Selecting a “Fixer Upper” that is a Good Value
When a real estate investor considers buying a “fixer-upper” property, they need to have a keen eye about what the property needs to put it back to a good marketable quality.
There is a Big Difference Between Surface and Structural Work Needed
A property may be totally trashed because of tenant abuse and management neglect. The place may be filled with garbage. Holes may be knocked in many walls. To the untrained eye, this type of place looks like a major disaster.
Yet, if the heating and air conditioning systems are still working in good order, there are no foundation breaks, and the roof does not leak, this may be a fixer-upper value. In other words, if a property only needs cleaning out the trash, fixing the holes in the walls, and painting as a cosmetic repair, it could be a great value if the price is right.
The Key Is to Buy Hidden Value
A seasoned professional real estate invest can simply look at the conditions of a property check the main systems for proper functioning, and then on-the-spot do a rough calculation about what it will cost to bring a “fixer-upper” property back to salable standards at a good price.
Real Life Examples
• A foreclosed property is left full of junk, because the previous owners waited until the last minute to move. The house is full of unwanted stuff, yet, nevertheless it is otherwise in decent condition.
• A house is subject to a property ownership rights dispute in a divorce settlement. Both parties to the divorce want to sell the house to be able to divide the cash proceeds from the sale.
• The kids or grand kids inherit a property owned by a grandmother for decades. They do not want to be responsible for the property, so they decide to sell the property and split the proceeds.
• The house is to be bulldozed down to make room for a larger development.
In any of the real-life cases there are profits made in the real estate transactions for clever real estate investors.
It the first case, buying a home full of junk that is otherwise structurally sound, means all the junk may be marketed on systems such as eBay for a profit. Estate sales are another way to approach this opportunity. They get a percentage of the total sale of everything in the home.
In example two, when people are going through a divorce they have less negotiating skills and often will accept a lower closing price just to be able to divide the asset between them.
People who inherit properties are getting a surprise gif. This means they rarely know what the gift is actually worth.
A clever real estate agent helps find these type of properties. An investor that steps in with a cash offer at the right time can get a bargain.
Anyone with advance knowledge of a major development that comes to an area has an opportunity to benefit from the increased value when small parcels of land sell to assemble larger parcels of land.
Conclusion
Fixer – Uppers have value for many reasons and it takes a perceptive real estate investor to see this. The agents at ACRES solutions are ready to help you.