Should You Buy The “Ugliest House On The Block”?

There are some nervous times going on in the financial markets right now. What we’re finding right now is a phenomena called “Flight to Quality” – where people are putting their money in the safest investments they can find. You’re not seeing wild speculation going on. Investors are just happy if they don’t lose money and they aren’t expecting big gains on anything they buy.

The housing market is the same way. For many years, it didn’t really matter what house you bought. Real estate values were going up so fast – you just needed to buy “something”, and if you didn’t like it – so what? Keep it for a little while, flip it for a profit, and buy what you really want later. Real estate was a no-lose investment. Buy it and it’ll be worth more tomorrow…

Real Estate “WAS” a No-Lose Investment

But times have changed, and there’s a “Flight to Quality” going on in real estate now too. Buyers are being much more selective about what they buy – which is the way it should have been all along. And the best “Flight to Quality” buying technique is the old “Buy the ugliest house on the block” strategy.

If you’ve got fix-it-up skills, you can still use real estate to make yourself wealthy. You get the ugly house in a good neighborhood, fix it up to the same quality level as the rest of the homes around you, and you’ve just created extra Quality – extra Value. This was an extremely common home buying and wealth-building strategy for many years in America, but is rarely used these days. So again, if you’ve got the skills, you have a HUGE advantage in real estate right now.

No Fix-Up Skills? No Problem…

Even if you don’t have the skills to do-it-yourself, there are terrific opportunities to pick up fixer-upper distressed properties at bargain prices and using rehab financing and construction loans to pay for contractors to do the work for you. Ask your lender about the FHA 203K Streamline Rehab Purchase loan (Whew! Big name). You can use an FHA loan to buy the home and finance an additional $35,000 in home repairs above the purchase price. Find a home that needs a little love, hire a contractor to make it good as new before you even move in, and you can end up having 10-20% equity in the home right off the bat. Very cool! And a GREAT way to buy a quality home at a bargain price – a great way to build wealth! (Not to mention helping to renew a neighborhood.)

Buy Low, Sell High – Some Things Never Change

So why don’t more people buy their home this way? Stay tuned for the next article titled “Whatever Happened to Buying the Ugliest House on the Block?” (after Christmas.) Just remember, real estate has helped build more fortunes in the country than anything else, and even during a downturn in the overall market – you can still find great bargains and build your wealth, if you buy low and sell high. Just make sure what you are buying low has good potential to be worth more later on.

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