STUDENT DAN UPS VALUE 62%
Some people try to avoid problems in their lives. However, I will suggest to you, that in the world of real estate investing, finding and solving problems can put money in your pocket. Remember, problems usually will cost the property seller a lot of money. However, as a buyer, problems can be disguised opportunities. These problems don’t need to be so big that you need engineers and heavy equipment operators to fix. You will be able to fix them for only a few dollars. These will be problems that others overlook or choose not to address.
FLAT ROOF, CLOGGED DRAIN, BAD FLOORPLAN AND A DUMP NEXT DOOR
How appealing does that sound to you? Well, I bought my Miller Street house with these problems. It was about 40 years old. It was listed as a 2 bedrooms, 2-bath home with an “extra room and bath in the rear”. It was vacant, and in OK, but dated, condition on the inside. It had a flat roof. Older houses in this area, with flat roofs, tend to get very hot inside during warm weather. The real estate agent also told me that the neighbors informed him that roots, from the big tree in the front yard, periodically clogged the main waste line.
Over the years, someone added a bedroom and a half bath to the back of the house. But the problem was that you had to go outside of the main house to get access to it. And finally, the house next door was a big eyesore- A REAL DUMP. It had piles of junk and old cars on the front lawn, the siding was falling off, roof shingles were missing, and it was painted an ugly rust color.
This house was actually listed with a real estate agent and had been on the market for 24 months when I first saw it. This is what you call a STALE LISTING in the real estate business. Agents had pretty much stopped showing it to clients. They just did not want to waste their time. Why did I want these problems? Because I could see the profit in it for me. I could fix and rent the house, problem-free, to a nice family. There were not expensive structural problems and the overall fix up costs seemed to be minimal. I figured that for $3,000 to $4,000 I could solve most of the problems with the house and make it more desirable and profitable. It was a simple home that had some challenging flaws. I knew that the low price of $55,000 for the house reflected these flaws and the fact that it had been on the market for 2 years. $3,000 increased the value of this simple rental house by about $35,000
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