Houses can have lots of problems
Real estate investing requires expertise in recognizing these problems and the costs for repair.
Sometimes you stumble onto a jewel investment by discovering a house where mom was an excellent housekeeper, and all that's necessary is minor cleanup of the premises to prepare for selling. But the truth is that most people don't even sweep the floor when they move after the house is sold. And sometimes the house they leave behind is a wreck.
If a yard looks trashy and overgrown, you know how to pick up the garbage and mow.
If the walls look drab and shabby from years of neglect, you know how to replace new wall paneling or repair holes with wallboard mud. If these basics are not understood, you can always get a quick lesson at your neighborhood Home Depot or Loew's.
But zilch experience is necessary for slinging a paintbrush, unless you are just sloppy. Paint is the easiest of options in giving fresh renewal to property.
Cosmetic repair is simple and easy. You can either do it yourself or hire a handyman.
Houses that really only need some yard work and a few gallons of paint are readily found in the real estate buyer's market. But these houses tend to be far from deeply-discounted or bargain-priced investments.
Some house problems constitute severe potential pitfalls in real estate investing. The most critical problems are foundation irregularities and mold.
I inspected a house recently that had serious foundation problems. My attention was first called to the entrance steps with broken brick due to shifting of the house on its foundation. As I walked around the inside of the house, I saw that the sheet rock had cracked in several places on the level above the entrance steps. What was obvious to me was obvious to every other buyer who had seen the house, which explains why the property had been on the market for over 200 days. So as this red flag went up about the foundation problem, my curiosity was also raised about the cost of repair. I know nothing about foundation problems, and I would never tackle such a problem on my own. But I knew there were specialists in the area with expertise in foundation repair. So, I got a couple of estimates before deciding if the purchase price was fair.
Mold!!!
One of the most serious problems in buying any house today is mold contamination, especially in the southeast. This is a recent problem that we never experienced in the past with such prevalence. Let me warn you: repairing a mold-infested house can cost you big bucks. Even in excess of $100,000!
An infested house must first be tested by a certified lab to ascertain the extent of damage. A third-party contractor usually takes responsibility for repair after the initial test. Then the testing lab must re-evaluate the premises after repair to confirm whether toxicity levels have been reduced to acceptable standards. Then, and only then, can you re-enter the property to make modifications or paint. You are in a heap 'o trouble, boy, if you buy a house WITH MOLD, unknowingly or knowingly, and if you fail to remedy the problem or try to sell without disclosure. Just write it off as a bad experience and bad investment if you buy without taking remedial costs into consideration. Mold is a serious problem in today's housing market.
This warning doesn't mean you should not buy any house with mold infestation. You can obtain firm bids (not estimates) for repair on some situations. However, damage can be so severe and widespread that even mold-removal firms will not even quote a firm bid! Factor the remedial repair into the buying price and the selling price. Be prepared, however, that it just won't work in some cases.
Mold is damaging to health. Some people are more sensitive to mold than others. Mold replaced the asbestos scare of the '70s and '80s when Texas homeowners sued insurance companies for millions of dollars over mold damage. The mold problem has migrated from the South and is moving into northern states. Many Alabama insurance companies went out of business because of the mold problem, and those insurers left usually refuse to insure any house with mold history.
Don't let mold catch you with your pants down!
Most houses have some kind of problem or problems. Learn to distinguish between the cosmetic and serious problems, and recognize that solutions are usually available for either. You, the real estate investor, must become a problem-solver of house problems.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.BigMoneyinFixerUpp ers.com/nomoneydown/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online "Academy of Advanced Real Estate Investing Techniques" at http://www.AAREIT.com/
Congratulations! You've made your decision; you've chosen your new home... Read More
So you're thinking of getting into a bigger house. You... Read More
One of the main reasons home sale transactions fall apart... Read More
Are we in a housing bubble? To answer that question... Read More
The best price to sell your home is always determined... Read More
I was in the rental business for seven-years, made 1.3... Read More
Let's say you've had your home on the market for... Read More
If you're thinking about selling your home perhaps the 'for... Read More
The biggest secret of conducting a successful lease purchase business... Read More
In an earlier article, we presented various options for ensuring... Read More
One of the most common causes for disputes occurring after... Read More
Where should you invest in real estate? If you know... Read More
Being a real estate investor is not really that hard,... Read More
When it comes to buying investment real estate, there are... Read More
Real estate investing runs the gamut in terms of risk... Read More
That's an obvious question ? we all do! So what... Read More
These are real building questions that I received from readers... Read More
Analyzing and finding the right property deals:Firstly read my other... Read More
Given the current interest (dare I say hysteria) associated with... Read More
One of the most important considerations you will need to... Read More
Every one should have a home inspection before purchasing any... Read More
Almost anyone can become a rural property owner; if you... Read More
There is more to buying raw land than meets the... Read More
Interested in investing somewhere other than your back yard?Management companies... Read More
There are many frequently asked questions and any local real... Read More
When I was a young child I had many annoying... Read More
Anyone interested in real estate should be able to talk... Read More
You don't get what you deserve - you get what... Read More
The home selling and buying process can be confusing. This... Read More
Apartment hunting is not the easiest thing around. You may... Read More
Branding can be done to any product, or any person.... Read More
It's high time someone advocated the use of common sense... Read More
My husband and I were eating breakfast at the Good... Read More
Is there a perpetual shadow hovering over your house? Do... Read More
Did you know that every year thousands of UK properties... Read More
Selling income property isn't like selling a house. You can... Read More
If you are in the home buying or selling market,... Read More
Sometimes when we are very busy professionals and very rich... Read More
Selling your own home can be a time-consuming and frustrating... Read More
There is a relatively new and not always well understood... Read More
In the sales contract, the sellers of your new home... Read More
I invite you to take the next few minutes to... Read More
We Sussex Countians are fortunate in many ways as we... Read More
Analyzing and finding the right property deals:Firstly read my other... Read More
One of the biggest problems individuals just starting out have... Read More
Whether you list with an agent or sell on your... Read More
An education of some sort is a prerequisite these days... Read More
There's something you should know about PMI!Private mortgage insurance is... Read More
Turkey is a paradise of sun, sea, mountains, and lakes... Read More
If you have recently purchased some real estate for investment... Read More
Here's the gripping story...You are the landlord of a small... Read More
When you buy a home, you need to be aware... Read More
Property Investing: Here Are Two Important Tactics You Must Do... Read More
If you don't have the time to invest working on... Read More
This article will show you how to sell your home... Read More
I have done so many appraisals where I saw obvious... Read More
So you think you might like to buy an old... Read More
If you want to buy a house but don't think... Read More
Moving from one house to another is always a challenge,... Read More
One of our investor students told us of an interesting... Read More
Las Vegas is known for it's over the top hotels... Read More
Today we discuss escalation clauses because much of the country... Read More
Investing in commercial property is well beyond the financial means... Read More
A REAL ESTATE STOCK PLANGetting out of the bleachers and... Read More
As a Professional Real Estate Inspector I get to see... Read More
If you are considering buying a home or have spent... Read More
Real Estate |