The Deal of the Century and How to Find One.
Often times, a deal in the real estate market depends on a person’s perception. Investors may be looking at one aspect of a home, while a potential owner will look at something completely different. Generally speaking, an investor is looking at a short term gain while a potential homeowner may be looking at price along with location and condition.
Investors:
1. Fixers with minimal cosmetic repairs or significant structural damage can often be turned quickly, at a premium. The trick to a successful flip is a fast and reliable crew coupled with knowledge of housing trends and decor. Remember style and location, as well as, quality improvements play a part in the profit of your flip. Stick with homes popular in size and style. These homes are most easily sold once renovated. A realistic budget is essential to a great bottom line.
2. Distress sales, if approached in a realistic manner offer great potential. If you have cash on hand, the courthouse steps will offer the biggest potential profit. Seeing the home before bidding is crucial. Having a knowledgeable idea of what repairs and upgrades can cost will determine which homes to stay away from.
3. The bail out of a homeowner facing foreclosure can lead to big profits. Research is absolutely essential in determining a realistic price and potential profit. Things like upgrades, condition and location will all contribute to ease and profit of sale. Do your homework and profits are possible.
Owners:
1. The old adage, buy the worst home in the best area holds true. Often these areas are in great demand and homes sell quickly. But if you find a home in need of repairs in a sought after area it can be a gold mine. Consider the cost of repairs and who will do them. Get estimates of repairs before hand and don’t be afraid to negotiate the price lower. If the home’s price reflects needed repairs then you may have found a winner. A long term profit is a definite in one of these areas since, despite fluctuations, real estate always appreciates.
2. Buying a home in a new development can be a potential windfall. In California’s declining housing market, new home sellers are all but giving homes away. With incentives including free flooring upgrades and landscaping coupled with huge price reductions, many cannot afford to pass up these deals. Things to consider when buying a new home are high taxes and homeowners associations. These can detract from the great prices, so look with an open mind and don’t fall for all the glitz of professionally decorated models. Remember, your home won’t be furnished with their furniture (unless you’re a very good negotiator).
3. Consider buying from a family member. If mom and pop are headed for a retirement home consider buying from them. Often family members will cut a deal when a house stays in the family. Even if the home is in need of repairs and upgrades, these homes still afford one of the best opportunities for a healthy profit. Always consult a tax professional. There may be many benefits the buyer and seller are not aware of and a few liabilities if not completed correctly.
Whether long term or short term, investor or owner, real estate deals can always be had. Often, research of market trends, knowledge of up and coming areas, and a realistic idea of what a deal really is, can lead to profit and even wealth on the real estate roller coaster.