Tips For Beginning Real Estate Investors: Fixing And Flipping Houses

Tips For Beginning Real Estate Investors: Fixing And Flipping Houses

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Many real estate investors 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 want to get started investing in real estate by fixing and flipping houses, you'll want to know what to type of property to buy.

Three Tips to Help You Find the Ideal Fixer

1. Learn Your Market

Your first task, exploring your market, helps you know a bargain house when you see one. Look at houses for sale in your area. Keep track of sales and how long the houses take to sell. Ask about the terms of these sales because this helps you understand how sellers market their property. 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 pay the buyer's costs, too. Examine the sales that sell quickly. What home features and financing options prompted the fast sale?

Also, look at model homes. Buyer often chose resale homes because they can't wait for a new home to be finished. But, these buyers like the amenities found in newer homes. When you transform your fixer, you'll know what buyers desire and you'll make informed makeover choices.

2. Know When "Bad" Can Be Good

When you first start out in your real estate "fixer" enterprise, you'll want to look for houses needing only cosmetic work. Look for houses that just need cleaning up, painting, and new flooring. Don't be afraid of stinky houses that show horribly; look 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 that other investors see them as gold mines. You need to use your imagination when viewing theses homes. Try to visualize the finished product.

3. Know When "Ugly" Means "Pass"

If the house has cat urine staining the carpet, the sub-flooring or concrete foundation may need replacing. Dog urine cleans up easier. If the walls have too many cracks and bumps, you may need to hang new sheet rock or hire a professional plaster refinisher. Look for signs of plumbing problems such as water stains under sinks and loose flooring.

When you're new to real estate investing, always remember your limitations. Use caution when considering houses needing structural repairs. Some rehabbers replace walls, plumbing, structural beams, sub-flooring, and electrical systems, but they acquired those skills after years of experience or pay a professional.

If you find a house with structural problems, get estimates from reliable contractors to do the work. Experience teaches you how to do more over time. Until then, rely on experienced contractors to do the repairs. Take professional estimates into account before deciding whether or not to purchase an investment property.

Why would anyone want to do this?

How much does the average investor make? In Philadelphia, real estate investors only make offers on houses they expect to make $30,000 on. In Southern California, many investors make $50,000 to $100,000 on each house.

You can make a fortune fixing and flipping ugly houses. Learn your market. Know when "ugly" means bad that can be good, and when stinky means keep looking.

Copyright (c) 2005 Jeanette J. Fisher. All rights reserved.


About the Author: For more information about finding, financing, fixing and flipping houses, visit Jeanette Fisher’s Doghouse to Dollhouse for Dollars. Learn about decorating to attract buyers. Jeanette teaches Design Psychology college courses and professional real estate seminars. She is the author of books about home staging, credit, and real estate. http://www.doghousetodollhousefordollars.com/

Source: www.isnare.com

Written by: Jeanette Joy Fisher

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