As longtime readers know, I’ve been buying fix-up single-family houses and writing about earning profits from these homes for many years. In this three-part series I will share my tips on how to find the perfect flipper properties. (See Part 2: Surprising places to find real estate flipper properties and Part 3: Being nosey may snag real estate bargains.)

OPPORTUNITY #1 – FAST FIX-UP FLIPPER PROPERTIES. Fixer-upper properties, whether houses, apartments, shopping centers, warehouses, or any other type of property, are available in every community and in all price ranges. Properties needing fast fix-up are the primary “flipper” profit category.

Purchase Bob Bruss reports online.

Many real estate investors make a full-time business of acquiring fix-up properties, upgrading them, and then quickly reselling for fast profits. To illustrate, have you seen those big billboards and newspaper ads in many major cities that say, “I buy ugly houses. Call Joe at 555-5555.” Joe is obviously a “flipper” investor. You wouldn’t keep seeing those expensive signs and ads unless they were paying off for the advertising investors.

However, as I’ve emphasized many times, it only pays to acquire fixer-upper properties with “the right things wrong.” That means look for properties needing inexpensive cosmetic fix-up work such as fresh paint (by far, the most profitable improvement of all), new landscaping, new light fixtures, wall-to-wall carpets, general cleaning and repairing, kitchen cabinets and appliances, and other value-adding upgrades.

A sound goal is to add at least $2 of market value for each $1 spent on fix-up work. But avoid acquiring unprofitable fix-up properties that need expensive major repairs, which add little or no market value exceeding their cost, such as foundation work, new roof, and room additions.

It is usually most profitable to hire the improvement work done rather than doing it yourself. I learned that lesson the hard way years ago. I once painted every apartment in my nine-unit San Francisco apartment building. I still recall tiling around a bathtub (breaking many tiles before I got the hang of cutting and installing tiles perfectly!) and even tiling a kitchen counter. I also replaced many broken windows in that building, making frequent trips to the local hardware store for replacement glass.

Looking back, I wasted about six months when I could have, instead, been earning rental income from those vacant apartments. If you are short of cash (as I was when fixing up those nine apartments), borrow the money needed on a bank improvement loan to get the renovations completed as fast as possible by hiring professional workers.

Another advantage of hiring fix-up work done (rather than doing it yourself) is you can add the cost of the hired labor to your property basis, whereas if you do the work yourself Uncle Sam values your labor at zero so you will then come out short on the tax benefits.

In conclusion, remember to: (1) fixer-upper properties are available in virtually all neighborhoods, and (2) when acquiring a fixer-upper “flipper” property, be sure you know what you are doing and that you can borrow enough fix-up funds to complete the work, otherwise you might become involved in a costly mistake.

(For more information on Bob Bruss publications, visit his
Real Estate Center


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