subject: Ideas for Investing In a Fixer Upper Home [print this page] A fixer upper home, from an investor's point of view, is money lying on the street waiting to be picked up. Although investing in it isn't literally as easy as picking a dime on the pavement, it isn't as complicated as rocket science as well. Anybody can do it as long as that person studies the investing method well and takes action to move closer to the completion of the deal.
First and foremost, it is important that the term fixer upper home is properly defined for the purpose of this article's discussion. Without sounding scholastic, such home is simply a property that obviously requires a lot of repair. It has signs of neglect that are too obvious to neglect. For example, if the lawn is obviously overgrown, then that means that that particular part of the house has been neglected. It could well pass as a handyman special the other term for these properties if it has other signs of obvious neglect like chipping paint, damaged roof shingles, rotting sidings, among others.
If you're sure that the property is indeed a handyman special, here are the investing methods that you can use. The first one is called wholesaling. Simply put, you will buy and sell the property at a wholesale price, or one that's low enough to allow a retailer to resell the property and make profit as well. Why not be the retailer? That requires more capital and is riskier to beginners. The secret here is to find owners that are very motivated to dispose of their property. They may have suffered a death in the family and the finances won't allow them to keep the house. It's also possible that they have an urgent need to move to another house, for instance, if their breadwinner was relocated.
The other method is called retailing fixer upper homes. Also called rehabbing, this method means you will resell the property at a retail price. But to raise the value of the property, you need to invest in repairs and improvements. That's where the rehabilitating or rehabbing happens. Be sure to find out what repairs are too costly and if the house needs such repairs, stay away from it. Choose properties that only need "cosmetic" repairs such as repainting. Be sure too that you hire a competent contractor who understands that you need to spend as little as possible on repairs.
