|
Author: Andrew Lo Article source: http://www.faxts.com/. Used with author's permission.
You're driving along the road when you spot it. There in the middle of a shaggy lawn sits a disheveled property. It may need a good coat of paint, or a shutter straightened out, but it's easy to see that with a little work it could be a little gem of a property. Best of all, sprouting in the middle of the unkempt grass is a For Sale by Owner sign. It looks like the perfect fixer-upper, but how do you know for sure?
First, consider your reason for buying. If you're looking for a property to 'flip' - to buy low, fix up and sell for a profit - there are a number of things you'll want to take into consideration. If your intent is to buy it as rental property, there's a different set of consideration, and if you're looking for a home of your own, there's yet a third. Let's assume, for the sake of this article, that your intent is to flip the property for profit.
Test 1: The Neighborhood Test
Before you invest another hour, do yourself a favor and take stock of the surroundings. The old saying in the real estate business that the three factors in selling a home are 'location, location and location'. What is the location like? No matter how wonderful the property is, you'll have a difficult time selling it for top price in a bad neighborhood. That doesn't mean that it's a bad property - depending on how low a price you can bargain, you still may be able to make a decent profit from it.
Another consideration in the Neighborhood Test is a bit more
subjective, and you'll have a feel for it if you're local and keep an ear to the ground. Is the neighborhood in transition? A neighborhood that is on the cusp of a renewal effort like gentrification can be a great place to invest, as long as the upward momentum continues. An area that is on the outskirts of new development will often benefit from that as well. If, on the other hand, the neighborhood shows signs of slipping into a decline, you might want to pass the property by. If you can see that the neighborhood is slipping, so will prospective buyers.
Are there 'amenities' nearby? Depending on the neighborhood and your prospective market, those amenities might include a neighborhood school with a good reputation, a corner store within walking distance, or a park right down the street. In one Massachusetts city, for example, the value of properties in a formerly depressed neighborhood skyrocketed when a local university announced a commitment to provide full tuition to the
children of neighborhood residents, and provided additional incentives to home buyers within several blocks of their campus. Investors who bought just before the announcement realized excellent turnaround on their investment.
Test 2: The Pricing Test
Is the home listed with a Realtor, or is it a FSBO? How realistic is the asking price? Is it in your price range? Can you work out a low or no-money-down financing option? How open to negotiation is the seller? Will you be able to realize a profit after making needed repairs?
Test 3: The Condition Test
This is one of the most important tests. The property you want to buy doesn't require any extensive, expensive repairs. It should be structurally sound, without any major plumbing or electrical problems. If you're just starting out, you'll want a property with repairs you can manage yourself - repainting, refinishing floors, a little landscaping. If the property requires more extensive repairs, it will cut into your profit, or eliminate it altogether.
When you view the property, really kick the tires. Look for indicators of hidden problems. Here are a few things to look for:
-
Moisture stains on walls and ceilings could indicate plumbing problems
-
Little piles of sawdust near corners or woodwork could mean termites.
-
Separations between floor and wall, especially outer walls which could indicate structural problems.
-
Lift tiles in suspended ceilings to examine the ceilings above for loose plaster, moisture stains and other indications of problems
Test 4: The Title Test
The final test is the title test. Be certain that the title to the property is clear, with no liens or attachments that could sour the sale. If there are, and you still want the property, work out a conditional sale, where your purchase is contingent upon the liens being satisfied.
If the property passes all of the above tests with flying colors,
congratulate yourself. You've got yourself an investment property that could turn a pretty profit for you. Andrew is the web owner of Real Estate Investment Tips, a website that provides informational guide on real estate investment, foreclosure home and more. You can visit his website at:http://www.buy-and-sell-house-fast.com/
The Business of Closing the Sale Without Killing It
You must be able to coordinate your sales talk to service whatever step in the selling process the customer has arrived at in their mind.
Organizational Culture and Creative Blocks – the Similarities
Few Decision makers see the link between between creativity and innovation management, as performed by MBA's in firms, and creative endeavours such as screenwri...
Google AdSense - A Quick Overview For Beginners
Google AdSense is the syndication of Google Adwords. Before we continue, you must understand the outline of Google AdWords first. You haven't? Read my AdWords a...
Referrals: Getting Good Business By Doing Good Business
In this essay, we'll focus on getting old clients to come back and referrals. How do you get them? How do you ask for them? How do people choose to come back? H...
Speed Indexing - 3 Steps to Getting Your Website Listed in Google Quickly
Tips for Getting Your Website Included in Google's Index
How to Quickly Gain Traffic to Your New Web Site
The problem with a new site is that it often takes a long time before it is indexed by the search engines. This means you are missing out on getting traffic and...
Viburnum
A guide to the selection and cultivation of this genus noted for is showy and sometimes frangrant spring flower display and for it vibrant late summer to autumn...
10 Key Career Success Questions
At some point in every professional or managerial career, there is a time when one start thinking: Is it time to move on or do something else? However, before...
Simple Truths for Change, Healing, and a Magnificent Life!
Change is the opening in your life journey that allows you to access the unlimited creative energy within you…you literally are given the gift of re-creation of...
The Art & Science of Property Valuation -- Automated Valuation Models
It is no secret that sellers want to sell high and buyers want to buy low. But they often arrive at the negotiating table with very different ideas on price. A...
Yoga for Every BODY
We all want to feel loved, open, free and peaceful. We all desire to let go of the ideals and expectations of the "world" and be simply still. What if you had...
Free to Succeed: Effective Sales Leadership Using A Coach Approach
Learn three powerful secrets to effective sales management
Gardening During Hard Times or Emergencies - You Can Feed Yourself!
What would you do if you couldn't get food at the stores? Could you feed yourself? Here is the answer, and it's not that difficult!
The SURGE of the URGE!
The sexual revolution stepped onto the horizon a few decades back and "The SURGE of the URGE" was born and became the focus of our culture. Find out why it has ...
Ten Quick Tests To Check Your Website For Accessibility
Learn how to quickly check your website for accessibility with these ten tests.
Country Home Decorating – Country Style Home Decor the Way Life Used to Be
What is the lure and appeal of country home decorating? Maybe it's the desire to escape the rush and demands of a hectic lifestyle. It could be the need to re...
Are You a Casual Consumer?
When developing your budget, it is important to monitor your daily purchases because you may discover that you have developed some expensive habits. Take for i...
Save on Wedding Costs and Have that Chocolate Fountain
With chocolate fountain rental costs running neck-and-neck with the wedding cake, it's no wonder that brides set on the fountain are looking for a better way.
A Beginners Guide to Online Loans
If you're just beginning to look at online loans, you might feel that you're getting in over your head.
How to Put Photos on a DVD in Ten Easy Steps
So you have your computer loaded with all of your favorite photos and you don't know how to get them on a dvd. Discover from this article how easily you can acc...
Step by Step Foreskin Restoration Guide Using T-Tape Method - For Those New To Foreskin Restoration
Foreskin restoration can be achieved by most any circumcised man. The ability to go through a full, successful foreskin restoration, has very minor bearing on h...
Immutable Laws Of Effective Navigation - Part 1
The first immutable law of effective navigation: It's gotta be readily available. Visitors should not have to hunt for your navigation or wonder where to find i...
A Tale Of Three Essences
Water Of Enlightenment, Angel of Peace and Harmony for Nature are three remarkable vibrational essences for coping with the devasting global changes that we are...
Workplace Melodrama--A Flair For The Dramatic
In the workplace, melodrama happens when a minor concern or conflict is embroidered and overstated in such a way that it becomes larger-than-life and blown way ...
|
Print this page