HOW TO INVEST IN
A licensed real estate agent or appraiser can help you learn about the area’s average rents. Work the numbers to determine if it makes sense to buy the home knowing how much rent you can charge. Is it enough to cover your monthly mortgage payments, 1/12th of the real estate taxes and home insurance, plus any costs to maintain or fix the home?
Leveraging a house-hacking approach? If you rent out rooms but plan to live in the house, you'll also need to determine if the rental income you'll earn is sufficient.
If not, you may want to look for a different home. Investing in a home that doesn’t allow high enough rents leaves you upside down from the start.
A licensed real estate agent or appraiser can help you learn about the area’s average rents. Work the numbers to determine if it makes sense to buy the home knowing how much rent you can charge. Is it enough to cover your monthly mortgage payments, 1/12th of the real estate taxes and home insurance, plus any costs to maintain or fix the home?
Leveraging a house-hacking approach? If you rent out rooms but plan to live in the house, you'll also need to determine if the rental income you'll earn is sufficient.
If not, you may want to look for a different home. Investing in a home that doesn’t allow high enough rents leaves you upside down from the start.
Our first offer? Accepted. Jen simplified everything and helped coordinate every aspect: She worked tirelessly on our behalf, took our late-night calls, and she still responds to my confused texts weeks later. I can't recommend her enough!
Christopher D.
I want to utilize the type of Realtor® who has my best interests as her focus. I cannot rate her highly enough. She is fantastic, she'll help you fnd your perfect home, and keep you sane and realistic during this process even though it sometimes feels crazy. Thank you, Jen!
Olivia M.
a fixer-upper can be a smart way to get started in the business and earn good money at the same time. Buying and selling fixer-uppers, when done with discretion and with good buying judgment, can prove to be a good way to earn money without having to invest heavily–especially when done right. When starting out in a fixer-upper business, you will first have to consider many things. After learning what you can, then proceed to drawing realistic expectations and plans to put your business into action. From here, you can then set goals and work on plans to meet those goals. While fixer upper business is attractive, high-income ventures, if not done properly, can drive one into serious debt if not done properly. What is a Fixer Upper? For those unacquainted with the term, fixer uppers is real estate bought from distressed home owners, fixed up (hence the term fixer upper) and sold at premium prices. In away it is like finding a jewel in the rough, polishing it, and sending it back to the market for a good price. Many have gone on to be millionaires from this kind of venture. If you look at it, theoretically, it makes a lot of sense. However, no matter how attractive it may seem to be, this type of business isn't without its risks. Fixer Uppers involve a lot of money, assumptions and risks. You assume that the real estate you are buying can be fixed up and sold at a higher price. You also assume that the house can be brought up to a state where it is attractive to those seeking a home to move into.If you put all these intangibles together, you will find that the risk may be a little too high for some people. In fact, this is the reason that these ventures are high-profit ones, they are also high risk.You can, however, reduce this risk by doing good background studies, setting realistic goals, drawing up good plans, and making calculated risks. Here are some good tips on building a good fixer upper business venture.
Fix and Flip
A fixer-upper can be a smart way to get started in the business and earn good money at the same time. Buying and selling fixer-uppers, when done with discretion and with good buying judgment, can prove to be a good way to earn money without having to invest heavily–especially when done right. While the fixer upper business is attractive and can be a high-income venture, if not done properly, it can drive one into serious debt. What is a Fixer Upper? For those unacquainted with the term, "fixer upper" is real estate bought from distressed homeowners, fixed up (hence the term fixer upper) and sold at a premium price. It is like finding a jewel in the rough, polishing it, and sending it back to the market for a good price. Many have gone on to be millionaires from this kind of venture. If you look at it, theoretically, it makes a lot of sense. However, no matter how attractive it may seem to be, this type of business isn't without its risks. Fixer Uppers involve a lot of money, assumptions and risks. You assume that the real estate you are buying can be fixed up and sold at a higher price. You also assume that the house can be brought up to a state where it is attractive to those seeking a home to move into. If you put all these intangibles together, you will find that the risk may be a little too high for some people. In fact, this is the reason that these ventures are high-profit ones, they are also high risk. You can, however, reduce this risk by doing good background studies, setting realistic goals, drawing up good plans, and making calculated risks.
Buy and Hold (instead of sell or keep)
With some fixer uppers, you may decide to fix it up and keep it, instead of selling it. This is more along the lines of the BRRR method (buy, renovate, refinance, repeat). If you stand to earn more if you hold the property for a while, then do so. This is a great strategy for building a real estate portfolio that uses leverage to continue to add to your holdings.
With some fixer uppers, you may decide to fix it up and keep it, instead of selling it. This is more along the lines of the BRRR method (buy, renovate, refinance, repeat). If you stand to earn more if you hold the property for a while, then do so. This is a great strategy for building a real estate portfolio that uses leverage to continue to add to your holdings.
