It may not be a well-kept secret, but many fulltime real estate investors make their best profits by buying and fixing junker homes. My husband and I have been buying and reselling homes for many years, and although we now are shopping for properties in the quarter million dollar range, we started out like most successful investors--by buying junkers.
In some ways, buying junker homes in economically depressed neighborhoods is counterintuitive, especially in light of what you'll read in almost every real estate investment book or hear in any investment seminar. Those people tell you to avoid those run-down neighborhoods, and to concentrate on the pretty ones, where the homes will appreciate more.
There is some truth to that, and once you've been at it awhile, like my husband and I, you'll also be able to buy and sell in the more desirable neighborhoods. But if you're just starting out, you may need to do some serious homework and find a junker home in a reasonably attractive neighborhood and start there. Just about every successful investor started just that way, so you'll be in good company.
Don't get me wrong. I am NOT suggesting that you buy homes in ghettos or slums. Sure, they'll be available for a song, but when you've fixed them up, no one will want to live there, if they can possibly afford to live somewhere else. You also don't want to have the BEST home in a terrible neighborhood. Quite the opposite, in fact. You'll be looking for the worst house in the best neighborhood you can afford. That's where the money is to be made.
Remember, you're not buying properties just to impress your friends. You're buying properties that will ultimately make you MONEY, pure and simple. You'll probably also have to get your hands dirty, because these types of house will often be downright filthy and ugly. Cleaning up is the one thing almost ANYONE can do without having to pay a subcontractor to do it for you.
So if you're looking to build a real estate fortune of your own, one great place to start is with junkers. Thousands of people have done it successfully over the past decades, and so can you!
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