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Sunday
Jul292007

15 Steps to Buying and Selling a Fixer-Upper

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Home Sweet Home
Is it Possible to Make Money From a Fixer-Upper?

It just needs a little TLC, right? If you're willing to put some elbow grease into it, buying and selling a fixer-upper can be a profitable endeavor. But there's a level of risk involved, not to mention a substantial commitment of time and effort on your part and long periods when you will be living in chaos and sawdust. If you're still up for the challenge, there is money to be made.

Step One Decide on the geographic area in which you want a property. Whether you intend to live in a home or not will impact where you'll want to buy. Remember that your ideal place to live may not be the best place to invest in property. The old real estate adage Location, Location, Location still applies - it's better to buy the worst house in a good street than to buy the best house in a bad street. Location is everything.

Step Two
Be prepared for an extensive search. Many fixer-uppers--particularly those in especially bad shape--don't command much attention, so you may have to hunt around. Start with an internet search of the area you're interested in. Then drive through desirable neighborhoods to spot "For Sale" signs and houses that apppear to be neglected.

Step Three
Steer away from properties in areas that are going downhill, because you'll have trouble recouping your investment no matter how beautiful the structure. Find out if the asking price of that fixer-upper is comparable with the prices of other homes on the block. Make sure the fixer-upper is in an area of appreciating house values. That way, your house will be worth even more when your repairs are completed, rather than less because of worsening market conditions in the neighborhood. Try to meet some of the neighbors who might give you some information on what's been going on in their block.

Step Four
Look in the classifieds, and at community bulletin boards or other public spots for the magic words "fixer-upper," "needs TLC," "handyman special" or "diamond in the rough." But don't be sucked in by bait advertising. Real Estate agents are getting craftier and craftier in the way they advertise property - "needs some TLC" can mean "is a complete derelict that should be pulled down". And of course a favourite trick is to advertise "ghost" properties - properties that don't exist or have already been sold. The agents are trying to lure you into their office where they can pitch you similar "opportunities". Have a look at this great story on a woman that bought a property advertised as "Cute starter home -- needs a little TLC".

Step Five
"Review local listings of foreclosed properties in your city". Here's a Golden Opportunity to drop in your first solid link - to a site listing "foreclosed properties" - like this one - Homesales.gov - a web site that provides current information about single family homes for sale by the U.S. Federal Government. "These previously owned homes are for sale by public auction or other method depending on the property. Anyone can buy a home for sale by the U.S. Government, but you must work with a real estate agent, broker or servicing representative to submit an offer or bid.

Currently the U.S. Departments of Housing and Urban Development (HUD), Agriculture (USDA/Rural Development), and Veterans Affairs (VA) have homes listed on this site. Learn how to buy them."

When banks or municipalities have had to take ownership of a property, they're generally very motivated to hand it off to a private buyer like you (See this CNN article on How to Buy a Foreclosed Home).

Step Six
"Keep an eye out for properties that need only cosmetic improvements. Houses that could use new paint, carpeting or flooring are the least expensive and offer the fastest potential turnaround. Larger problems such as bad roofs or faulty foundations are often prohibitively expensive and undermine eventual profit, depending on what you got the house for and how much you think you can sell it for."
Well this step is fairly obvious - can you do the cosmetic work yourself or will you have to pay tradesmen to carry it out? See this - home inspection company.

Step Seven
Watch for vacant homes that have not been kept up by the owner. These forgotten houses can often have the most motivated seller you could hope to find.

Step Eight
"If you find an appealing property with seemingly reasonable repair needs, confirm. Have the home professionally inspected. Specify that the final sale is contingent on a satisfactory complete inspection."

Step Nine
Accompany the inspector when he or she goes through the house for a blow-by-blow account. Then review the report in detail to see what's wrong. You may also need to get additional inspections including soil, pest, roof and seismic. Be sure the inspector generates a narrative report rather than a checklist.

Step Ten
"Get a formal appraisal ($200 to $400) of the home's value and have your agent work up comparables. If possible, have the appraiser estimate how much the home should sell for after it is restored to good condition." More here - Real Estate Appraisal

Step Eleven
Set your target purchase price. Pros suggest bidding at least 20 percent below its potential fixed-up value.

Step Twelve
"Get several bids from contractors of how much it will cost to fix what needs to be fixed (see How to Hire a Contractor, Plumber, Painter or Electrician)". I haven't bother linking these but you get the drift. Just find some relevant information on "How to Hire a Tradesman"
"Be sure to check zoning requirements and include permit fees. The house's value should increase at least $2 for every dollar you spend on improvements. Calculate the potential value of the house after renovations and be sure that it isn't higher than comparable houses on the block. Be realistic about repair costs."

