Kitchen Needs Upgrades how to invest in real estate real estate investing beginner real estate investor

Chasing #Foreclosures! The Needy Upgrade House! #foreclosure

It’s Foreclosure Saturday! We have a standing appointment every Saturday to meet with our Real Estate Broker and look at foreclosures. We believe the real estate market is poised to take off and we want to be on-board the rocket ship! Therefore, we are always looking. When you think of foreclosures, you probably think of properties in poor condition, and sometimes they are … In this case, we are viewing a 4 bedroom 2 full bath and 2 half bath townhouse that needs work/upgrades. The common term for this property would be “fixer upper.” When we visit fixer uppers, we estimate how much work we have to do to get the property in condition to be rented.

The kitchen is arguably the most important room in any home. For renting, it is not really necessary to do the following, but it would improve our chances of finding a quality tenant who stays longer than one year. In our opinion, several items need upgrading:

  1. Wallpaper needs stripping
  2. Walls need fresh paint
  3. Cabinets need refinishing or upgrade
  4. Stove/Oven and dishwasher needs replacement or upgrade
  5. Pergo hardwood floors need refinishing

The woodpanels in the 4th bedroom or den on the lower level needs to be removed. Drywall repair may be necessary, and a couple of coats of fresh paint.

The living is very large, with a walkout to a deck. Pergo hardwood floors need polishing or refinishing.

The family room on the lower level has a huge fireplace! Our real estate broker pointed out that the brick around the fireplace is real, but the rest is prefabricated. We had to touch it to believe it!

When we view a foreclosure, we estimate how much it will cost to make repairs. We subtract that amount from the list price. Since we are assuming risk, we also knock off an additional 10% -20% from the asking price, depending on the condition of the property. We begin negotiations with the seller by making an offer. The first offer is a test to see where the sellers “low point” is. Once we receive a response from the seller, the negotiations begin! In this case, a major bank owns the foreclosure, so there is no emotion involved on the seller’s part. We have learned that it’s best to deal with emotion-less sellers. When making low-ball offers, we don’t have to worry about insulting the seller. To learn more about negotiating real estate transactions, click here.

To see more of our foreclosures, watch our Chasing Foreclosures playlist on YouTube!

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The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.


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