Holicent
VIP Contributor
It's not uncommon for a potential flip property to be listed as a "fixer-upper". That doesn't mean you should ignore the property.
While it might be tempting to walk away from a fixer-upper, there are many ways to make money on these types of properties. The most obvious is through repairs and renovations that increase the value of the property.
There are many other options, however, including:
Financing – You can finance your purchase with a hard money loan and use the proceeds from the sale of the property to pay off the loan. This allows you to avoid paying interest on borrowed funds, which would reduce your profits from flipping.
Short sales – If the price of a fixer-upper is too high for your budget but too low for conventional financing, consider pursuing a short sale instead. In this case, you'd offer less than what's owed on the mortgage and hope that the bank accepts it because they'd rather get something than nothing at all.
Foreclosure – If you're patient enough, there's always the possibility of buying an already foreclosed home and making money off it by rehabbing it yourself or hiring contractors to do so at discount prices (if they're willing).
While it might be tempting to walk away from a fixer-upper, there are many ways to make money on these types of properties. The most obvious is through repairs and renovations that increase the value of the property.
There are many other options, however, including:
Financing – You can finance your purchase with a hard money loan and use the proceeds from the sale of the property to pay off the loan. This allows you to avoid paying interest on borrowed funds, which would reduce your profits from flipping.
Short sales – If the price of a fixer-upper is too high for your budget but too low for conventional financing, consider pursuing a short sale instead. In this case, you'd offer less than what's owed on the mortgage and hope that the bank accepts it because they'd rather get something than nothing at all.
Foreclosure – If you're patient enough, there's always the possibility of buying an already foreclosed home and making money off it by rehabbing it yourself or hiring contractors to do so at discount prices (if they're willing).
