Here’s a real estate “trick” that might seem confusing, yet when you dig into it, you’ll realize a whole new world of opportunities — and money-making.
Are you ready?
When you’re looking for a good piece of investment real estate, look for and buy the worst house in the best neighborhood.
Read that again.
Ask yourself, what matters most in real estate? You know that it’s three things –
- Location.
- Location.
- Location.
The neighborhood is everything in a real estate deal. Is the neighborhood nice, safe, convenient, with good schools, etc.? Thus, a run-down house in a great neighborhood can only go up in value, whereas even the best house in a terrible area has no place left to go but down.
Got it? Good.
But 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.
- Any improvements you make create 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!
ADD TO YOUR CART . . .
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HOW DO YOU FIND THE WORST HOUSE?
That’s the easy part for you.
Here’s how you find the worst house in the best neighborhood . . .
- Decide which area you want to invest in after you’ve picked the city you like.
- Visit the area of your choice in person. This is work only YOU can do!
- Look for houses that need 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 insides of such houses are 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.
- Figure out the cost of repairs. If you don’t know know to do this, get a contractor to give you an estimate.
- Estimate what price you can sell the fixed-up house for. Get the price of comparable houses in the area by looking in 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.
Start looking for the worst house in the best neighborhood.
Then buy it and make money just as described here.
Follow the plan and watch your riches grow using this great idea!