Tearing down the existing structure to build something new- this can be a very rewarding venture if you have the right team in place. You'll need a team of engineers, permitting experts, architects, builders and realtors to get this plan off the ground!
When starting out in a fixer-upper business, you will first have to consider many things. It is never indicative to success to jump into any business venture prematurely and without proper planning. You will first have to learn as much as you can about the business before jumping on the bandwagon. Depending on how your business is financed, buying and selling these properties may involve very little or a lot of money. One good way to leverage your interests is to employ the use of other people's money and resources. Most people think that success in this field of business involves a lot of hard work. Yes, hard work is an essential element to success in this field. However, knowledge is also important. An example of how good strategies can help your success is to understand how leveraging can make dealing with fixer uppers profitable and easier on the budget. The truth of the matter here is that you can get other's money to work for you. You can earn more without plunking your cash in as investment. While it seems counterintuitive–who, in his right mind, would ever hope to get good returns on investments when he or she hasn't put in any investments at all, one must think–it truly is possible to get other people's money, time, and expertise to work for your own benefit. Using Other People's ResourcesOne way to think of OPM (Other People's Money) working for your benefit is think how most people expect to make earnings from fixer upper ventures. First off, most people would want to purchase the property itself. They could do this through a couple of ways. They could purchase the land out of their savings or take out loans to pay for the property. This method, while good in itself, has some limitations. If you use your savings to buy property for a venture–and for some unforeseen reason, the venture goes bust and you are unable to sell the property, then you may have practically thrown your lifesavings out the window. You can make other people's money work for you here. For example, what if you take a 95% seller's financing plan. This means you only pay for around 5% of the property's value. Then, you proceed to lease the area to tenants. The money you make from the rentals can be used to pay for the loan.
In the end, theoretically speaking, you would have only paid 5% cold cash for the property, and made the property itself–with the help of its tenants–pay for the property the rest of the way. If the property costs $100,000, then that means you only pay $5,000 to own the property after some time–with extra income to boot. Not a bad proposition now, is it? This is, in effect, having other people pay for something you will own in the future, and is one of the smart ways to make investments. You could also use other people's resources such as time and expertise when trying to make money from fixer upper homes. For example, if you aren't well-versed in renovating properties, why not have other people do it, and make a profit at the same time. How? Take for example a home that is sold by a distressed owner–house unkempt, needing repairs. Now, as a fixer upper yourself, the first thing you would want to do is think of how you can purchase and renovate the place, and then sell it on the market. But what if, instead, you make plans to purchase the property and then show the property to other fixer uppers who may want to the take the property from your hands and do the hard work of renovating and selling the property on the market. You can then sell the property again to this partner and have them renovate and sell the property. Just don't forget to take your profit from the pay you will be asking of them for the property! This, in technical terms, is called flipping. If you look at it closely, you will have had made somewhere close to what most people in the same business make without even having to do the hard work required of them–remodeling, renovating, and marketing. The technique there, however, is that you will have to be aware of how to choose potentially great properties. If you have an eye for that then it won't be much of a problem. If you do this, you will have effectively used other people's expertise and time in helping you make a good profit. This is a great way to leverage other's assets to work for your advantage
A Fixer Upper business venture could very well be your way out of the 9-5 day job. Not only does it hold the possibility of earning more, it also gives you a good opportunity to manage your own time, travel and meet new people. Plus, the extra money doesn't hurt. Those that have become rich as a result of fixer uppers testify to the fact that while it can be a little risky, especially at first, it could be well worth the sacrifice and the risk. Itis a very attractive, well-earning business with a very good rate of return. Depending on how your business is financed, buying and selling properties may involve either very little or a lot of money. One good way to leverage your interest is to employ the use of other people's money. Any successful fixer upper will tell you that the secret to success is the knack to find good properties that are seemingly un-sellable, but when fixed up can actually fetch more than its weight in gold. While some have an almost preternatural ability to nose up such properties, there are ways that everyone can learn to sniff out good property buys.
The term "doghouse" comes from homes that aren't structurally damaged, only unkempt and needing cosmetic upkeep. Some homeowners have good sound homes but neglect to do simple things to keep the home maintained, or the home may be in serious disrepair. These houses may be in such a condition because the owners are both lazy, in dire financial straits and unable to maintain their homes, or planning on moving anyway. In such a case you will want to inspect the home closer, you could be in for a pleasant surprise. Owners of such houses find it hard to sell these houses even if there is only minimal damage. This is because they are unattractive and people tend to have the inability to look beyond minor faults to find a good sturdy house standing in front of them.
