Site Navigation

Investor Information
 Home
 Monthly Update
 Real Estate Articles
 Real Estate Videos
 Real Estate Success Stories
 Real Estate Blog
 Free Investing Books, Audios
 Real Estate Books
 Investing Glossary
 Investing Abbreviations

Real Estate Products
 No Risk Guarantee
 Best Sellers
 All Investing Products
 Real Estate Courses
 Real Estate Audios
 Real Estate Ebooks
 Real Estate Books
 Real Estate Seminars
 Special Offers

Investor Resources
 Hard Money Lenders
 Real Estate Agents
 Handyman Services
 Property Managers
 Real Estate Clubs
 Cashflow 101 Clubs
 Business Tools
 Tax Appraisal Districts
 State Foreclosure Laws
 State Property Codes
 Proof of Funds Letter

Discussion Forums
 Networking Forum
 Beginners, Carlton Sheets
 Bird Dogs, Wholesaling
 Foreclosures, Short Sales
 Sub2, Lease Options
 Rehabbing, Landlording
 Financing, Hard Money
 Asset Protection, Legal
 Commercial, Mobile Homes
 Real Estate Marketing
 Random Ramblings

Site Information
 About Us
 Advertise on REIClub
 Contact REIClub
 Positions Available
 Link to REIClub
 REIClub Facebook
 REIClub Twitter
 REIClub YouTube
 REIClub ITunes
 REIClub Testimonials
 Press Releases


Steve Cook

What is a Fixer Upper?
by Steve Cook

 
It always amazes me when I talk to beginning investors about the homes that they are looking at and calling fixer uppers. They frequently tell me stories of homes that they feel need to be torn down, and when I see them I think they are in good shape, at least as far as a rehab is concerned.

But then I think back to when I first started in this business. I consider the homes that I had been looking at and the difficulty I had in overcoming my initial impulses and making my first investor purchase.

In my early days as an investor I pursued homes that I wouldn't waste a minute of my time looking at today. I was one of those people who believed that this couldn't work where I lived, and if I had stayed on the same path that I started on, another casualty would have been listed in the book of failed real estate newbies. I used to think that homes that had dirty carpeting, needed some painting, and perhaps had a water stain on the ceiling were fixer uppers. Today I consider those homes to be in move-in condition. In fact, people are probably living in them now.

The first home that I ever bought as an investor was one that my initial instinct told me was a candidate for the wrecking ball and bulldozer. I bought the home for $38k. I completely fixed it up for $7k and sold it for $64,900. $7k can go a long way. The home looked pretty good from the outside, thank God. If the outside had looked like the inside, I probably would have walked away from my first deal. When I got inside of the home I was totally bummed out. My heart sunk, I felt nauseated and sick from the site and smell, and the heebie-jeebies that I felt brought on an overwhelming need to take a shower - and I don't mean in the home that I was buying.

The second we opened the door, the smell of cat urine just about knocked me over. I have asthma, and this house kicked it in. The carpet was torn away from the floors, and the walls were painted all different colors. I put my shirt over my mouth and nose and began to venture inside with caution. I gingerly walked across the floor expecting it to cave in. As I got near the kitchen, the first thing that I noticed was the bright orange and green paint on the walls. I was disgusted by the remains of dead roaches lying everywhere. The cabinet doors were missing, broken, and hanging off. I couldn't tell you what color the floor was supposed to be, and I never did find out.

By this time I felt a little more comfortable that the floors weren't going to cave in beneath me so I ventured toward the stairs. As I climbed the stairs, I decided to test them first by pushing down a little before allowing my entire weight to be supported by the step itself. I walked up to the second floor and into one of the bedrooms. It was painted electric blue, had holes punched and kicked in the walls, and graffiti on all surfaces. The closet doors were on the floor, and the door was hanging from one hinge. I was no longer surprised by what I was seeing. I then walked across the hall to the bathroom.

The bathroom was no prize either. The floor in here was dangerous. Next to the tub it was really soft and rotted through. I had to be careful. This room was absolutely filthy, the sink was stopped up with something that appeared to have been gooey, but had dried and hardened. The toilet was no better. I wouldn't even pick up the toilet seat to see what was inside. The tub was rusted, had stick on flowers in it, and the tiles were falling off the wall. I figured that a stick of dynamite and $10k would do the trick to bring this bathroom back to life.

Then we entered the other bedroom. This didn't have any damaged walls, but there was writing on the walls and on the door. They had tried to cover the writing up with a red and white paint mixture. They didn't do a good job of mixing it so it looked really bad.

