What is a "Fixer Upper?"

A fixer upper is a home in need of some repair. As a result, fixer uppers can usually be purchased at a significantly discounted price. After the purchase, a few inexpensive repairs will usually add enormous value to the property.

If you are trying to make money with a fixer upper, consider the following:

•    Inspect the Home: Make sure that the property is in sound condition, without any major structural problems. Minor repairs should be expected. After all, a fixer upper will inherently require repairs. A cracked foundation, for example, isn't a minor repair… it's a multi-thousand dollar disaster.
•    Location: Price isn't everything. Make sure the home is in a good location with a low crime rate. Take into consideration the area’s restaurants, schools, parks, entertainment attractions, and other amenities.
•    Proximity to Buyer's Home: If possible, the home should be somewhat close to the buyer’s home. Purchasing a faraway home will necessitate long commutes, turning simple home repairs into costly, time-consuming hassles.
•    Potential Renter Interest: The home's seller or tenant will vacate as soon as the title is transferred. Make sure you find a home that will have serious interest from potential buyers or renters. In some cases, you may be able to find a tenant that is willing to live in the home at a discounted rate while it is being repaired. This only applies to properties that are in a state of mild disrepair.
•    Seller Motivation: Buyers should purchase a home from a seller that is extremely motivated and anxious to sell the property. Unmotivated sellers are typically less willing to reduce their asking price and/or negotiate other conditions that would favor the investor. There are plenty of motivated sellers in Central Florida whose homes can be inexpensively purchased.

It isn’t uncommon to find homes in need of repair for at least 30% below market value. After a few minor fixes, these homes can be sold again for a profit. With a little elbow grease, some patience, and discerning eyes, it’s quite simple to make money with a fixer upper in Central Florida.

Here is part 4 of 4. The last video on my flip in Winter Park Florida. This video shows the rehab on two bathrooms. The hall bath we gutted and replaced a lot of rotted wood. It was just like most the bathrooms we rehab. I like to gut bathrooms and start over unless the tub and tile look updated. In the master bathroom we pushed the shower back a little over two feet into one of the master bedroom closets. This gave me enough room to install a vanity and give a little wiggle room to the new buyer. We built a new closet to replace the one we removed. Both baths are brand new from top to bottom and will help increase the over all value of the home.

Here is part 2 of the Winter Park Florida home I just finished rehabbing. In this video I show how I take a porch and turn it into a den and indoor laundry room. Before the washer was in one closet in the kitchen, the water heater was in the other and the dryer hook up was outside in the utility shed. I turned the 2 closets in the kitchen into pantries and moved the water heater, washer and dryer hook ups to the new laundry room.

I also show the new A/C system installation. This home had no central air and no attic space. We had to create a place to run the duct work. We built an arch to get air to the kitchen, dining, living and it connected into a box along the ceiling in the new laundry and den. The rest of the house we built a drop ceiling in the hall and ran the duct work to the entrance of each bedroom and bathroom. We had to do the same in the entrance to the master bedroom and had to drop the ceiling in the master shower to reach that area.

When flipping homes you can run into some challenges and you have to find ways to fix problem areas in a way that a buyer finds appealing. Mid Florida Investment Properties has seen just about everything in the past ten years of flipping homes. We share our expertise at no cost to anyone that buys from our company. Mid Florida Investment Properties offers free consulting, marketing when the rehab is complete and we list the property for you. Both Mike Calvert and Tammy Kerr are licensed realtors with Sand Dollar Realty Group, Inc. Tammy and I both list our buyer’s properties for half the price other realtors charge. This saves our buyer’s thousands of dollars when they sell their property.

Mid Florida Investment Properties #1 goal is to make our buyer’s money. If we do our job we know that we will create repeat business and build strong relationships!

Here is the 31 Areca home in Azalea Park. MFIP sold this home to another investor back on 6/22/2009 for $52,000. This home recently sold on 11/13/2009 for $122,900. The investor made a huge profit.

7751 Boreas is another future success story. This home was also purchased from Mid Florida Investment Properties (MFIP) by another real estate investor. The home was purchased on 9/22/2009 fo $75,000 and is now pending at $130,000. The closing date is set for 12/21/2009. We received an offer right away on this home and we are closing right after the 90 day seasoning. Another huge profit!

Here is another home purchased from MFIP. The investor bought it from MFIP for $49,900 back on 10/15/2009 and it is now pending at $100,000. For this home, we have a conventional buyer and can close before the 90 day seasoning period.

These are just a few of the many homes purchased from Mid Florida Investment Properties, LLC. MFIP wholesales properties like these all the time to other investors. We also help investors who buy our wholesale properties with consulting during the rehab and also help sell the home when complete. There are several properties close to being completed and we will have many more updates coming soon.

Make sure to sign up for our email alerts on our www.buymfip.com site. This will keep you updated of any new properties when they come available.

Check out this great rental or flip in East Orlando. This home has 4 bedrooms, 2 bathrooms and over 1400 sqft. It would take under $5,000 to get this home rental ready and under $20,000 to flip it.

