There are many people who get into real estate investing and who, in the process, just follow a simple formula which is using the well tried and certainly most tested way of doing business in real estate and that is to buy homes being put up for sale by owners who are in distress. In such instances, they are able to snap up distress properties at rock bottom prices and then they simply fix up the properties with a view to selling them further at a higher price and in the process make a tidy sum of money. As a matter of fact, it has been found that those who have used such simple strategies over the long term have succeeded so much that they have made enough money to turn into millionaires.
Different Reasons Why Distress Homes Are Put Up For Sale
The problem of course that one has to contend with at the very outset is that of learning how to find fixer-uppers. In this regard it should be mentioned that when a homeowner becomes distressed it may cause them to cease to properly maintain their properties and often, they may even end up falling behind in making the payments on their properties. What’s more, both buyers and sellers are known to have a number of different reasons why they get into real estate investing in fixer-uppers though common reasons include losing a job or going through a divorce and even illnesses and alcohol abuse can cause a seller to become distressed.
Whatever the reason why a homeowner becomes distressed, there is no doubt that the real loser in the equation is the property which will suffer because it won’t be properly maintained and payments on it too will start to be skipped and thus it becomes an ideal candidate for being sold as part of a fixer-upper strategy. And, among the most lucrative real estate investing opportunities that you will come across when it concerns fixer uppers are homes that are completely rundown, owned by a seller who is in the process of divorcing their spouse and those who can’t keep up with their mortgage payments.
Still, homes that are very ugly and which need fixing are really quite difficult to sell off because buyers for such homes are rather limited and not easy to convince to buy such type of homes. Obviously, homeowners prefer to put their real estate investing money in homes that don’t need much repair work because having to repair a home or upgrade it is not something a prospective homeowner will want when purchasing a home.
To be sure, most homebuyers need a property that is a home and not something to invest their hard-earned money in. Furthermore, when you are looking for fixer-uppers with real estate investing in mind you will also have to have contractors available who can make a home inhabitable with just a little work. Once you are sure that you want a contractor to repair and upgrade your home, you can then prospect for homes that are available at bargain prices.
Typically, you should scout the advertisements that have terms such as as-is or fixer-upper or even handyman’s special or other similar terms that show you that the home requires some repair. Even a local real estate agent can point you in the right direction. If you stick in this line long enough, people will then come to understand that you are in the fixer-upper line of real estate investing and will then contact you with suitable and tempting fixer-upper deals.
Having located a suitable property, you then need to be sure about what the problem with the home is and then think of ways to solve such problems. Often, the problem may have a lot to do with financial constrains rather than requiring to physically repair the home and if such is the case, you can then get an even lower sales price for the property in question. However, be aware that fixer-uppers in real estate investing is a line in which you must always tread with great care and caution because even a small mistake can lead to disastrous consequences.
The bottom line is that you must first of all put together a good team and to also do home buying in a very careful and conservative manner. In addition, you should also be prepared to pay whatever it takes to repair the home and once you understand and act properly on these parameters you will find that fixer upper in real estate investing can fetch you plenty of money.