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.

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