Many real estate investors enjoy "flipping houses," or buying and selling houses quickly for profit. Not all flips are fixers; however rehabbers contruct millions turning ugly houses into dollhouses. On the other hand, some inexperienced investors lose funds buying houses that just do not turn a profit.

If youre looking to get started investing in real estate by fixing and flipping houses, youll want to understand what type of property to buy.


Three Tips to Help You Find the Perfect Fixer

1. Understand Your Market

Your first task, exploring your market, helps you understand a deal when you spot it. Look at houses for sale in your area. Keep track of sales and how long the houses take to sell. Ask the selling real estate agent about the terms of these sales because this helps you understand how sellers sell their property (some of this understanding is public record). For instance, if a seller paid closing costs for the buyer, did the price rise from the listed price accordingly? Or, did the seller come down on the price and also pay the buyers costs? Examine the sales that sell quickly. What home features and financing options prompted the fast sale?

Also, look at model homes. Buyers commonly buy resale homes because they cant wait for a new home to be finished. But these buyers like the special features new homes offer. Visit model homes and take notes on how details like a water fountain or a new state-of-the-art appliance makes a house sell itself. When you remodel your fixer, youll know what turns buyers on and youll make smart makeover choices.


2. Know When "Ugly" Means "Profit"

When you first initial out in your real estate "flipping fixers" business, you will want to look for houses needing only cosmetic work. Look for houses that just positive need cleaning up, painting, and new flooring. Use your imagination when viewing these homes. Try to visualize the finished dollhouse as you look at structural features and the surrounding homes. We like to buy the ugliest house in a decent neighborhood.

Do not be afraid of stinky houses that show horribly; look for fixers with peeling paint, holes in the wall, stained carpeting, and trash in the yard. Remember, these houses wont look grand to most buyers, but other investors see them as gold mines.


3. Know When "Ugly" Means "Pass"

When youre new to real estate investing, always remember your limitations. Use caution when considering houses that need structural repairs. Some rehabbers replace walls, plumbing, structural beams, sub-flooring, and electrical systems, but they gained those skills after many years of knowledge or they have the money to pay a professional.

If you find a house with structural problems, get estimates from reliable contractors to do the work. If the walls have too many cracks and bumps, you can positive need to hang new sheet rock or hire a professional plaster refinisher. Look for signs of plumbing problems such as water stains under sinks and loose flooring, and get estimates for professional repair. Take professional estimates into account before deciding whether or not to purchase an investment property. Any big expense decreases your eventual profit.


Turn Yucks into Bucks

Why would anyone want to do this hard work? How much does the average investor generate? In Philadelphia, real estate investors buy houses expecting a profit of about $30,000. In Southern California, many investors build $50,000 to $100,000 on each house.

When you find a garbage-filled, flea-infested house in a family neighborhood, take your bug spray, hold your nose, and get ready to generate a difference, in the neighborhood and in your bank account.

You may contruct a fortune fixing nasty houses. Learn your advertise. Know when "ugly" means profit in your pocket, and when to keep looking for the house with the hidden gold mine.