How to Buy Fixer-Upper Properties
Fixer-upper properties require an initial investment plus repairs and updates to make the property ready to live in or to put on the real estate market. These properties come in the form of foreclosures, older homes and other homes that have not been properly updated. Finding fixer-upper property requires searching through listings, visiting the property and assessing the repair and update requirements to ensure that the investment is sound enough to offer a profit or increase in equity when completed.
Other People Are Reading
Instructions
-
-
1
View your local newspaper for a list of current foreclosed property available. Write down the address and owner's name of the property.
-
2
Contact the local and national banks in your area. Speak to a representative in the foreclosure department. Ask for a list of the foreclosures owned by the bank and request their website to view current listings, if one is available. Also, visit the website of the U.S. Department of Housing and Urban Development (HUD) for a list of foreclosed property.
-
-
3
Visit a local real estate agent's office. Ask for a list of property that is listed below market value. These homes have potential to be fixer-uppers. Set an amount that you wish to spend. Ask for all property listed below this amount and review them to determine which ones are listed at an inexpensive price.
-
4
View all of the properties that you are interested in by visiting them and viewing the outside and inside of the home to assess damages. Determine whether the home is cheap enough to prove to be a sound investment even after all repairs and updates are completed.
-
5
Contact a lender or mortgage broker in your area. Present the lender with the required documents, such as previous tax returns, employment verification, copy of pay stubs and any other income sources. Complete a loan application for a preapproval. Use a privately owned bank to finance the property if a mortgage broker is unable to approve the loan for a fixer-upper. These banks handle in-house financing and have more leeway when underwriting loans.
-
6
Write an offer on the fixer-upper property you are interested in. Include a copy of your preapproval letter with the offer. Also, include earnest money with your offer to show that you are serious about purchasing the property. Negotiate the contract until both parties agree on all terms and conditions. Allow your lender or finance company to guide you through the closing process.
-
1
