Fixer Uppers: The Money Making Formula
Making money with "fixer-uppers" isn't about repairing drywall or planting flowers. It's about using the right approach from the start.A Big Real Estate MistakeMany people buy and sell a fixer-upper like this: They buy a house, fix it up, then add some amount (say $10,000) that's in their head onto their costs. Then they put the house up for sale for this price. This is so wrong. Would you buy a house according to what the seller has into it? Of course not.
You look at what similar houses are selling for to determine the value. So if you have $110,000 into a fixer-upper and similar homes are selling for $105,000, how much can you get? It doesn't have anything to do with what you've spent, does it?The Fixer-Upper Formula 1. Determine how much the house will sell for when you're done fixing it up. Ask an appraiser for help, or look at what similar houses have sold for (not list prices). What it's likely to sell for is the only meaningful definition of value when dealing with fixer-uppers.
2. Calculate all costs: buying costs, including closing, fees, etc.; repair costs; carrying costs, including interest on loans used to buy the house, property taxes, insurance; selling costs, including commissions, fees, title policy, etc. Subtract costs from the expected sales price.
3. Now subtract a profit that makes it all worth the effort.
This gives you the highest price you can pay for the house. Walk away if you can't get it for this price or less. Offer several thousand less, of course, to give yourself negotiating room. An Example:You find a fixer-upper, and determine you can get $98,000 for it when it's done. The expenses of buying will be $2,000.
You get repair estimates of $8,000. Carrying costs will be $2,500. The sales commission will be $6,500. Other closing costs will be around $1,500. You figure $1,500 for "unexpected" costs.
Finally, you want $10,000 for your effort.Subtracting all of that from your expected sales price leaves $66,000. This is the most you can pay, if you want a safe real estate investment. You offer $61,000, and walk away if you and the seller can't settle on something under $66,000.Always start at the end (the eventual sales price) and work your way back. This is the right way to safely invest in fixer-uppers..
Steve Gillman has invested in mobile homes and other real estate for years. To learn more, and to see a photo of a beautiful house (not a mobile) he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.comDebt Free
Living debt free is the phenomenon of having credit available, using it wisely, saving religiously and planning accordingly.
Some financial gurus explain that living debt free means having no debt at all, but the definitions of ?debt free' range from not having any debts to using credit wisely and productively and controlling the debt. Every family has to lead a debt free lifestyle by having a committed frugal household budget planning with the help of the Simple Debt Free Living Plan.
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Martial Arts Students Honor Mothers with Mother's Day Pledge
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We also connect this lesson to other lessons about being disciplined and showing respect to others. Were proud of our well-rounded curriculum that teaches our students more than just how to kick and punch, as important as these lessons are for physical fitness and self-defense. According to Mr. Mackenzie, the...
Martial Arts Students Honor Mothers with Mother's Day Pledge
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California Home Building & Reconstruction Costs at an All Time High
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life insurance Student loans California Home Building & Reconstruction Costs at an All Time High
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Branson, MO Shows
Known as the live entertainment capital of the world, Branson, MO is home to 100 different shows ranging from concerts to magic acts and trick-riders to Broadway. Shows play in one of the 49 theaters which range in size from 50 seat rooms to 4000 seat theaters. All shows are meant for the whole family, which means clean, fun entertainment.
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