Fixing Houses for Resale: Three Beginning Steps to Increase Profits and Have Fun

Real estate investors specializing in fixers make higher profits when they have a detailed work plan and know how to get around the future resale appraisal issues.

Before you begin your fixer makeover, taking a few extra steps helps you make more money, avoid future appraisal pitfalls, and have more fun.

1) Planning for Profits

Visualize your final home presentation for sale. Write out a description of the future home you imagine for your sales flyer. Name your home something other than just the street name; calling your fixer "Edna Street" doesn't inspire like "Sugar Plum Cabin." Your overall design plan helps you when shopping for building materials with choosing design details that go together for a harmonious whole house theme.

2) Take Photographs for Your Future Appraiser

You may have taken photographs during the escrow process, showing the seller's possessions in the home. If your property was occupied during escrow, it will be worthwhile to take "before" photographs again, both for your own satisfaction and to show appraisers when they ask why you expect to sell the house for so much more than your original purchase price.

Detailed photographs substantiate the original condition of the property, compared to the final result. Avoid possible complications by showing the appraiser all the improvements that you made to the property, in order to get the full amount you deserve in your upgraded appraisal. This is a crucial step, because the appraiser must give you credit for your work and expenses, and not use your purchase price as the basis for the updated home's true market value.

3) Hold a Doghouse Open House Party

We like to invite friends and family for a preview open house before we begin major work on the house. We ask them to bring any unwanted household fixtures or supplies and to offer any fix-up ideas, wild or practical, that may occur to them during their visit. We jot those ideas into a "transformation journal," and refer to them when we need fresh inspiration.

Here's an example of our invitation:

Your presence is requested at Jeanette and Brian's Doghouse Open House. Come view our latest project and understand why we'll be busy for the next month.

Please bring cuttings from your garden and any unwanted paint. Any household or building material hand-me-downs will also be greatly appreciated!

Sunday afternoon, noon to four.

Another reason for a preview party is that the amount of work a doghouse may need sometimes seems overwhelming, and a fun event like an open house helps to overshadow the crushing weight of the work we have waiting for us.

Taking these first three steps helps you ultimately make more money, avoid appraisal problems, and have fun fixing houses for profit.

(c) Copyright 2005 Jeanette J. Fisher. All rights reserved.

Professor Jeanette Fisher, author of "Doghouse to Dollhouse for Dollars: Using Design Psychology to Increase Real Estate Profits" and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, and newsletters see http://www.doghousetodollhouse fordollars.com/pages/5/index.htm

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