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Fixer Uppers: Dont Make This Mistake
Making money with "fixer-uppers" isn't about repairing drywall or planting flowers. It's about using the right approach from the start. A Big Real Estate Mistake Many people buy and sell a fixer-upper like this: They buy a house, fix it up, then add some amount (say $10,000) that's in their head onto their costs. Then they put the house up for sale for this price. This is so wrong. Would you buy a house according to what the seller has into it? Of course not. You look at what similar houses are selling for to determine the value. So if you have $110,000 into a fixer-upper and similar homes are selling for $105,000, how much can you get? It doesn't have anything to do with what you've spent, does it? The Fixer-Upper Formula 1. Determine how much the house wil sell for when you're done fixing it up. Ask an appraiser for help, or look at what similar houses have sold for (not list prices). What it's likely to sell for is the only meaningful definition of value when dealing with fixer-uppers. 2. Calculate all costs: buying costs, including closing, fees, etc.; repair costs; carrying costs, including interest on loans used to buy the house, property taxes, insurance; selling costs, including commissions, fees, title policy, etc. Subtract costs from the expected sales price. 3. Now subtract a profit that makes it all worth the effort. This gives you the highest price you can pay for the house. Walk away if you can't get it for this price or less. Offer several thousand less, of course, to give yourself negotiating room. An Example: You find a fixer-upper, and determine you can get $98,000 for it when it's done. The expenses of buying will be $2,000. You get repair estimates of $8,000. Carrying costs will be $2,500. The sales commission will be $6,500. Other closing costs will be around $1,500. You figure $1,500 for "unexpected" costs. Finally, you want $10,000 for your effort. Subtracting all of that from your expected sales price leaves $66,000. This is the most you can pay, if you want a safe real estate investment. You offer $61,000, and walk away if you and the seller can't settle on something under $66,000. Always start at the end (the eventual sales price) and work your way back. This is the right way to safely invest in fixer-uppers. Steve Gillman has invested in mobile homes and other real estate for years. To learn more, and to see a photo of a beautiful house (not a mobile) he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
MORE RESOURCES: Jeff Bezos' secret $190M Seattle real estate empire revealed Business Insider Real Estate Transfers ~ through Nov. 23 The Bedford Citizen Francisco Real Estate: Why Homeowners are Selling at a Loss The San Francisco Standard New Legislation Proposes to Take Wall Street Out of the Housing Market The New York Times Dodge County real estate transfers Fremont Tribune RNR Real Estate Briefs – Texas & more Realty News Report Eastern U.P. real estate remains stable despite shifting national trends Sault Ste. Marie Evening News Real estate transfers: Dec. 8, 2023 RiverheadLOCAL Real Estate Transfers: August 1 - 15, 2023 The Owensboro Times Real Estate Sales Include Wealth Management Center Complex, Ranch For Vets Jamestown Post Journal Real estate: Foreign LLC buys Pizza Hut property in Perry Township Massillon Independent How a Kitchen Refresh Can Help Close a Real Estate Deal How a team approach brings sales, success Behind The Hedges Real estate records, 12/10 Lincoln Journal Star McColly Real Estate Holiday Celebration 2023 | LaPorteCounty.Life LaPorteCounty Life Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties Dec. 10, 2023 edition MassLive.com OT Real Estate Spotlight of the Week: 4404 Fairbairn Court The Owensboro Times PTK spotlight: 50 commercial real estate projects to know in 2024 Arizona Big Media Real Estate Transactions for Dec. 9-10 | News, Sports, Jobs Nashua Telegraph XPO buys Yellow's Real Estate For $870 Million The Real Deal I'm a Real Estate Investor: Don't Pay Off Student Loan Debt -- Buy Properties Instead GOBankingRates NJ real estate: $20M Alpine mansion for sale. See listing NorthJersey.com Routt County real estate sales surpass $13.4M from Dec. 1-7 Steamboat Pilot & Today Chad Tredway Rejoins JP Morgan Asset Management as Head of Real Estate Americas | Chief Investment Officer Chief Investment Officer Real Estate Roundup, Retail Theft Arrests The Eastsider LA Jef Conn: From Lubbock commercial real estate to Texas Chairman of the Board Texas REALTORS KLBK | KAMC | EverythingLubbock.com Bezos Leaving Behind A Massive Seattle Real Estate Portfolio As He And Lauren Sanchez Plan Move Miami Yahoo Finance Charlottesville real estate investor Phaedrus Acgtblu dead in apparent homicide - The Daily Progress A Strong 2024 Market? Get a Real Estate Coach Now | Florida Realtors The Pickleball Courts Outside Our Townhouse Are TOO LOUD! The New York Times Greenwich Real Estate Inventory to Hit Zero in March 2024 Greenwich Sentinel Bay Area real estate: Where rent or mortgages hurt residents most San Francisco Chronicle Chad Tredway Rejoins J.P. Morgan as Head of Real Estate Americas, J.P. Morgan Asset Management PR Newswire Real Estate Property Transfers in Franklin for November 13, 2023 Williamson Source What's a Real-Estate Fund Worth? Depends on Who's Doing the Math The Wall Street Journal Coral Springs Real Estate Market Defies Economic Predictions • Coral Springs Talk Coral Springs Talk Is Jeff Bezos shopping for real estate in Palm Beach? The New York Post thinks he is Palm Beach Daily News Pacaso, The Real Estate Marketplace, Releases Report That Identifies Fast-Growing Luxury Second Home Markets Crowdfund Insider Could Bitcoin Cause Real Estate Prices to Collapse? DataDrivenInvestor Real estate news: DoubleTree near South Coast Plaza, JWA getting a $12 million makeover - OCRegister Wheeler Development exec balances careers in real estate, folk music - Crain's Grand Rapids Business Wheeler Development exec balances careers in real estate, folk music Crain's Grand Rapids Business Viral New Berlin jungle home back on market after sale fell through: Open House - Milwaukee Business Journal The Business Journals New Castle News | Newspaper Ads | Classifieds | Real Estate for Sale | BERKSHIRE HATHAWAY Home Services The ... New Castle News Ares Banks $3.3 Billion to Buy Real-Estate Fund Assets - WSJ The Wall Street Journal Valley real estate community steps up to support Operation Santa Claus ABC15 Arizona in Phoenix Apply for the Longtime Owner Occupants Program (LOOP) | Services Philadelphia Water Department Opinion | Real-Estate Collusion Is Finally Coming to an End The Wall Street Journal REAL ESTATE | VIDEO | Charming and inviting 2-story home in West Bend, WI | By Wendy Wendorf, Homestead Realty washingtoncountyinsider.com San Francisco's Russian Hill Mansion Sells for Half Its Asking Price Amid Real Estate Shift Hoodline Canadian Apartment Properties Real Estate Investment Trust Un stock rises Friday, outperforms market MarketWatch What Accreditation Shift Could Mean for Real Estate Investors Kiplinger's Personal Finance New York City Law Against Body-Size Discrimination: What the Residential Real Estate Industry Needs to Know Jackson Lewis Jeff Bezos's Homes: Inside His More Than $500 Million Property Portfolio Architectural Digest 20 Young Leaders Transforming the Real-Estate Industry in 2023 Business Insider Are Virtual Tours Still Worth It in Real Estate? Evidence from 75000 Home Sales Harvard Business School Working Knowledge |
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