Fixer upper homes are some of the hottest deals for sale in the real estate market today. Their affordable prices and the many choices available make them highly favored among real property investors and private homebuyers alike. Do you know what fixer-uppers are? Do you know how to find the best ones? Do you know what to look for to make sure they really are an amazing bargain and not a bad risk? We will cover all of these questions for you to help make you more educated on buying fixer-uppers.
What are Fixer Uppers?
Fixer uppers are homes that can be purchased far below retail market value due to distressed circumstances attached to the property and their need for significant repairs. Such properties are perfect for those who have inadequate means of purchasing homes in a traditional manner, such as those with poor credit scores or limited funds. Once fixer uppers are purchased, the new owner either takes the time to make the necessary repairs themselves or they hire a local handyman or contractor to make all the required repairs to make it a beautiful place to live.
Often times the investor will choose to either resell the fixer-upper for a profit, hold onto it as a rental, or live in it personally; enjoying the finished product they artfully created. This is where you, as an investor or a regular home buyer, can find amazing deals, without the need of a real estate agent. But how do you find fixer uppers?
Locating Great Fixer-Uppers
Locating fixer-uppers are not as hard to find as one might think. You just need to be a little creative in your thinking, that's all. Traditionally, if a homebuyer wants to buy a home they would simply go to a real estate agent and tell him what they are looking for. Then the agent usually will do a search through their local multiple listing service (MLS) to see what is "on the market" to show their new client. Unfortunately, you most likely won't find the fixer-uppers you want located on the MLS.
Fixer uppers are more likely going to be found advertised in other places on the Internet by people that are investors who did a ton of creative searching to uncover these great deals. Or, they are being sold by For Sale by Owner (FSBO) who doesn't want to use a local real estate agent to help sell their distressed property. When on the Internet you can locate fixer uppers by using the key words in a search engine such as: fixer upper, fixer-uppers La Verne CA., fixer uppers near Corona CA., fixer uppers or fixer-upper homes for sale.
Oftentimes investors have their own network of websites where they list their deals with pictures and descriptions, specifically designed to help buyers easily locate them. They are also listed in places like CraigsList, Trulia, Oodle and DotHomes. If you are an investor looking for a fixer upper to do the repairs yourself, you would buy it wholesale from the existing investor who has control of the property. If you are a regular buyer looking for an already competed fixer-upper, also known as a rehabbed property, you too can find these deals through this same network of investor websites or other popular listing sites like the ones previously mentioned.
Are Fixer Uppers Risky Buys?
Fixer-uppers, or handyman specials, are sold as-is, which means that the original seller does not have any desire to make any necessary repairs on the property prior to selling it. With this understanding, the seller knows that their selling price would be far below what the typical market price would be for the property if it was all rehabbed. While this can look very attractive to a buyer, this dynamic could be risky for a regular buyer.
There might be huge hidden expenses, such as poor structural work in the walls, cracked or deteriorating foundations, roof replacement, or plumbing system issues. However, at the same time, there can be a great opportunity for an experienced investor who knows what to look for. That is why it is very advantageous for any buyer to look for fixer-uppers through investors, since they have already done the screening and the buyer can be informed of the types of repairs and costs needed to complete them.
Other advantages - Fixer uppers can provide great savings in terms of their value pricing. In addition, it offers buyers an opportunity to renovate according to personal style and requirements. For those who have the skills and knowledge to do so, renovating the home provides a wonderful satisfaction at completion. A final benefit of purchasing fixer uppers, and perhaps the most valuable, is the amazing creativity and flexibility investors who control these properties demonstrate when it comes to financial arrangements. If you are a person with a poor credit score or with a small nest egg to purchase your new home with, investors have shown very creative ways to help you get into your fixer upper.
While there may be certain risks when buying any home, including fixer-uppers, the advantages are very significant when buying from an experienced investor. If you are a person who wants to save a lot of money, have your hand involved in making your next home personalized to your liking and needs, and may need creative financing when regular banks deny you a loan, buying a fixer upper from an experienced real estate investor may be the perfect next home to buy.
Dan Sojka is owner and president of DNS Investments, LLC; a real estate investment company which buys and sells fixer-uppers locally in Southern California and is part of a network of investor partners nationwide. You may contact him through his website at http://www.DNSsellshomes.com
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