More and more people are finding it difficult to find the right house at the right price these days. In many parts of the country, scarcity of inventory is the cause. Lack of inventory is driving the cost of move-in ready houses higher and higher. With interest rates expected to continue climbing during all of 2015, you may want to try the fixer and flipper investment strategy regardless if you are an investor or a homeowner.
If you don't live in one of the pockets of the country that still has abundant affordable housing, you might want to consider something less than your dream home - or for investors, less than the dream home of end buyers. By now, most people in the real estate market are familiar with fixer houses. Even the first time buyer should be looking at this possibility. Not only will the purchase prices be much lower but also a fixer affords you the ability to remodel it into your personal dream home.
This strategy works anywhere if you spend enough time searching for deeply discounted houses needing to be fixed up. However, there are parts of the country with more old houses in neglect than other parts of the country. Most of these are in the East and upper Midwest. A few of these include:
The results were determined by a research team analyzing hundreds of thousands MLS listings. The criteria used was limiting searches to houses between 2,000 and 4,000 square feet and listings including phrases such as “fixer,” “as is condition,” “with potential,” “handyman,” or “TLC.”
Then the areas with the largest number of these houses were mapped. The discount percentage was determined by comparing average fixer prices to average move-in ready house prices.
This might not be a good strategy for every first time buyer but if you own a hammer and a saw, you might want to at least consider the deep discounts that are still available. Fix and flip investors might want to take a closer look at these particular locations.
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Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.