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Red hot real estate: Is a fixer for you?

09:27 AM PST on Tuesday, November 15, 2005

By ALLEN SCHAUFFLER / KIING 5 News

If you're handy with tools and don't mind working hard in your spare time, you might consider investing in a "fixer-upper" and making a little extra cash in a booming local housing market.

In part two of our "Red Hot Real Estate" series, we’re looking at the opportunities, challenges and pitfalls of this type of real estate investing.

There is certainly an opportunity to make money this way, especially when property values go up as we've seen them go up in the last year, 20 percent and more in some areas of western washington.

But be careful. The experts say it may be a harder, riskier, more complicated business than you think.

KING

This Everett fixer caught Brent Lindblom's eye. With something a little more than cosmetic work done on it, he's hoping to turn it around for a profit.

Brent Lindblom paid $262,000 for a split level home that had been vacant for two years near Everett and hopes to eventually resell in the $325,000 range.

"This is going to be a good property its going to be a good house for somebody," he says.

But only after plenty of work. The walls and ceilings have been re-textured and painted. That's just the beginning.

It also needs new fixtures, toilets, vanities and sinks, says Lindblom. Lindblom also opened up part of the livingroom to the outside with a French door.

There are new cabinets for the kitchen, new shutters to accent the new exterior paint job and a new front deck

This is Lindblom’s third such project this year. He does it for a living and last year was even busier.

But real estate brokers and agents say they've seen more amateurs getting into the home refurbishing business.

Ziprealty's Michael Tenore has a warning.

"There are no guarantees here. I don’t have a crystal ball, I can’t say what the market will do next month or a few months from now. If you buy a home like that planning to sell it in a few months, you're taking a risk,” he said.

Tenore says to look for residential areas that seem to be improving generally. Buy at the low end in a neighborhood and bring the home up to the quality and value of those around it. Find a house that needs "redoing", not rebuilding.

"Something that's cosmetically challenged, just a little bit, something that's not going to take a lot of money to improve," he said.

And always hire a professional home inspector before you buy to cut down on nasty and expensive surprises later.

The plumbing, the electrical, the roof, the foundation, the drainage, Make sure there's no mold

Both men say it can be fun and profitable, and both say, be careful.

This is not for everybody. It’s a lot of hard work

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