Step Thirteen
Make the final sale contingent on obtaining a satisfactory bid for improvements. That way, if the bids you receive are simply too expensive, you can back out of the deal. Keep in mind that contingencies of any kind could make it hard to negotiate a lower price or even make a deal in a seller's market when competition among buyers can be intense.

Step Fourteen
See How to Shop for a Mortgage, and pursue a mortgage that includes funds for home renovation, such as the Federal Housing Authority 203(k) program

Step Fifteen
Make whatever repairs and renovations are necessary and then sell the property. (See How to Sell a House.)
And finally, how to raise finance to buy your fixer-upper even if your credit rating is on the nose - Have a look at this article - Guaranteed Bad Credit Financing and this other one - How to Get Credit For Financing the Purchase of a Fixer-Upper. You'll see anything is possible. As Donald Trump always says - use other people's money. You might want to read this following article on raising a deposit for a fixer-upper even if you have bad credit -
Is Getting A Personal Loan With Bad Credit Impossible? Think Again

Is Getting A Personal Loan With Bad Credit Impossible? Think Again
By James Taylor

A bad credit history is like having contracted an infectious disease. At least this is what most lenders perceive. Any requests for personal loans by people with a bad credit history are generally declined. They are charged an extravagantly high rate of interest, if advanced personal loans.

What these lenders fail to recognize is that the people who are currently rated as a bad credit case were sometimes having a good credit history. Some acts of the past, which were sometimes inevitable, became the reason for theirs being tarnished with bad credit.

It will be illogical to punish the people for acts of the past. Besides there are few means to guarantee that a person otherwise rated as a perfect credit case, may default on the loan.

Lenders have slowly started accepting the fact. The growing number of people falling in the trap of bad credit has brought home the fact that they cannot do without doing business with these people.

Besides opening practically every loan for people with bad credit, more and more loan products have come up to cater to the specialized group. There are similar options for the people with bad credit, as for the people with a good or average credit.

Bad credit personal loans are used for a variety of purposes like buying a car or going on a holiday. They are also widely used in debt consolidation.

Bad credit becomes irrelevant if the person has and is ready to keep some asset as collateral. The main idea behind the refusal to the people with bad credit is that they fear that the default will be repeated. With a collateral to back the personal loan, the lender is assured that the loan would not be defaulted. The borrower knows that he will have to lose the asset, generally home, if he defaults on the loan.

The requirement of collateral can be done away with in case of an unsecured personal loan. Lenders rarely offer such loans. A good credit history is a pre-requisite in such loans. But, there are always some lenders who take consideration of your case. Lenders accept borrowers with a bad credit history because of inevitable reasons.

Bad credit personal loans normally carry a higher rate of interest. This is because of the higher risk potential in such loans. One may also be overcharged on this account. The borrowers are asked to pay a hefty charge and have to face some inflexible terms of payment.

Nevertheless, there are lenders who charge reasonably lower rates of interest. Taking a loan is not a trivial matter. It puts an important asset to stake. It also affects the financial condition of the borrower. This makes a proper search for the loan a priority. Gone are the days when searching the loan market would have raised hackles of people. Today searching has become much simpler, thanks to the power of information technology.

The selection of the most appropriate lender is not that easy a task. Though made simpler through information technology, ones mental faculties are the best resort in the selection process. Lenders generally promise many features along with the loan. Borrowers take this bait and fall in the trap. Failing to maintain an optimum balance between an immediate comfort and a future comfort also leads to this trap.

Deciding the monthly repayments and the number of installments further strain your mental faculties. An expert advice from knowledgeable people will help in this decision. Being aware of ones financial condition, the borrower can decide the various details of the loan in a much better manner. Thus, the final decision is reserved with the borrower himself.

A bad credit personal loan has a positive impact on ones credit history, provided the repayments to the loan are made regularly.

James Taylor holds a Master’s degree in Commerce from JNU he is working as financial consultant for

http://www.chanceforloans.co.uk To find a personal loans, bad credit loans that best suits your needs visit http://www.chanceforloans.co.uk

Article Source: http://EzineArticles.com/?expert=James_Taylor
http://EzineArticles.com/?Is-Getting-A-Personal-Loan-With-Bad-Credit-Impossible?-Think-Again&id=38022

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