I had only one more place to check out, and it was the basement. I immediately began to feel like I was walking into a dungeon, and was glad that there was a realtor with me, otherwise I doubt that I would have gone down there by myself. When we got to the bottom and turned a light on, surprisingly, this was the best thing the home had to offer. It was by far the cleanest room. It just needed some cobwebs cleaned up. And there was a new furnace, so I finally saw something positive about this house.

I walked out of the home feeling like I had wasted my time. I couldn't believe that someone would even try to sell such a home. I almost felt as though it should be illegal. I wasn't going to pursue the home until a friend of mine told me that he was going to buy it if I didn't. So just to keep him from buying it, I did. I was scared. I couldn't believe what I had just done.

I talked to one investor about the home and he was willing to give me $40,000 for it. I was shocked. I had a $2,000 profit before my eyes just from one conversation. But my friend made me keep this one to renovate. In the end, I put in a new kitchen, carpeting, paint, fixed the rotted floor in the bathroom, put down new vinyl tiles in the bathroom and kitchen, had the tub refinished, put a new vanity and light in the bathroom. I completed the renovation for just under $7k. The place looked and smelled new, and my initial impulse had been to tear it down.

These days I walk into houses that are much worse than that one, and I see beauty in them. I'm just about immune to the smell, if nothing else I think I enjoy the smell because to me it says CHEAP HOUSE! When you see a home that totally disgusts you, this is a good thing, because it means that most other people are disgusted by it as well and won't be interested in it.


Steve Cook
Since 1998 Steve Cook has flipped many hundreds of houses as an active Baltimore-area real estate investor. Steve's unique specialty is the "flipping homes 1-2 punch", a proven system of real estate investing that powerfully combines wholesaling and rehabbing houses. Steve Cook is dedicated to helping others succeed through understanding and aggressively applying his time-tested, step-by-step approach to flipping real estate.


Steve Cook Products (2)
CoursesRehabbing for Big Cash
CoursesWholesaling for Quick Cash


Copyright Notice
Copyright 2002-2014 All Rights Reserved. Published with Permission of Author. No part of this publication may be copied or reprinted
without the express written permission of the Author and/or REIClub.com.

Back to Top

Free Newsletter
Name:
Email:

Article Options
Printer Friendly Page
Send This to Friend

Author's Articles
A Good Contractor
Advice For New Investors
Being Broke: Career-Ending Or Creative Opportunity?
Breeding Bird Dogs
Building the Ultimate Wholesale Buyer's List
Finding and Filling Your Niche!
Finding and Working With A Good Real Estate Agent
Fix-And-Flip Tips: Avoiding Crumbling Contractor Communications
Flipping Houses Ethics: What's Your Name Worth
Getting Around The Non-assignability Clause!
Getting Started in Real Estate Investing
Getting Wholesale Buyers In The Home
Hot Market House Flipping: Can You Still Find Deals?
How Should I Adjust For Changing Markets?
Investing in Hot Markets
Is Flipping Homes Illegal?
Marketing - The Weekend Bandit
Money In Mold
Negotiating A Sales Contract On Your Finished Rehab
Negotiating Like a Pro
Nine Steps to Quick Cash: The Anatomy of a Wholesale Flip
No Money Down Real Estate Investing: Is It For Real?
Overcoming Fear (Beginning With A Vision)
Overcoming The “No Money” Pre-Offer Jitters
Part 1 - What Exactly is a Hard Money Lender Anyway?
Part 2 - Finding Hard Money Lenders
Part 3 - Profiting from your Hard Money Lenders
Pre-Qualification Letters: Why Do I Need Them, How Do I Get One, and What Should It Say?
Prehabbing for Big Cash in Hot Markets
Proper Handling of Contractors
Quality Deals
Real Estate Day Trading
Rehabbing a House From Start to Finish
Should I Quit My Day Job?
Starting your Real Estate Investing Career the Right Way
Success Strategy - Aim For The Low Hanging Fruit Part 1
Success Strategy - Aim For The Low Hanging Fruit Part 2
Success Trap-Why Investors Give Up On What's Working?
The Art of Conversing With Team Members
The Gut Rehab
The Only Contingency You Will Ever Need
Understanding Appreciation
What is a Fixer Upper?


Author's Products

Rehabbing for Big Cash

Wholesaling for Quick Cash


 
Anti-Spam Policy | Compensation Disclosure | DMCA Notice | Earnings Disclaimer | External Links Policy | Privacy Policy | Terms And Conditions | View Cart
©2002-2014 All Rights Reserved. REIClub.com