DFW Real Estate

DFW Real Estate Articles: 2008

Tackling "Fixer-Uppers"
© by Mike Stevenson

Maybe you've heard of them -- properties that need more than a little TLC -- sometimes known as fixer-uppers. The term covers a wide variety of properties that need some degree of help just to rise to the level of average. Some fixer-uppers may need only cosmetic repairs or some updating -- others need more serious remodeling or a significant structural cure. In all cases, the usual goal is to purchase such properties at bargain prices and "fix-them-up" in order to resell them at a profit. Because I specialize in residential properties, I'm going to approach the subject from that angle.

How does a house come to be a fixer-upper?  Sometimes through neglect... sometimes because of uninsured damage or a combination of age and the owner's financial woes. No matter the cause, such houses if sold as is, are going to sell at deep discounts on the market. A carefully chosen property of this sort might be bought for a song and refurbished into a normal or even "better" home worthy of top market price. Here's the challenge... evaluating the properties current condition, the cost and time required to "fix-it-up" and the likely price at which it might be sold.  For those with skill in this art, there's serious money to be made. Newbies -- beware!  A miscalculation in your estimates will only make money for the contractors you'll hire to bail you out of the mess.

Consider the following when tackling a fixer-upper:

1. How much will it cost to refurbish the house?
2. How long do you plan to own the property?
3. What will the market be like when you sell?
4. How much will it cost you to sell it -- including sales fees and closing costs?
5. Will you be making payments on the house while you're fixing it?
6. Do you intend to live in the house while you work on it or after it's finished?
7. What is the highest price you're likely to sell it for in this neighborhood?

So, what should one look for?  Your best bet will be houses that can be cleaned-up, patched-up, painted, re-carpeted and lightly landscaped. If you start going very far beyond replacement light fixtures, doorknobs and faucets, the costs can rise quickly and eat-away your profits. It's a good idea to team-up with a knowledgeable real estate professional too. They can help you to rent, trade or sell your "fixers" with the least amount of trouble and for the highest possible prices. Why not consider buying a book or two and reading-up on this real estate technique? Fixer-uppers can be a good source of income and an interesting hands-on business for those who approach the task with good information and the right kind of attitude.

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