1. Finance.
Arrange your financing first. Before you even look for a
fixer. This is the key to winning the property. Investors
ready to cash out a desperate home seller with a quick
closing get offers accepted. Make sure you use a loan
officer who can put the loan together within ten days.
(Purchase loans take priority over refinance loans.)
2. Find. You need
to become an expert in ONE neighborhood so you know what
makes for a great deal. Choose a target area and don't
just drive around looking for signs. Get out of your car
and talk to people that you see. If you're male, take a
woman with you to talk to the ladies. If you're a woman,
take a man along for protection.
You might need to talk to many
people before you get a lead on someone who needs to sell
their home. "Needs to sell" - the secret
phrase that makes negotiating a bargain easier. Of
course neighbors don't always know the desperation of
their friends, but they may have heard rumors that "so and
so" mentioned selling.
When you talk to the home seller,
approach gently and tell them that their neighbor (use
name) said they might be selling their home. If the home
owner does want to sell, talk to them at length so you
find out the reason they need to sell. Offer a
quick solution to their specific problem. For instance, we
once gave a home seller a check for $2,000 for the signed
contract because they needed cash. This can be risky if
they don't really own the home. You can call your loan
officer or title officer to verify the ownership and
liens. We've also made concessions to sellers allowing
them to stay in the home after closing to give them time
to find a new home. When you truly know the seller's
problem, you match the solution with your capabilities.
If you do work with an agent to find
a bargain, ask for the home seller to be present for you
to talk to. Our last investment property was a listed
home. Our offer for $40,000 less than market was accepted
because the divorcing couple needed a quick sale and we
put a lot down so they felt secure in the sale.
You don't need to put a lot of money
down on all fixers. Our son bought this fixer for only
$500 down and even got money back at close of escrow. This
was in 2004, not long ago.
3. Fix. Don't
just do the typical "blow 'n go" paint everything white.
Fix your home using interior design psychology strategies
for your target buyer. Save money on fixing costs using
"oops" paint and supplies from Habitat for Humanity's
thrift store, ReStore.
4. Profit.
Perhaps you want to make quick money a flip the house.
Flipping houses isn't the only way for you to profit. You
can refinance the property with the increased value and
find a tenant to make the payments for you. If you do want
to sell and don't need cash, sell with a 1031 tax-free
exchange and put the money to work for you in your next
investment property.
Millionaire
Market "Where Money Counts!"