COMPARABLES
- 959 Park Manor dr, 4/2, 1338sqft, sold $140,000 on 10/26/2009
- 10598 Jane eyre dr, 4/2,1619sqft, sold $140,000 11/13/2009
- 900 Wages way, 3/2, 1304sqft, sold $143,000 on 7/10/2009
- 755 Bernice ct, 4/2, 1711sqft, sold $142,000 on 8/27/2009
- 10421 Westley way, 4/2,1845sqft, sold $132,500 on 11/13/2009

PROPERTY REPAIRS FOR FLIP
- Kitchen ($5,000)
-Master bath ($1,500)
-Bath 2 ($500)
-Bath 3 ($0)NA
-Floors ($2,000)
-Painting ($3,000)
-Roof ($0)
-Doors ($500)
-Baseboards ($0)
-Windows ($0)
-A/C ($3,000)
- Fixtures ($500)
-Electrical ($0)
-Landscaping ($1500)
-Drywall ($500)
-Texture ($500)
-Pool ($)NA
- Stucco ($2,000)
- Total Repairs ($20,500)

Property is sold AS-IS. Cash or hard money only. Buyer pay’s all closing costs.

Price $69,999

Disclaimer:

* These repairs are based on average repairs from MFIP flips.
* Buyers are responsible for getting their own estimates.
* The numbers above are not based on numbers from a licensed contractor.
* The numbers above are to give buyers a general idea of what the repairs should cost.
* It is possible that MFIP could miss a repair that is not listed above.
* All buyers are encouraged to look the property over with a licensed contractor.

The front

Here is the front of my flip. I picked this lake front gem up for $114,500 and tried to wholesale it for $125,000. After nearly a month with no success I decided to rehab this home myself. This is something I do all the time and I do it because I won’t try to wholesale anything that I wouldn’t rehab myself. I have proven this time and time again. In fact most of the homes I rehab are those homes nobody wanted. So here I go again with the home that no one wanted. I plan on spending $40,000 on the rehab and selling it for $250,000. My goal is to net $75,000 and I will keep those that are interested updated throughout the process.

The first thing I wanted to do was replace the roof to protect future repairs on the inside.

The next project on the front was to demo the garage and prep for a new garage door. This home was a 5 bedroom, 4 bath home with 2282 sqft under air when purchased. When complete the home will have a 2 car garage with 3 full baths, 3 bedrooms with a 4th bedroom option and around 1900 sqft. This home really needed a garage for parking and storage. The last thing you would want to do is obstruct the lake view out back with a storage shed.

The new stucco

The new stucco, new windows and window bands really turned out great. This home had a lot of repairs needed to the block and to make the home look right I chose to stucco the whole house. The windows were old, non functional and had to go. One thing I have learned over the years flipping homes, is that once you improve one area other areas don’t look so good. Once the new roof and windows were installed the soffit looked terrible.

Now I have nice new stucco, windows, roof and ugly soffits. The next thing I had to do was replace the soffit with aluminum siding.

New soffit

Now that makes a huge difference in the outside appearance.

New paint job and the grading for the new driveway

This home now has the feel of new construction. This transformation was all done under 15,000 dollars and I am right on schedule with my 40,000 budget. The inside is where I tend to get carried away and I will have to contain myself to keep this flip on track.

Stay tuned!

Buying and flipping a home can be an exciting and extremely profitable venture. However, you have to assess your remodeling costs correctly in order to keep those profits high. In order to predict your total remodeling costs and plan an accurate budget, you’ll need to know as much about the ‘basics’ of the home as possible. This entails an honest look at the inside, outside, foundation, plumbing, electrical and attic conditions before handing over your money.

Just looking at the possible curb appeal, style of the home and location may cause you to miss structural problems that may need more work, time and money than you bargained for. The key to identifying a good fixer upper is to look with a critical eye. Keep searching for the hidden reason that this home hasn’t already sold and hopefully you’ll prove yourself wrong and have an excellent candidate for a flip on your hands.

Assuming you’ve already assessed the value of the neighborhood, here are steps that will help you focus on the infrastructure of the home and avoid surprises later.

Inspecting the Roof: Does the roof have an overall ‘wavy’ appearance? This is caused by water damage or too many layers of repair work. If shingles are moldy, this can be another sign of a damp, damaged roof. Do you see more than one layer of shingles? Building codes generally allow one additional layer. If you see more, there is probably an entire re-roof in the near future of this home.

Electrical Inspection: When looking at the meter base outside, does everything look fairly new and in good shape? Is there a fairly new air conditioning unit outside the home? Check the amps running to the home at the main circuit breaker. 200 amps is the best, but a home with electric heat should have a minimum of 150 amps. Check the utilities and wiring for cable, phone, etc.

This is also a good time to check the appliances inside the home. Does the kitchen have a garbage disposal, dish washer and all expected appliances? If so, do they work properly? Where are the washer and dryer located? Is there a proper outlet for the dryer? Check all the other outlets as well. The bathroom and kitchen outlets should be three pronged. If they aren’t, they will need to be upgraded.

