Fixer-uppers And Paying Below Market Value
It should go without saying that the overall cost of buying fixeruppers has a direct effect on one’s bottom profit line when it comes time to reselling. Of course the main goal behind the entire process is to buy low and then resell high to make the most profit possible which is why it’s extremely important to never pay market value when buying fixeruppers for the purpose of reselling them.
Understanding Property Values
Without being able to easily determine property values no investor will be able to turn an attractive profit not when purchasing fixeruppers nor when listing and reselling them. Learning how to make property comparisons by utilizing the many tools available in the real estate market today will indeed take a bit of time and plenty of research however the end result is more than worth the effort spent.
Researching the Market
Too many investors make the mistake of relying on the internet word of mouth or on simple photographs in listings when it comes to researching the market and finding fixeruppers that would be worth their investment dollars. To determine whether or not a property is truly worth it you must personally look at it yourself with your own eyes which also applies to looking at potential contractor’s current work that’s done at varying levels and stages of renovations. While a picture may be worth a thousand words in this case seeing something for yourself just can’t be beat.
Many real estate agents rely upon what’s known as a CMA or Comparative Market Analysis when it comes time to determine the value of a property which essentially is a spreadsheet of information that outlines any recent sales within a certain geographical proximity to the property in question.
To create your very own CMA use data only from sales that have already been completed for the truest results rather than those that are still pending or under negotiation and turn to resources such as real estate appraisers the local tax assessor and county clerk’s offices as well as the area’s local real estate brokers.
Estimating All Costs
Estimating all costs of your fixerupper projects includes first the acquisition costs which are the property’s purchase price any taxes that haven’t been paid and the origination fees as well as the amount to renovate the home such as the cost of a new roof new carpeting paint or plumbing and electrical repairs.
Also never make the mistake of forgetting about any hidden costs and you can rest assured that there are at least one or two you hadn’t counted on at the beginning of your real estate ventures. The property will need to have the proper inspections as well as ensuring that all necessary documents are in order like the certificate of occupancy or building surveys.
Having an accurate and realistic picture of the total costs involved is really the only way to guarantee you’ll be protecting your money and enjoying a healthy return on your investments when buying and reselling fixeruppers for profit.
About the writer:nbsp;nbsp;Sal Vannutini is the author of ” The 8 Power Profit Secrets To Making More Money With Less Risk In Real Estate ” a free strategy report for investors. Get your complimentary
copy at www.FastFixerUpperProfits.com today.
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