Profit with “fixer uppers” in today’s slow market

In today’s stagnating market, investing in rentals or other long term housing may not be a smart decision. However, there are plenty of homes out there in need of minor TLC that could easily turn you a quick profit as long as they have the following characteristics.

1. Look for a three or four bedroom home with a good foundation, without any need for major renovation other than cosmetic fix-up. Try and avoid two-bedroom homes as they will be harder to sell in today’s market.

2. Location is key. You want to ensure the property you buy isn’t negatively affected by the surrounding area. You can turn the ugliest home into an eye charmer, but you can’t change things like crime rate, noise pollution, and run-down neighborhoods.

3. You should never put a nickel into a house if you don’t plan on getting at least a dime out of it. Improvements like fresh paint inside and/or out, new light fixtures, new carpet and/or flooring, and landscaping are relatively inexpensive when you consider the amount of return you will net from these improvements. However, if you need to bring in licensed contractor to re-wire the house, install new plumbing, repair the foundation, etc. then you’ll quickly be setting yourself up to take a loss.

4. Purchase a home at least 25-30% below market value of comparable homes in good condition. Your goal is to buy the home, fix it up as quickly as possible, and then sell it quickly. In order to do that, you may need to put the home back on the market slightly under what others are offing in order to sell in today’s market. If you buy it for only 10% under, you may end up breaking even on the deal, which would just be a waste of time. If the seller is unwilling to discount the price, then start looking for another house.

5. Find a motivated seller. Many sellers need to sell their home rather quickly due to a job transfer, pending foreclosure, divorce, etc.

6. Make sure the seller or tenant will vacate immediately upon transfer of title. Trying to fix up a home while someone is living in it is extremely difficult.

7. Home is within reasonable driving distance. You will want to visit the property often while the work is being done. Workers tend to start slacking off if you don’t inspect the property frequently and ensure they are doing the work.

8. Good demand from renters and/or buyers. You only want to buy where local employment and economic conditions are good. If more people are moving out of an area than into it, it’s probably not a good idea to buy there. Also, have a back-up plan. If for some unseen reason you are unable to sell the property after the repairs are done, it will be more beneficial to you if you already determined that you can rent the property fairly quickly without taking a monthly loss. Otherwise you may find yourself taking a loss just to be rid of the property.

Related Posts
Beginner Tips for the Real Estate Investor
Understanding Local Markets

Should you have any questions or need further information, please don't hesitate to contact me,(775) 220-1630
Or visit my website at www.SellingNorthernNV.com




Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521



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Increasing Foreclosures

In July the amount of foreclosure fillings were up 93 percent compared to July 2006, and 9 percent from just the previous month. In Nevada, there was one filing for every 199 households, making Nevada the state with the highest foreclosure rate with the majority of these filings happened in Clark County.

The main reason behind these increased numbers seems to be that people were refinancing their homes to reduce debt rather than budgeting back. In other words, as long as everyone thought their home was going to go up in value, they would continue to overspend and accumulate debt, then refinance to consolidate their debt, and ultimately start the cycle over.

Owning a home is a great way to help ensure your financial future while having a stable asset to fall back on as a last resort. However, many people instead simply were using their homes as personal piggy banks that they had constant access to. They would allow it to build up some equity, and then break it open and completely empty it, never allowing the value to accumulate. Meanwhile, after breaking open the bank, in order to afford the increased loan amount, most homeowners gave up their fixed rate loans in exchange for an Adjustable Rate, not thinking ahead and in many cases not properly informed about what will happen when the initial term of their loan is up, and their interest rate jumps.

Although current trends have put many people in financial distress, the current foreclosure trend and cooling market may create a more realistic housing market in the years to follow. In the last few years of the recent boom, home prices shot up an astounding amount, and put the average cost of living per person over the average household income. Now that prices are dropping at an astounding rate, we may reach a point where people can purchase homes without having to resort to obtaining risky financing.

Related Posts
Failure to Close
Time for a Change

Should you have any questions or need further information, please don't hesitate to contact me,(775) 220-1630
Or visit my website at www.SellingNorthernNV.com




Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521



Please rate this post


Source of Information
Publication: Reno Gazette Journal
Title: U.S. foreclosures up 93 percent
Author: Alex Veiga