The million dollar question, “Are fixers a good idea in bad areas?” If you do a cursory search in the search engines using our question as the search parameters you will find a variety of different answers. Some realtors say, “Location, Location, Location,” others say, “No, it is a bad idea,” and still others will say, “Just do it.” It is our experience that when it comes to investing in distressed properties or fixer-uppers it is important to take a balanced approach. That means study and research. It is probably not the best practice to simply accept what anybody says about a piece of property without doing the proper market research. When looking to buy a home or commercial real estate take the following steps to determine your best course of action. Remember nobody will care about your investment better than you.
- Check the value of the homes in the immediate neighborhood.
- Compare, “apples for apples” homes. AKA. A competitor analysis.
- Crunch number, make sure the amount spent to fix it up is worth it.
- Have a really good home inspection done to determine potential pits falls.
- Have no less than three contractors bid the project. See www.ContractorLicenseNow.com
- Talk to a seasoned flipper.
- Seek counsel from a seasoned realtor.
These seven steps are not a perfect set of steps in determining whether a distressed home is a good investment or not, but by taking these steps you will be more informed and equipped to make the best decision possible. If you have any questions, we invite you to give us call we would love to help.