This is the second article in a blog series on real estate fixer upper investing tips. You can read Part 1 here.

Buying a Real Estate Fixer Upper – What to Look For

When you get up into the higher price points, there is more potential for a bigger margin, say a 20% or 25% ROI. The people who generally make the most money with a real estate fixer upper are people who do the work themselves, or have their own team of contractors that do the work at very low rates.

Here are some tips that I give to all of my investor clients:

  • The under $400,000 or just over $400,000 price point (for single family homes or townhomes) is a very popular price point for first time home buyers, and these buyers generally like upgrades a lot. Single family homes are the most popular, then duplexes (duplexes usually don’t have HOA fees) and townhomes. A good return for a quick real estate fixer upper on properties at this price range is 10% of your purchase price. Since these properties are less expensive, they carry less risk with regard to your investment.
  • It’s important that the upgrades needed are primarily cosmetic, but that the house has good bones, and (at least for the most part) functioning systems. The systems don’t have to be NEW, but ideally they would be functioning well. If you’re paying for roof/HVAC/etc. as well as all the cosmetic features, that can get expensive very quickly.

Read Part 3 of my blog series on real estate fixer upper investing tips.

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