Tips For Purchasing A Fixer-Upper
Lets start with, finding the right fixer-upper for you!
First decide if you are looking to buy and renovate for your own purposes or to flip a home. If you’re reason is to flip then, it is important to understand that buying a home at a price which will allow a profit.
Foreclosed homes are typically ripe for flipping. However it is important to consider that these homes are owned by banks looking to cut their losses. Some of these financial institutions are often not willing to accept a lower price. These kinds of organizations should be avoided.
Try going for homes that are advertised with phrases like “willing to negotiate,” “all offers considered,” “need to sell” or other similar expressions. This indicates a current owner or bank that wants to sell.
Hiring an experienced real estate agent to work with you through this can help ensure you get the best deal at the best price and do not end up in a money pit.
The Costs to Renovate a Fixer-Upper
Buyers need to look at 3 things; purchase price, renovation costs, expected for sale price.
It goes without saying; the purchase price needs to be as low as possible. It is also a well known fact that repair and renovation costs can be tricky. As a buyer you should be sure that the contract allows for a thorough inspection prior to closing on the deal. This will allow the buyer the chance to hire an inspector and determine exactly what is wrong with the home and get bids on the repairs. Overestimating the repairs and renovations can also insure that the deal will still be profitable.
Final Thoughts Purchasing and Renovating a Fixer-Upper
With a realistic approach, and good financing, buying a home to later flip it is a viable way to make profits in real estate. It simply takes good planning and working with knowledgeable mortgage lenders and experienced contractors that can provide the right guidance for an investor. Other helpful information: 5 FHA Mortgage Quirks EVERY Home Buyer Should Know.
Looking to purchase a fixer-upper? Contact Lake Superior Real Estate today!