YOU'LL OFTEN HEAR THE ADVICE given by the title of this page. Is it good advice for you? Yes, it is! Why? Because you:
- Have a tremendous upside price increase possibility when you buy the worst house in the best neighborhood.
- Your investment is “pulled up” by the higher value of the other houses around yours.
- Giving any improvements you make greater value than what you spend on them. Thus, spend $1 on an improvement and it will be worth $1.50 to $1.75 when you sell the house. So $10,000 spent makes you $5,000 when you sell ($15,000 on the sale-$10,000 spent). Or $7,5000 for the $10,000 you spent. And, of course, you can borrow the money you spend for the improvements!
“SO HOW,” YOU ASK “DO I FIND THE WORST HOUSE?” That's the easy part for you. “If it's so easy, what do I do?” You:
- Decide which area you want to invest in, after you've picked the city you like.
- Next, you visit the area of your choice, in person. This is work only YOU can do!
- Look for houses needing exterior work–such as new paint, garden fix-up, new garage door or roof, sidewalk repair, driveway repaving, etc.
- Inspect the inside of the house. You'll usually find that the inside of such houses is also neglected. Why? Because sellers seldom let one part of a house fall into disrepair. They normally neglect the entire house! Knowing this, you can drive a hard bargain.
- You next figure out the cost of repairs. If you don't know know to do this, get a contractor to give you an estimate. Then you figure what price you can sell the fixed-up house for. Get the price of comparable houses in the area by looking on your local papers, checking with a realtor in the area, or reviewing recent sales prices in your local tax office.
- Put your house on the market at a price a little below similar houses in your area. You can do this before, or after, you make repairs. If you do it before, you deduct the price of improvements from the price of the house, at the closing.
- Go on buying for yourself, the worst house in the best neighborhood. Watch your riches grow using this great idea!
Copyright © 2006 by International Wealth Success, Inc. All rights reserved.
Tyler G. Hicks, the president of International Wealth Success Inc., is the author of many wealth building publications, including the Real Estate Riches Success Kit and the How To Build Riches in Real Estate with Single-Family Homes Kit.