Buying fixer-uppers has been a common investment technique for many years. These days, with millions of foreclosed homes available at bargain basement prices, fixer-uppers can be an excellent choice for buyers who are shopping for a home to live in, as well as for real estate investors.

Fixer-uppers are properties in need of repairs. They may be liveable in their present condition, or they may need quite a bit of work before they can be occupied, but in either case, there are some very important considerations when choosing the right property to help insure that you can achieve your personal objectives.

1. The Location

It used to be pretty rare to find a fixer-upper in a nice neighborhood, but the housing crisis has changed that. Today, fixer-upper properties are readily available in many of the nicer neighborhoods, especially in those states that have been hit hardest by high rates of foreclosure.

Don’t be impatient. Look around your chosen area carefully before making a final choice. It’s very important to be familiar with the local market. Choosing the right location will result in better property appreciation, and more demand when you are ready to sell, or better tenants and higher rental rates.

Avoid locations that have too many vacant properties, locations that have too many other investors in the area, or are places that you would not want to live yourself. Investor over-crowding tends to increase your competition and will therefore reduce your profits.

2. Know The True Market Value.

A property is not always a good deal just because it is a fixer-upper. Don’t let anyone sway your judgement about a property simply because it’s a fixer-upper. Just because a home has been foreclosed on does not automatically mean it is a good deal. Good deals are made through knowing what the true market value is, then negotiating a price that is as far below the true market value as possible.

3. Find A Fixer-Upper Project That You Can Handle.

Whether you are planning to live in the property, fix it up to sell or fix it up to use as a rental property, the most common mistake is that of taking on a project that is beyond your ability to handle.

I’ve done dozens of fixer-upper projects, including managing them for other investors. The biggest problem I’ve seen consistently is investors who take on projects that are bigger than they can handle. This leads to cost over-runs, projects that take too much time, and even running out of money and another foreclosure. I’ve seen numerous projects that were never finished after the buyer got over budget and ran out of money.

It’s easy to rationalize a project before you start, and inexperienced investors often believe that they can renovate an entire house in 4 weeks, working only on weekends in their spare time. That is a common mistake.

One biggie I suggest is to avoid any fixer-upper that needs walls moved in order to be functional. Moving walls and things like staircases can create unexpected problems unless you are planning to use a contractor who has adequate experience and a crew that can get the work done correctly. I’ve seen projects that began well and got totally out of hand and over budget after the investor decided to make extensive changes to the original floor plan.

If you choose a fixer-upper property in a desirable location, keep your rehab budget and necessary work within your ability to control, and you have a good renovation plan that you can stick with, you should find yourself owning a great property at a below market price. That means you’ll have some positive equity or a positive cash flow right from the start. And after all, that’s the main reason why you should consider buying a fixer-upper.

Donna Robinson is a 16 year veteran of the real estate industry. Her experience spans all phases of residential real estate, including licensed agent and rehabbing fixer-uppers. She is an active real estate investor who also provides coaching and consulting services to other investors. To discover how you may benefit from her expertise, contact her at coaching@reihelp.com and request a free PDF copy of her latest book on residential real estate.

The availability of affordable housing is an issue in most cities and states. There always seem to be more residents than units, and tracking available units can be difficult. Though there aren’t enough units to meet residents’ needs, there are more than enough to make it nearly impossible for anyone to know exactly what is available and when. That’s why a group from New York University’s Furman Center for Real Estate and Urban Policy began working on a database for affordable housing. After years of planning and programming, the database is complete. If it works, it could provide an important framework for other cities looking for ways to effectively monitor affordable housing availability.

Several years ago, the Furman Center partnered with the New York City Department of Housing Preservation and Development (HPD), the New York City Housing Development Corporation (HDC), New York State Homes and Community Renewal (HCR), and the U.S. Department of Housing and Urban Development (HUD). The goal of the collaboration was to create a database that accurately tracks the status of New York City’s nearly 250,000 affordable residential rental units. Several test versions have been released over the years, on a very limited scale. But the final version was released this fall and is available for use not only by housing advocates or those working in assistance-related sectors, but also by the general public.

Users can conduct housing searches based on location, types of affordable housing subsidies accepted, assessed value, and physical condition. Results of the search are displayed on a map, and information includes the property owner’s name, number of buildings and units per building on the property, and any subsidies it is currently receiving. Clicking on a link brings up more detailed information, including assessed value, when the property received its “affordable” restriction, and even the number of housing code violations that have been filed.

One of the greatest benefits of housing databases is that they give residents some autonomy and control when deciding where to live. Residents no longer have to rely on third parties to location available homes. The residents can search for themselves. It also allows residents to choose where they want to live, helping ensure that more families reside close to work, or the school they want their kids to attend. Because residents no longer have to simply accept whatever is available, but can make some choices regarding location and type of housing, databases like the one developed at NYU could spur further economic development and encourage schools to improve student performance in an effort to win over potential residents.

The Furman Center and its partners hope their efforts will assist in preserving the city’s affordable housing stock, and aid in the planning of future developments. Housing advocates hope other cities will follow New York’s example, and begin developing comprehensive databases similar to NYUs.

Want to get a free program guide of Sean Carpenter’s top 8 favorite government programs for real estate developers and investors? Request your free program guide today at:
http://www.governmentdealfunding.com/go/programs/

Purchasing a home is stressful enough without having to worry about possible problems hidden behind the walls or those carefully concealed by handy remodeling. The majority of home buyers work with a licensed home inspector to conduct a thorough inspection before sealing the deal on their purchase of a residential real estate listing. A professional inspection will typically uncover the majority of construction defects. In addition to conducting a meticulous inspection it’s also a good idea to review the real estate disclosures with the selling agent.

Sellers are legally bound to disclose all defects in their home prior to selling, and can therefore be legally held accountable. Upon listing your home for sale, these disclosures are signed and made available for review by all potential homebuyers. While there are a variety of typical disclosure forms for things such as mold, lead paint, natural hazards and radon, it’s also a good idea to question the seller in detail as to whether or not there are any other defects.

Some key questions include those about the age and condition of the roof and windows, past structural repairs, HVAC and plumbing system failures, basement leaks, appliance repairs, floods and even questions regarding repairs and additions. It’s important to know whether or not permits were obtained for additions or remodels as this is a key to the quality of workmanship. While a lot of do-it-yourself types can handle a small remodel, a lot of homeowners get in over their head leaving the future homeowner with a world of repairs.

Disclosure laws vary from state to state. Ideally, your Realtor will advise you as to the disclosures available on the home you’re interested in. When buying a home listed for sale by owner, direct questions to the sellers are even more important, especially if you as a buyer are not working with a professional real estate agent.

As a seller, the more you disclose the better. Lawsuits against sellers who did not completely disclose known problems with their home can cost thousands of dollars and months, if not years, to settle. Not disclosing can be construed as fraud. For those going the for sale by owner route, it’s highly recommended to consult a real estate attorney to make sure the seller is in compliance with real estate laws. Real estate laws and disclosures are highly complex, even for the most seasoned real estate professional. Keep in mind that disclosures are helpful to protect all parties involved.

George Kolar
http://www.signaturelistings.com