Sometimes home buyers want to find a fixer-upper and they are willing to build sweat equity. Indeed, buying a run-down house and fixing it up as a way to get in on the cheap is a dream of many. It can happen successfully, but bear in mind that the waters are shark infested.
The key to not losing money is creating a step-by-step plan and following it. It may by now sound like a cliche´, but location is the key to finding a fixer-upper that will grow in value. Homes in good locations increase in value more quickly and hold their value when the market is down.
Most important, you’ll be able to build equity for a larger down payment when you move up. Good sources for finding fixer-uppers are classified ads, referrals, the MLS, and foreclosure sales. And you must become an expert on home values in the areas you’re interested in, so that you can move quickly when a deal pops up.
So, networking in your areas of choice, especially with knowledgeable Realtors, is a great way to learn about estate sales or divorcing couples unloading homes they can no longer afford. Realtors can inform you instantly with text messaging, e-mail, or cell phone calls when homes come on the market through the MLS system.
Tips of the day:
The keys to successful fixeruppers are to buy in the best area you can afford, to learn how to estimate upgrade costs, and to get bids on big items before you buy