanette J. Fisher
This is the first in a series of
new ebook "Real Estate Investing Guide."
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