Questions Investors Should Ask When Buying and Selling Investment Property

If you're a real estate investor, here are several questions to consider when looking at investment properties. Providing sound answers to these questions will greatly increase your profits:

There are many factors that can prevent owners from being able to maintain their homes. Such factors as job transfer or loss, divorce, illness, addiction to gambling, drugs, or alcohol, or any of a wide variety of other problems may overwhelm a homeowner. When that happens, their home becomes a low priority and necessary repairs are no longer made. The house may even go into foreclosure.

The death of a homeowner may leave relatives with a house no one wants, which then becomes a burden. These homes may just be "tired" and only in need of cosmetic upgrades in order to compete with other homes on the market.

I recently purchased a "Triple D" house: one that had been involved in a Divorce, was going through Default, and was a Doghouse. But it needed only cosmetic work, so my daughter and I bought it and we're doing it all ourselves, without the help of the men in our lives, and we expect to make nearly $50,000 for one month's work. That's not as much as our husbands generally make on their "doghouses," but we're not going to work nearly as hard.

The hardest house for a homeowner to sell is a "doghouse," which is also commonly known as a "dump" or "fixer-upper." These run-down houses scare off most buyers, who lack the up-front funds for the down payment, closing costs, new furniture, and things like new carpeting, roof repair, and other repairs that may be required. With that in mind, looking for key words such as "handyman special," "as is," "fixer," and other tell-tale words in real estate ads or listings can make you money.

Tell your realtor to use those types of key words when doing a Multiple Listing Service search in your target area. Once you find a fixer that you can transform from a doghouse to a dollhouse, find out the seller's problem and then offer a solution. Those problems are often money-related, so being ready to close quickly is generally important and can lead to a bargain price from a seller in a financial bind.

You can close more quickly by having your loan in place before you even begin negotiations with the seller. Motivated sellers will respond favorably if you've been pre-approved for your loan, so getting yourself both "pre-qualified" and "pre-approved" by an experienced lender will let sellers know that you can close quickly.

When you first start out in the real estate "fixer" business, look for UGLY houses that are in need of only cosmetic work. Entry level "blow 'n go" fixers are houses that just need cleaning up, paint, and carpeting.

Know your limitations, and use caution when looking at houses that are in need of structural repairs. Such homes can be very profitable (we've made $75,000 for one month's hard work, for instance), but they're not good candidates for most beginning investors. Since my husband knows how to do construction, we're able to take on houses that other investors might not. He's replaced structural beams, sub-flooring, walls, plumbing, and electrical systems, but he learned those skills over the course of many years.

Over time, you may learn how to do much of the structural work yourself, but when you're first starting out, make sure to get estimates from reliable contractors for any structural repairs that might be necessary, and then decide if there will be enough profit left over to make the project worthwhile.

Selling a "dollhouse" in a desirable family neighborhood is easiest. For instance, we once sold a house we called "Orange Tree Cottage" just three hours after it hit MLS! Buyers first look for a particular neighborhood, and then look for a house within that area with the right number of bedrooms, bathrooms, and other amenities. They'll ultimately buy the house that not only meets their basic requirements, but also supports their emotional needs.

We find that the use of Design Psychology and Marketing Psychology makes a huge difference when we sell our investment properties, selling them more quickly and at higher prices. But both concepts go far beyond simple "curb appeal."

We first entice buyers onto the porch, through the use of potted plants and flowers near the front door, which we've painted a happy color. Once buyers are inside the house, we use colors that target our prospective buyer's income level and match the selling season. Generally, buyers of higher-priced homes prefer complex colors, and using cool colors during hot weather and warm colors in cold seasons sets the stage for making buyers feel comfortable in our houses.

As a real estate investor, asking yourself these questions, choosing your properties carefully, being prepared to act quickly, and using Design Psychology and Marketing Psychology can all work together to greatly improve your bottom line.

Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm

After 30 years of marriage, Sharon and Michael Newman decided it was finally time to move from the Catskills to New York City.

The house, designed by the architect Eric Fisher, looms over the street like a big industrial arm.

A town house in Dallas, a midcentury modern in Rhode Island and a Tudor in Denver.

Meet the real estate broker’s interns: an ambitious group willing to do anything, earn nothing and wake up early on a Sunday to fluff the couch cushions at open houses.

For a century, Roosevelt Island housed a grim penitentiary. It was demolished in the 1930s.

More borrowers are opting for fixed-rate loans with terms other than the standard 30 or 15 years, especially when it comes to refinancings.

Two more glass skyscrapers are added to a group of towers on the waterfront of Long Island City.

Insurance coverage for a co-op unit; when a tenant is ‘blacklisted’; a co-op is smaller than estimated.

The market for $500,000-to-$600,000 houses in Westchester has become especially active.

A shaky real estate market means more sellers are providing buyer concessions, from gift cards to help with paying property taxes.

Houses of worship are adaptable to residential and other uses as congregations dwindle.

Nearly two million Americans could benefit from mortgage relief from the nation’s biggest banks, as part of a broad government settlement to be announced on Thursday.

A cold war-era satellite relay station is for sale in California after a Silicon Valley mogul gave up on plans to turn it into a weekend home.

How can I make my front porch more appealing to buyers?

Court hearings meant to protect New York homeowners from foreclosure are hopelessly slowed by endless paperwork and requests for additional information.

The Bay Area and Silicon Valley expect the windfall from the Facebook stock offering to make their in-demand region even hotter.

A Ditmas Park co-op, Upper East Side co-op and an Upper West Side condo.

A 10-year-old house with six bedrooms in Montvale, N.J., and a renovated four-bedroom in Bronxville, N.Y.

Prices in some parts of the country are still off by as much as 25 percent from their 2007 peak.

Trinity Church is the largest landlord in Hudson Square and is part of the effort to rezone the area to residential from manufacturing.

Rising oil prices and a boom in shale exploration are leading companies to add office space in the Houston area, most notably Exxon Mobil.

Ms. de França is the president and chief executive of Douglas Elliman Development Marketing, which focuses on new residential developments.

In Manhattan, parking lots and garages are making way for all sorts of development, especially luxury condominiums.

Gray Burton lives in a 250-square-foot space he furnished with antiques he’s been collecting for years.

A photogenic Westchester suburb with high-profile residents is also known for its art museum and a performing arts center.

Wealthy investors are wiring millions of dollars to New York to snatch up a piece of 157 West 57th Street - what will be New York City's tallest residential building, with 90 floors overlooking Central Park.

An apartment at the Trump International Hotel and Tower, opposite Central Park, was bought anonymously through a limited liability company.

Homes in Dallas, Rhode Island and Denver.

A Ditmas Park co-op, Upper East Side co-op and an Upper West Side condo.

A 10-year-old house with six bedrooms in Montvale, N.J., and a renovated four-bedroom in Bronxville, N.Y.

Compare the cost of renting and buying equivalent homes.

For recently divorced men, a new breed of decorators offers help navigating a strange new world.

Plants that light up the winter garden can be found at Broken Arrow Nursery in Connecticut, which has long been a favorite of gardening geeks.

A sister in need drew the painter Beverly McIver back home to North Carolina, unaware that a new beginning was in store for both of them.

A jewelry designer finds striking new objects for storage.

Timothy Sakamoto and Jochen Repolust are part of the small but growing niche making mobile apps focused on specific works of architecture.

To promote an auction of 20th- and 21st-century design, the interior designer Stephen Sills has created a preview exhibition in an apartment at the Apthorp.

Fishs Eddy now sells plates acquired from the archives of the now-defunct Syracuse China Corporation, many more than 100 years old.

The designer Russell Greenberg creates custom baby rattles with ends shaped like profiles of mom and dad.