Fixer Uppers Investing Tips
When investing in fixer uppers or fixer upper properties, there are a few tips you can follow. You can find many guides to investing in fixer uppers in many real estate books. Learn as many fixer uppers investing tips as you can before investing in fixer upper properties to avoid costly mistakes.
Where to buy fixer upper homes?
Knowing the real estate market for fixer uppers is key. The first fixer upper investing tip is to not buy fixer uppers homes in a neighborhood that is full of fixer uppers homes already. If there are alot of fixer upper homes around, there could be a sign that the area is growing and buying fixer uppers there will be profitable. However, if you are looking to flip houses quickly, you could be stuck with fixer upper homes you bought for awhile because buyers have plenty of choices of which fixer uppers or rehabbed houses to buy.
The way to be successful at investing in fixer uppers is to buy fixer upper properties in the nicest area. You want to buy the worst house in the nicest neighborhood you can afford. You do not want to invest in the most expensive fixer upper properties, the biggest fixer uppers or the nicest fixer uppers. There is no room for growth that way. Instead, if you buy the worst fixer upper homes in the best part of town, you stand to make a handsome profit.
Obtain home improvement financing / loans
If you are thinking of rehabbing fixer upper homes, it is best to get the best loans with lowest interest rates and favorable terms for rehabbers. There are now rehab loans or renovation loans or purchase and renovate loans. If you have a mortgage broker, they may be able to shop for the best rehab loans for you. Otherwise, ask big mortgage companies for information on their rehab loans.
Do your due diligence and profit calculation right
There are dangers flipping houses and there are dangers of getting into fixer uppers. Don't expect everything to go smoothly especially if you are just starting your career in real estate investing. Budget in plenty of room for errors and unexpected costs. After all, when you invest in fixer uppers, you don't know when you will be able to sell the finished homes or if you can even get the costs down like you want to. With that in mind, you should only invest in fixer upper properties of at least 20% below the market value. Some people only invest in fixer uppers that are 30% below. It is up to your situation and the real estate market that you are in. After all, there are plenty of fixer upper properties for sale.