investing requires expertise in recognizing these problems and
the costs for repair.
you stumble onto a jewel investment by discovering a house where
mom was an excellent housekeeper, and all that’s necessary
is minor cleanup of the premises to prepare for selling. But the
truth is that most people don’t even sweep the floor when
they move after the house is sold. And sometimes the house they
leave behind is a wreck.
If a yard
looks trashy and overgrown, you know how to pick up the garbage
If the walls
look drab and shabby from years of neglect, you know how to replace
new wall paneling or repair holes with wallboard mud. If these
basics are not understood, you can always get a quick lesson at
your neighborhood Home Depot or Loew's.
experience is necessary for slinging a paintbrush, unless you
are just sloppy. Paint is the easiest of options in giving fresh
renewal to property.
is simple and easy. You can either do it yourself or hire a handyman.
really only need some yard work and a few gallons of paint are
readily found in the real estate buyer's market. But these houses
tend to be far from deeply-discounted or bargain-priced investments.
problems constitute severe potential pitfalls in real estate investing.
The most critical problems are foundation irregularities and mold.
a house recently that had serious foundation problems. My attention
was first called to the entrance steps with broken brick due to
shifting of the house on its foundation. As I walked around the
inside of the house, I saw that the sheet rock had cracked in
several places on the level above the entrance steps. What was
obvious to me was obvious to every other buyer who had seen the
house, which explains why the property had been on the market
for over 200 days. So as this red flag went up about the foundation
problem, my curiosity was also raised about the cost of repair.
I know nothing about foundation problems, and I would never tackle
such a problem on my own. But I knew there were specialists in
the area with expertise in foundation repair. So, I got a couple
of estimates before deciding if the purchase price was fair.
One of the
most serious problems in buying any house today is mold contamination,
especially in the southeast. This is a recent problem that we
never experienced in the past with such prevalence. Let me warn
you: repairing a mold-infested house can cost you big bucks. Even
in excess of $100,000!
house must first be tested by a certified lab to ascertain the
extent of damage. A third-party contractor usually takes responsibility
for repair after the initial test. Then the testing lab must re-evaluate
the premises after repair to confirm whether toxicity levels have
been reduced to acceptable standards. Then, and only then, can
you re-enter the property to make modifications or paint. You
are in a heap ‘o trouble, boy, if you buy a house WITH MOLD,
unknowingly or knowingly, and if you fail to remedy the problem
or try to sell without disclosure. Just write it off as a bad
experience and bad investment if you buy without taking remedial
costs into consideration. Mold is a serious problem in today's
doesn’t mean you should not buy any house with mold infestation.
You can obtain firm bids (not estimates) for repair on some situations.
However, damage can be so severe and widespread that even mold-removal
firms will not even quote a firm bid! Factor the remedial repair
into the buying price and the selling price. Be prepared, however,
that it just won’t work in some cases.
Mold is damaging
to health. Some people are more sensitive to mold than others.
Mold replaced the asbestos scare of the '70s and '80s when Texas
homeowners sued insurance companies for millions of dollars over
mold damage. The mold problem has migrated from the South and
is moving into northern states. Many Alabama insurance companies
went out of business because of the mold problem, and those insurers
left usually refuse to insure any house with mold history.
let mold catch you with your pants down!
have some kind of problem or problems. Learn to distinguish between
the cosmetic and serious problems, and recognize that solutions
are usually available for either. You, the real estate investor,
must become a problem-solver of house problems.
Speer, Ph.D., started his real estate investing career 25 years
ago. Without the availability of credit and using only a $10
bill, he purchased $1 million in properties in his first year,
and had accumulated $10 million in properties by his fourth
He was featured in a Wall St.Journal editorial as most successful
investor in the Nothing Down Real Estate Movement, and was honored
with a Caribbean cruise as top investor of the year. In his
hometown of Nashville, Tennessee, he has been a businessman
and Human Resources Consultant for 30 years. He is an author,
speaker and seminar director.
learn how to profit in real estate investing, even without cash
or credit, read his report at http://www.Real-Estate-eBook.com/investing/flipping.html/
Subscription is free to his Fix-up Ezine. He and other contributing
authors provide free articles and resources on real estate investing
at his online "Academy of Advanced Real Estate Investing
Techniques" at http://www.AAREIT.com