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Real Estate Information |
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Buying and Selling Distressed Houses for Maximum Profit (Update)
If you want to become a real estate investor, find a "fixer-upper" owned by an anxious seller. Finding distressed houses at bargain prices, fixing them up, and then selling them on a consistent basis can make you a multi-millionaire. Why Sellers Sell At a Discount Home owners' problems often prevent them from staying on top of their home's upkeep. Factors such as job loss, divorce, serious illness, various addictions, or other personal problems quickly overwhelm distressed home owners, forcing them to sell. These sellers can't make the needed repairs because of financial or physical limitations, and when that happens, their home becomes a low priority and sometimes will go into foreclosure. Look for the "Triple D" Home sellers with three problems give beginning investors a great opportunity. A "Triple D" is a Doghouse, involved in a Divorce, and in Default. The label "doghouse" comes from Southern California Realtors who used this term to describe the worst fixers. These houses maybe "tired" and need only cosmetic work in order to favorably compare with other homes in the area. What to Look for in a Doghouse The hardest house for a homeowner to sell is a "doghouse," "dump," or "fixer-upper." These run-down houses scare off most buyers, who don't have the money to cover the down payment, closing costs, new furniture, carpeting, appliances, roof repairs, and other deferred maintenance required to bring the home back into top condition. As you look through the classified ads or at Realtor listings, keep an eye out for terms like "handyman special," "as is," "fixer," or other tell-tale words. Also have your agent use similar terms when scanning the Multiple Listing Service for your target area. Once you've found a property that you can turn from doghouse to dollhouse, find out the seller's problem and then offer a solution. Distressed sellers frequently experience financial problems and need cash as soon as possible. Therefore, if you're ready to close quickly, you'll be set to negotiate a lower sales price. How to Close Quickly Find an experienced lender and get yourself not only "pre-qualified," but also "pre-approved." Taking that second step assures worried sellers that you already have your loan in place for their property, and this puts you well ahead of other potential buyers. How to Know When "Bad" Is Good When you first start out in the real estate "fixer" business, you'll want to look for "ugly" houses needing only cosmetic work. Look for entry level fixers that just need some cleaning up, painting, and carpeting. When you're new to the fixer business, always remember your limitations and use caution when considering houses needing structural repairs. My husband replaces structural beams, sub-flooring, walls, plumbing, and electrical systems, but he acquired those skills after years of experience. If you find a house with structural problems, get estimates from reliable contractors to do the work. Experience teaches you how to do more over time. Until then, rely on experienced professionals to do the repairs. Take professional estimates into account before deciding whether or not to purchase an investment property. The Easiest Houses to Sell A dollhouse, located in a popular neighborhood, sells the quickest. For instance, we once sold a home we named "Orange Tree Cottage" in just three hours! To qualify as a dollhouse, a home must be in a location that buyers want and must offer the number of bedrooms, bathrooms, and amenities they're seeking. Beyond the price, however, buyers purchase the house that meets both their basic requirements and their emotional needs. Filling Buyers' Emotional Needs After many years of investment experience, we've found that using Design Psychology and Marketing Psychology techniques greatly increases our profits. Both concepts go far beyond "curb appeal." For instance, we use colors that target our prospective buyer's income level and match the selling season. Generally, buyers of higher-priced homes prefer complex colors. And using cool colors during hot weather and warm colors in cold seasons makes buyers feel like they've found an oasis or sheltering haven. We also paint the front door a happy color and entice buyers into the house by placing potted plants on the porch. Once inside, we use home staging strategies to create a buyers' dream home. We don't use a lot of furniture; just a few accessories to suggest happy activities. The idea is to make the buyers believe that if they buy your home, they'll enjoy a new lifestyle. Over the years, we've bought and sold dozens of distressed properties. By using caution and common sense, as well as following a few simple rules and using Design Psychology strategies, you, too, can become a wealthy real estate investor! (c) Copyright 2005 Jeanette J. Fisher. All rights reserved. Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars: Using Design Psychology to Increase Real Estate Profits, Sell Your Home for Top Dollar--FAST, Home Staging, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, newsletters, and blogs for your questions, see http://www.doghousetodollhousefordollars.com/
