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  Home  > Money >  Real Estate
 
Profit From a Fixer-Upper
by Donald Van de Mark

Call it the defect that works for you.

A weird kitchen, terrible landscaping, no bathroom on the ground floor any of these flaws will force a seller to discount the price of a property. If you've been house hunting, chances are good you've seen the discounted dwelling. The listing sounds good (don't they all!) and the price seems very good. But your real estate agent cautions, "This one ... well ... has a problem."

 
Fixer-upper dos and don'ts:

Look for fixers that need mainly cosmetic changes.

Avoid run-down houses that need major structural repairs.

Find the least desirable house in the most desirable area.

Know what the average house and the most desirable houses in the area sell for.

 
 

Perfect. As long as it's not a problem to you and even better if it's a problem that can be fixed.

I've made money on three different properties. The two with the biggest "problems" also showed the biggest appreciation. They had flaws that I didn't care about and that could be fixed or finessed.

The first was a 40-acre farm in northern Virginia. What was I doing buying a horse farm in Upperville, Va., in the first place? Well, I thought Washington, D.C., real estate was too expensive and I like fresh air. So I trekked over hill and dale for two years looking for a country cottage on an acre or two. What I got was 40 acres with a 10-stall barn, riding ring, two sheds and a location that millionaires fight over. Philanthropist Paul Mellon was a neighbor.

Wonder how I could afford this farm? It had a "problem" that forced a discount: filthy shag carpeting. The millionaires turned up their noses at the little, kitschy two-bedroom house, and the rest of the folks either couldn't handle the acreage or couldn't see beyond the shag.

I paid $320,000, ripped up the shag, hired locals to hay the fields, rented the barn to a racehorse owner (covered half my mortgage) and sold the place two years later for $439,000.

Need more convincing that a defect may be your best bet?

Even Uncle Sam's In on the Deal


Related Stories
• Househunting Online
• Drop Your Mortgage Insurance
• Enlighten Your Backyard
• How to Connect in Business

 

 


Related Stories
• Househunting Online
• Drop Your Mortgage Insurance
• Enlighten Your Backyard

Web Links
• Do-It-Yourself
• Fixer-Uppers: A Great Strategy
• NetTips (Home Improvement)
• How to Do It Yourself

Related Books
• Buy It, Fix It, Sell It: Profit!, Kevin C. Myers
• Find It, Buy It, Fix It, Robert Irwin
• Profiting from Real Estate Rehab, Sandra M. Brassfield
• How to Find Hidden Real Estate Bargains, Robert Irwin
• Building Wealth: From Rags to Riches With Real Estate, Russ Whitney



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