Pretty Houses vs Ugly Houses

Pretty Houses vs Ugly Houses

Determining if a property is pretty or ugly can be a relative thing. After all, it can be a matter of opinion whether or not a property is pretty or ugly. In some states, people go by the general consensus that in their prospective area, there are no pretty houses until it is proven otherwise.

So in this business, there are different ways of measuring whether or not a house is a pretty house or an ugly house. And when it comes down to it, the amount of money needed to get the house in order determines what category it falls into. This is because we deal with the ARV (After Repairs Value) of a home. And if repairs exceed a certain amount, then the house is considered an ugly house.

Generally speaking, someone might consider a pretty house to be one that needs less than five thousand dollars in repairs done on it. But again, this is all relative. Because many times you’ll take over the deed of houses needing ten or fifteen thousand dollars in repairs. This, however, doesn’t really mean that it’s an ugly house. If the loan on the property is more than what you pay for in cash, then you might consider it a pretty house deal even if it needs work.

So, suppose you have a house that has a lot of equity built up. The home is in foreclosure and the owner is several months behind in payments. The home might need some cosmetic repair work done to it, maybe some painting and minor floor work done. In a situation like this, you may want to consider not putting any money into the home. Instead you can aggressively get out there pursuing a work for equity tenant buyer and hopefully come up with one that can come up with at least enough to bring the payments current.

But the first thing you need to do is get the deed on the property. You will also want to check the title on it. Don’t simply take the person’s word for it when he says that there are no liens on the property. Find out for sure. Simultaneously you will want to find a work for equity tenant, get them in there and have them do their own work. Then be sure to get them out when and if the work gets done.

The idea is to attract people who want to do some work and who want to get some equity for it. You very well may find some people able to qualify for a loan on it, so you play both ends. Either way, it’s not fun making payments on ugly house looking for a qualified buyer. If you do it this way you may find a buyer along the way while you’re looking for a work for equity tenant buyer.

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