MORE RESOURCES: Altadena’s rough real estate market: Slower sales, lower prices, lottery winner plucking up properties Los Angeles Times Real estate magazine reports Les Wexner as Blue Heron buyer The Martha's Vineyard Times Real estate expert warns socialist mayoral candidate could trigger massive NYC exodus - Fox Business Canadian psychologist Jordan Peterson sets up shop in the Valley, records show The Business Journals Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem - Crain's Detroit Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem Crain's Detroit Business ‘Taken advantage of’: Real estate agent ripped off friends, church, and federal government - WSOC TV Office real estate wide open in Denver as vacancy rate hits 36 percent Colorado Public Radio Vail Valley real estate inventory is on the rise VailDaily.com NAR Real Estate Forecast Summit National Association of REALTORS® Real Estate Partners Dollar Tree Let's Talk Business: June residential real estate sales lagging, heritage grants and more Pueblo Chieftain A New Perspective: Here Comes the Groom | Real Estate Insights Piedmont Exedra Boston Real Estate Times Unveils 2025 Excellence Award Winners: Honoring the Visionaries Shaping New England’s Future Boston Real Estate Times Dawson County weekly real estate transactions, July 18 Central Nebraska Today State lawmaker joins Westport commercial real estate brokerage as vice president Hartford Business Journal Private Credit Surges in 2025 as Real Estate Developers Bypass Banks The World Property Journal Real estate news: Senior apartments in Tustin sell for $83M; Fullerton Metrocenter snares $118M Orange County Register 5 Essential Tech Tools for Real Estate Agents National Association of REALTORS® New York Housing Market Trends 2025: Is the Tide Turning for Buyers? Norada Real Estate Investments Los Angeles Water & Power commits $100 to real estate debt Pensions & Investments Today’s Mortgage Rates: The States Offering Lowest Rates – July 18, 2025 Norada Real Estate Investments Property management with an owner’s mindset J.P. Morgan Corcoran McEnearney Announces Evan Lacopo to Lead the Number One Real Estate Office in Alexandria, Virginia Alexandria Living Magazine SRS Real Estate Partners Arranges $4.53 Million Ground Lease Sale of Walmart Property in Deltona, FL citybiz Real Estate Market Report (June) highlandscurrent.org Licking County real estate transfers for June 30-July 4 range from $200,000-$14.6 million The Newark Advocate Banner Real Estate Group Breaks Ground on 334-Unit The Faywell Multifamily Development in The Heart MultifamilyBiz Bridgemarq Real Estate Services® Declares Dividend Yahoo Finance Moon Becomes Next Real Estate Frontier, NAR Reports Higher Foreign Investment In US Huntsville Business Journal CBRE Announces Strategic Leadership Appointments Across U.S. & Canada Advisory Business Boston Real Estate Times Gravelle advises on current real estate market in Grant County Columbia Basin Herald Frederick Ford, real estate executive and first Black Union League Club president, dies at 98 Chicago Tribune Mapletree Sells Sun Belt Warehouse Portfolio to EQT Real Estate for $241M Commercial Observer GenesisM Breaks Ground on 154,000-Square-Foot Biomanufacturing Facility in Bedford, MA Boston Real Estate Times AGC MA Announces 5th Annual Building Advancement Externship to Bridge Educators with STEM Construction Careers Boston Real Estate Times Operation Pawssible: Greenbrier Humane Society gets a boost from local real estate company Mountain Messenger What's the most expensive property sold in Rhode Island? July 18 real estate transactions The Providence Journal The Pipeline: Commercial real estate roundup for 7.18.25 Richmond BizSense LOCAL REAL ESTATE TODAY 7.18.25 KQEN News Radio Home Buyers: Stop Freaking Out After the Home Inspection National Association of REALTORS® Home Buyers May Have Accepted a New Norm on Rates National Association of REALTORS® SRS Real Estate Negotiates $4.5 Million Sale of Walmart-Anchored Property in Metro Orlando Shopping Center Business Miami-Dade’s self-storage surge a boom for real estate IslanderNews.com Tips on spotting real estate investment opportunities and avoiding risks, from experts at GR Property Group Community Impact Stage Point Europe Launches Its RWA Token $SPET, Setting it up as a Bridge Between Crypto and Real Estate Morningstar Hunt Companies Acquires Controlling Interest in Carter, Strengthening Real Estate Development Platform Business Wire Top Stocks for Real Estate Investment Elite AI Stock Forecasts - Massive wealth growth Jammu Links News New plans unveiled for Water Street’s second phase Tampa Bay Times July Economist Snapshot: What Will the Big Beautiful Bill Mean for Commercial Real Estate and Housing? Urban Land Magazine Vend Leans Into Verticalisation As Real Estate Revenue Grows 11% In Q2 onlinemarketplaces.com Is Apollo Commercial Real Estate Finance Inc. a good long term investment - Explosive market performance Jammu Links News Wood County Recorder reports on second quarter real estate activity BG Independent News Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 - The Courier-Journal Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 The Courier-Journal Drake Real Estate Partners closes largest fund yet after pivoting to institutions Private Equity Real Estate | PERE Choice Properties Real Estate Investment Trust 2025 Q2 - Results - Earnings Call Presentation (OTCMKTS:PPRQF) Seeking Alpha Real Estate Transfers ~ June 25, 2025 The Bedford Citizen Real estate transfers: Lake Township condominium complex sells for $5.61 million - Canton Repository Manitowoc's real estate transfers include a sale of nearly $1 million to Riverside Dairy Herald Times Reporter Real estate office transforms into collection center for donations being transported to Kerr County kens5.com Stonelake Capital sells dozens of industrial buildings across US for $920 million The Business Journals Real Estate Broker Paul Kaulesar Urges Young Entrepreneurs to "Start Local, Think Global" openPR.com |
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