Real Estate Foreclosures
Buying and Selling Distressed Houses for Maximum Profit
FRW is Foreclosure Realty
If you want to become a successful real estate investor in today's depressed real estate market, find a
"fixer-upper" owned by an anxious seller or find foreclosures.
Finding foreclosures or distressed houses at bargain prices, fixing them up,
and then selling them on a consistent basis can easily make you a millionaire,
with a little work too!
Why Sellers Sell At a Discount
The homeowners' personal problems often prevent them from maintaining their home's,
and factors such as job loss, divorce, serious illness, various personal
addictions, higher payments, increasing interest rates, or other problems impact them. 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
Look for the "Triple D"
Home sellers with three problems give beginning investors a great real-estate
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 its best possible condition.
As you look through the classified ads or at Realtor®
MLS home listing real estate websites, keep an eye
out for distressed housing 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
How to Close Quickly
Find an experienced lender and get yourself not only
"pre-qualified," but also "pre-approved." Taking a
second step assures worried sellers you already have your
home-loan in-place for their property, and this puts you 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
When you're new to the fixer game, 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
buyers want and must offer the number of bedrooms, bathrooms, and amenities
they're seeking. Beyond the price, however, buyers purchase the real estate which
meets both their basic home requirements and also their emotional and housing budget needs.