Foundation and Structure: Does the house have wood siding or a wood frame? Most homes in Florida don’t, but if you run into an odd style or are considering a purchase in a historic neighborhood, you’ll need to consider extra inspections. Wood has the potential for termite damage and you’ll want to hire a professional inspector that knows how and where to look for signs of termite damage.

What is the foundation of the home? Brick foundations were used in some older homes. Look for loose areas and gaps, which allow rodents to enter. A concrete slab foundation can mean costly plumbing repairs if there is ever a plumbing issue.
Water Damage and Plumbing Inspection: While the plumbing is fresh on your mind, walk through the house and check all the ceilings and window areas for signs of water damage. Ceiling stains can be a sign of an AC unit that leaked or roof damage that allowed rain to enter the home.

Find out what the pipes are made out of. Copper piping doesn’t do well in Florida and has the tendency to leak. PVC is best. Check all the plumbing to be sure it works. Look under sinks and around tubs and toilets for signs of leaks or damage. How old does the water heater appear to be? Is there rust or corrosion near the bottom of the unit? The water heater should be 30-40 gallon capacity and easily accessible.

Attic Inspection: Check for insulation that is 7-8 inches deep. Take a flashlight and look at the underside of the roof sheeting. Are there signs of prior water damage, rotting or current leaks? Is there any bow to the rafters? How well ventilated is the attic?

These pointers should give you a realistic view of the condition of your fixer upper. These are not all-inclusive and more surprises may be found along the way. Use this list to keep your excitement in check when looking for a potential home to flip. It may be disappointing to discover that your ‘perfect flip’ turned out to be more work than you bargained for, but it’s better to find out what you are up against from the beginning so you can budget accordingly. Ideally, your perfect fixer upper will include cosmetic repairs, paint, yard work and minor repairs.  Anything else should be carefully considered and budgeted before making your final decision.

How to Find a Diamond in the Rough
In the house flipping industry, a handyman special is generally considered to be a property in need of cosmetic work such as paint, a thorough clean up, yard work and maybe some minor repairs such as holes in a wall, bathroom fixtures or even changing out carpeting for tile.

A handyman special is not a property in need of a new roof, new plumbing, or one that has sustained serious flood or hurricane damage.

When looking for your handyman deal, here is your first word of advice. If a home is advertised as a handyman special, you can generally rule it out altogether. Your idea of ‘in need of repair’ and the seller’s idea are usually worlds apart. Try to think like the seller would. If you were putting a home on the market that needed a paint job and new carpeting, you would generally avoid those issues and capitalize on the selling points in your home description. Only when a home is seriously dilapidated does the owner use the term ‘handyman special.’ This is due to the fact that he realizes how bad of shape the home is in.

With that said, feel free to check out properties that are advertised as ‘handyman specials,’ but expect the worst because you’ll probably be right.

Assessing the Costs
When you’ve found your true diamond in the rough, do your walk through and carefully write down everything that will be needed to get the home into prime selling condition. This seems like an easy process and it should be, but it is worth mentioning that ‘prime selling condition’ may be different to every person.

When planning the cleanup of your investment property, keep cosmetic improvements neutral and classic. Don’t paint walls odd colors or add fixtures that reflect highly individualized taste. Neutral tones and fixtures that stay within the look and feel of the home are important. Realize that you are creating the look of a ‘model’ home. Leave the redecorating ideas up to the new home owner.

Calculate your total cost on based on real prices. Don’t guess. You may be hundreds or thousands of dollars off base. If you are replacing the carpet in a bedroom, take the time to measure and call for estimates.
Can You Sell at a Profit?

A handyman special is only a good deal if you can purchase the home at a substantial enough savings to allow you to turn a handsome profit after all the repair costs are factored in.

To calculate your potential profit, consider the following factors:
• Initial Investment – This includes the purchase price, interest, cost of renovations and improvements, money paid out to contractors and the amount of time you’ll need to invest.
• Potential Sale Price- Are your repairs going to make a substantial difference to the value of the home? What are other homes in the same neighborhood selling for? Consider factors that you won’t be changing and how they may affect the selling price. Are the bedrooms unusually small? Are the ceilings low or does the home sit next to another home in disrepair? Realistically looking at issues that may still exist after the work is done is the only way to make a true assessment.
• Turn-Around Time – An important factor is the amount of time it will take to make the repairs and put the property back on the market. The faster you can get this property in front of potential investors, the less money you will lose making extra house payments.

One final piece of advice for the handyman special is to be a good investigator. Don’t assume that every property in disrepair is due to the laziness of the owner. If you see that the yard needs plenty of work but you also notice that patchy brown grass seems to be a trend on the block, don’t be afraid to talk to the neighbors. Maybe you will find that the street has such poor drainage that the entire block floods every time it rains. These tidbits of information can be priceless before making final purchase decisions.

In order to become a skilled investor who knows how to work with handyman specials, you’ll have to learn not to gamble with your profits. If you have a thorough understanding of the market and all costs involved in improvements, you’ll be able to take a money-making, no-nonsense approach to the handyman special.