Do a little research on the neighborhood to find out if the area is a booming area worthy of prime property prices. Some properties, no matter how wonderful they may look like, can't fetch good prices because they are in bad neighborhoods, or are in areas that are underdeveloped. Ask around the neighborhood for signs of improvement in the last few years. Check out the amenities of the area, the community support, and the general impression of other people on the neighborhood.
Good house hunters are able to catch a good neighborhood on the rise, just along the time when property space is cheap and right before the area experiences a boom in property prices. Other things to ask about are crime rates, accessibility, proximity to hospitals, schools, and other community fixtures.
If you have contacts, it would be nice to know the government's plans for the area. If the government plans to develop the area, create higher class amenities and housing then there could be a sudden surge in the prices in the area. This is then a good time to catch the wave before prices skyrocket. You could also research plans for companies and consortiums to develop malls, transportation, and other facilities. These could radically affect the prices in the area. If you are able to anticipate this ahead of time then you are in line to make good money from this business.
Crime and community is a major factor in the choice of a home. Make sure that the properties you put your sights on have low crime rates and have a strong sense of community. This means that the people in these areas should get along with each other. This is a very important aspect of the choice of home for most people.
Remember that beauty is in the eye of the beholder. So a house that seems absolutely wonderful to you doesn't necessarily mean it's similarly perceived by others. Choose a fixer-upper that appeals to your mind, heart and pockets! Avoid choosing one with a market value that's equivalent to your total budget. If you do, you'll have no money left for repair and you might end up with a home that sells lower than its original and expected value. REMEMBER THE 4 R'S Let's say that you've already chosen a fixer-upper to buy and you're just waiting for the deal to close. In the meantime, take a tour of the house and try to identify its flaws. Keep the 4 important R‟s in mind as you walk from room to room–remodeling, repairs, renovating and refurbishing. Each one is different from another and there's a chance that you might make use of all of them later on. It's better to be prepared beforehand so you know how to allocate your budget appropriately.
Unless you're a real estate expert yourself, it's better to hire a qualified individual for a day and ask him which aspects of the house should be repaired or modified in someway. Accompany him from room to room and write down everything he says. Don't hesitate to ask questions because keeping mum at the wrong time may prove to be a costly mistake later on! It's very important to be able to get a full structural survey of the house while you're with your hired expert. The survey shall serve as your guideline or blueprints when you start reinstating the house to its original beauty.
A fixer-upper may not benefit from the expert eye of a real estate professional. It must also be looked over by other experts before it can be fully judged as functional and sellable. Start with an electrician. Ask him if each and every outlet is currently working and if the house has any faulty wiring. If it's presently without any electricity, ask the electrician how much it would cost to have the house wired. If you're particularly concerned with the environment, you can also ask the electrician to survey the house and have him tell you what you can do to make it an energy efficient home. Lastly, get an engineer to view the house. With the trail of disaster left by super hurricanes still printed indelibly in our minds, you can't blame homeowners if they express concern about the stability and the foundation of the home. Ask the engineer to estimate up to what magnitude on the Richter scale the house is able to survive.
You can never be too sure that you haven't overlooked anything about the house. And since you can't bring your investment home, the next best thing to do is take as many photos as you can of each room of the house. Take at least four photos for every room(one for each side). Remember to set the size of photos to its maximum capability. Take an extra memory card just in case you run out of memory. This way, you'll be able to study each photo in full-blown detail. Get a friend to look over the photos with you because four eyes work better than two.
The last thing you should do is set up a meeting with your accountant, financial advisor, bank manager or whoever it is that gives you advice about your finances. Explain the present state of the house and leave no stones unturned. Seek their wisdom and ask specifically up to how much you should be willing to spend on the house and how much to sell it for. Keep these tips in mind and you'll surely end up with a beautiful swan of a home.
Before you touch even one object or take one brick out of the kitchen, consider first how you plan on marketing the house. Consider the house's size. Consider the neighborhood. Is it more suited to become a family home, an apartment or a bachelor's pad? The answer to this question will enable you to learn as well what type of kitchen would be best to use or create. A bachelor's pad, for instance, would only need a simple but functional kitchen–if the kitchen area is too big, you should consider making the area smaller if your budget allows. A family home, however, would need lots and lots of space in the kitchen because this is one of the communal spots of the house and where everybody gathers for some quality family time.
Keep in mind that those questions are completely different but you have to reach a compromise between the answers to both questions. It's more difficult to save money when redesigning or renovating a kitchen than a bedroom. There are more accessories available to make a bedroom or even a living room more beautiful for a relatively small amount. Kitchen accessories, however, are comparatively limited and only few of the mare priced cheaply.
