Real Estate Investing Blog - DiscountedProperties.com

While many of the houses on the market have the potential to be profitable investments, you’ll make much more money if you concentrate your efforts on finding a fixer upper for sale. There are a couple of good reasons for this: Most people in the market for a home would rather buy something that doesn’t need work – and properties that need work are often owned by people with a shortage of extra cash.

If you purchase a fixer upper for sale, you can pretty regularly make some quick and easy repairs to the property and turn it for a quick profit. It may seem hard to believe, but a quick coat of paint, new carpet, and a thorough cleaning can add thousands of dollars to the value of a fixer upper for sale.

Since most people are looking for a home that’s in move-in condition, there’s less demand for a fixer upper for sale. Less demand means that anyone willing to take the time to make a few repairs can turn a little effort into thousands of dollars in extra profit.

By concentrating your efforts on the fixer upper for sale real estate investing market, you can also avoid paying real estate commissions in many cases. The reason? There are so many homes for sale that are ready to be lived in that a lot of real estate brokers will insist that repairs be made before they’ll consider listing a property.

This leaves the door to greater profitability wide open for an investor to pick up a fixer upper for sale without having to pay real estate commissions – which means even more money you can put in your pocket.

Are you thinking about how to invest in real estate? Congratulations and welcome to a fun and potentially lucrative industry. But before you jump into how to invest in real estate, make sure you know what exactly you want to do within the industry. There are plenty of choices and some of you will want to specialize in a particular niche while others may want to explore a variety of ways in how to invest in real estate.

Let’s discuss a few options:

• Flipping Houses – One of the most popular ways on how to invest in real estate is to flip houses. This basically means you are purchasing a home at a low cost and then selling it for a profit. There are three main ways this is done. First, you find a house for a bargain because the seller is highly motivated to get rid of the house quickly. This could be for an impending move or because of personal financial issues. Another option is to find foreclosure properties. Often the bank will let a house go for under market value to make themselves whole. The third option is to find a house that needs fixing up.

• Fixer Upper Homes – This brings us to one of the other most popular ways on how to invest in real estate. Fixer upper homes are usually thought of under the same umbrella as flipping houses but because it is a specialized niche, we should discuss it separately as it has its own unique issues. If you are considering fixer upper homes as how to invest in real estate, make sure you have the skills, capital and means to get the job done quickly, efficiently and at the lowest cost available. You need to consider your initial sales price as well as the additional money and time it will take to get the house improved and livable. Then, you need to be sure you can sell the property in a short amount of time and at a profit from your total investment.

• Rental Properties – While this can be a great way on how to invest in real estate, it also has its share of headaches. The initial investment calculations should take into consideration the difference between your investment in the property and your potential income from rentals. But, bear in mind that when using rental property as how to invest in real estate, you have certain responsibilities and hands-on concerns to deal with. You may not be able to rent the home immediately. You will have to deal with advertising the rental. You will have to screen potential renters. You will have to spend money on any major repairs or maintenance in the home. You may have to deal with the nightmare of eviction proceedings if the tenants default on the lease. This can either be done by you personally or via a property management company that charges a fee.

Regardless of what you decide on how to invest in real estate there are pros and cons. You just need to decide which ones you find most appealing. You also need to consider which ones will be most profitable for you and often that is taken on a case by case basis.

I know it can be really tempting to want to buy fixer upper homes. In today’s market especially when it is a buyer’s market more people who have some investment capital are looking to get into real estate. Real estate can be a lucrative investment if you know what you are doing but it can also spell disaster for someone who is not prepared and informed.

In today’s real estate crisis there is an abundance of homes that are empty and even more that are for sale due to foreclosure. But, you have to be careful when buying these homes because if they are fixer upper homes, you may be biting off more than you can chew. Many foreclosures and homes that have been empty for awhile will need some repair in order to get it livable again.

The advantage of fixer upper homes is that you can typically get into the house at a steal. You will likely pay well below typical market price. But, there’s a catch to that. The first thing you should do before buying fixer upper homes is to research, research, research! You need to know what typical homes in the area are selling for in prime condition. Find comparable homes that are not fixer upper homes and research their selling price in the market. This will give you a good basis for comparison.

Then, you will need to do a thorough inspection of the home and list everything you intend to do to move it from fixer upper homes to prime real estate. In order to do this you will need one of two things:

1. A lot of experience in construction to be able to effectively estimate the cost of all repairs and improvements or…

2. A solid, reliable contractor who will be able to get you a firm quote on all the necessary repairs and improvements on the house.

Once you have the price it will cost for the repairs, add in a cushion for unexpected contingencies plus an estimate for the time the home will be vacant and not generating income. Calculating these costs along with the asking price of the home will give you a good indication of what your net investment is going to be in the fixer upper homes. Is that less than the going rate of comparable homes in the area? Perfect, go for it! Is it more? You might want to rethink this particular property…or renegotiate the selling price.

So, let’s say you go through with the purchase of the fixer upper homes. You now have the task of putting into practice your research on the repairs, maintenance and improvements for the home. Keep in mind that the faster and more efficiently you get this done, the faster you can begin seeing a return on your investment. You can do this by renting out the house or flipping it to sell it at a profit. Beware, though of construction delays and those hidden problems that weren’t accounted for in the original bid.

If you know what you’re doing and have researched the area well, fixer upper homes can be a great investment.

Just be careful and good luck!

If you are considering purchasing handy man specials you likely already are aware how lucrative an investment it can be.  You can purchase handy man specials at a low cost because it needs some repair and then sell the handy man specials for a profit.  Sometimes this profit can be quite significant.  When looking for handy man specials, try to find ones that need only minor repairs in order to make the handy man specials more appealing to buyers.  This will minimize the amount of additional cash is needed and maximize your profit margin.

When looking for handy man specials do a walk through of the house and start planning on what improvements should be made in order to sell the house for a profit.  Make a list of the all needed in the handy man specials and calculate the total cost of these repairs.  Then, once you have that price plus the asking price, consider the potential sale price for the handy man specials once all repairs and improvements have been made.  If your estimated initial investment is lower than the estimated sale price of the handy man specials, you are likely looking at an investment that will yield a profitable return.

Another consideration for handy man specials is how long the handy man specials will be on the market after repairs are made.  You want to be sure to minimize this time period as much as possible so you are not sinking more money into making house payments and interest.  The trick is to get the handy man specials into an improved state as quickly as possible then sell it as quickly as possible to minimize your investment and maximize your profit margin.  Make sure you have the experience and available cash to make all the repairs on the handy man specials that are needed.

To calculate your profit on the handy man specials, you will need to consider a few factors.  Your initial investment costs on the handy man specials which will include total purchase price including interest paid, cost of improvements on the handy man specials and your time.  The difference between that and the sale price of the handy man specials less any closing costs and fees will be the amount of profit made on the handy man specials.  The more profit you make on the handy man specials the more liable you are to repeat the process.  If you are successful at flipping houses, you can find you are making a lot of money with handy man specials.