Fixer-uppers on the market tend to be listed at incredibly enticing price points, and that leads many investors to considering them very seriously.
Overview
- Up-Front Investment: Purchasing a fixer-upper property, which may require more down due to the increased risk.
- On-Going Investment: Short-term investment to fix up home (and then any costs to own/maintain it until it sells).
- Return on investment: Potentially low. You need to be careful with numbers to come out in the green.
- Best for: Any place with a hot housing market where you know there’s a good chance the fixed-up property will sell quickly.
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How It Works
A house flipper is someone who buys a property in need of repair (especially foreclosures and auction homes, but they can also just be outdated units) and then fixes it up with the intent to sell it for a profit–usually a very large profit if they play their cards right.
House Flipping Considerations
It sounds like the perfect plan: You’re buying undervalued houses in need of repair, refurbish the house, and list it on the market for a higher price. You profit, and the local community also wins since you just fixed an eye sore.
It sounds like a wonderful plan and a great way to improve the curb appeal of any town, but it’s not quite as simple as it seems.
Getting the upfront capital to buy a house, and then pay for all the repairs in a timely manner so you can put it on the market, is perhaps the most difficult part of the whole plan.
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