If, for any reason, you are subject to time constraints, you need to consider this while making remodeling plans. How long do you think it will take you to accomplish your plans? If you are in need of contractors, have them give you an estimate on the number of days they need in order to complete their job. If you are going to order materials or supplies, ask how long it will take to deliver them to your home. Give your project allowance for delays or problems.
Some fixer uppers are homes that need a moderate number of home repairs generally not requiring special knowledge or expertise on your part. Fixer upper homes can be excellent bargains when the “asking price” is significantly lower than comparable homes nearby but in good or excellent condition. A fixer upper needing a cosmetic fix-up can be a great property. They generally need some repainting outside and inside (paint can do a lot of wonders), floor refinishing or new carpets, new lighting fixtures, little repairs, complete cleanup and landscaping. If the home necessitates massive repairs such as electrical and plumbing problems that usually are expensive, it will slash your profit back or at worst, eliminate it. Before purchasing a house you believe is an effortless fixer upper, a professional home inspection should be considered because the inspector can provide you an accurate idea of what existing problems the home has and what repairs are needed as well as an approximate repair cost. Here are frequently found fixer upper defects that might need your attention:
These defects may require expensive professional repair and may go unnoticed. Cracked “heat-exchanger” in the heating system, faulty wiring, termite damage and safety and health problems like lead accumulation, water pipes as well as asbestos insulation are common physical flaws that you can't see immediately. Indications of these hidden problems are as follows:
A home inspection from a professional home inspection can cost about $300-$700 dollars depending on the kind of property, location, square footage, etc. Professional home inspectors can make certain that all major systems (air conditioning, plumbing, and furnace) are working properly or they can pinpoint defects to you because these kinds of repairs will cost you a great deal of money. However, do keep in mind that major repairing problems don't automatically indicate that you shouldn't purchase the fixer upper home, because they can and should be added in the home's price negotiations. A good fixer upper seller or realtor will and can factor in said considerations or concerns and you possibly can purchase the home for even less if you put it clearly that you will be responsible for the repair or replacements. Just be careful that you don't get tricked. Never take anybody's word that the plumbing, the furnace or the electrical have no problems at all; you have to make certain.
There's also a decent amount of flexibility when you own real estate. You can decide whether to rent out your property, sell it, subdivide it, rezone it for a different purpose, and so on.
This way, you can respond to changes in the economy in a way that still makes your investment useful.
All of that said, there's also a big note of caution here. Real estate can be a large and expensive undertaking, and as the housing market crash of 2008 illustrated, it's never a sure thing. Especially when it comes to real estate investing for beginners, it's wise to proceed with caution. You don't want to stretch your finances too far before you're ready and end up with debt that you struggle to repay.
Broker Associate | Twelve Rivers Realty
I'm not your typical Realtor. I'm honest and candid. If you need a quick real estate brain or a strong dose of honesty, you’re in the right place. I take pride in being approachable and friendly, and the novel approach of actually giving you what you want -Real answers to questions you’re probably wondering right now. Pair that with award winning sales performance, and you've got a recipe for success.
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Fixer Upper real estate can prove to be a very good business as long as you make the right decisions and put your money in the right places. One of the major decisions you will have to make when dealing with a fixer upper is what to do with the home once you have purchased the property itself. You could either resell it at a higher price, flip it–meaning you resell the house immediately to other fixer uppers who would like a crack at fixing the house up and selling it on the market, or you could have it put on the market as a property for rent. Here are a few things you should know regarding fixer upper homes so that you can make a better decision considering whether a property should be put up for rent instead. The Advantages
Growing up in Michigan, I was lucky enough to experience one part of the Great Lakes. And let me assure you, they are great. As a photojournalist, I have had endless opportunities to travel the world and to see a variety of lakes as well as each of the major oceans. And let me tell you, you will be hard pressed to find water as beautiful as the Great Lakes.
Growing up in Michigan, I was lucky enough to experience one part of the Great Lakes. And let me assure you, they are great. As a photojournalist, I have had endless opportunities to travel the world and to see a variety of lakes as well as each of the major oceans. And let me tell you, you will be hard pressed to find water as beautiful as the Great Lakes.
Sierra Tarahumara, popularly known as Copper Canyon is situated in Mexico. The area is a favorite destination among those seeking an adventurous vacation.
Copper Canyon is one of the six gorges in the area. Although the name suggests that the gorge might have some relevance to copper mining, this is not the case.
Our first offer? Accepted. Jen simplified everything and helped coordinate every aspect: She worked tirelessly on our behalf, took our late-night calls, and she still responds to my confused texts weeks later. I can't recommend her enough!
Christopher D.
I want to utilize the type of Realtor® who has my best interests as her focus. I cannot rate her highly enough. She is fantastic, she'll help you fnd your perfect home, and keep you sane and realistic during this process even though it sometimes feels crazy. Thank you, Jen!
Olivia M.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact Jen today.
