If you’re a homebuyer contemplating the purchase of a fixer-upper, there are some facts you need to know before buying one. While the concept of making a profit by fixing and turning over homes seems attractive, the outcome can be financially devastating if you select the wrong type of fixer-upper.
The best home to fix up would only require minor repairs such as replacing antiquated wallpaper or flooring. However since a multitude of homebuyers and real estate investors are scrambling for this type of property, it’s almost impossible to come across this opportunity. But there’s hope, you can find certain visually unappealing fixer-uppers other buyers will pass up.
The extreme opposite of the simple fixer is the home requiring significant renovation such as foundation work, moving or adding walls, adding more bedrooms and much more. Unless you have a rich uncle or a contractor in the family, you should walk away from these type of properties, especially if there are significant health violations (like mold) or can’t be lived in because of extensive damage to the roof or floors. Let’s study the 3 main concerns when buying this type of fixer-upper:
1) Getting A Mortgage May Be Tough – If the property has significant defects, a bank may require you to complete a certain number of repairs before it approves your loan. If you don’t have the funds to complete the repairs, the bank won’t approve the loan.
2) Beware Of The Money Pit – While the reason you may be considering a fixer-upper is due to financial constraints, ask yourself if you can afford to spend the additional money to repair the place. Even a simple cosmetic fixer requires some money to repair. Be sure to set aside additional funds to cover these renovations.
3) Be Prepared For Extra Stress And Commotion – Going through a major remodel can disrupt your daily life. Not only will you experience extra stress, you’ll have to take time off work to periodically monitor construction projects. Make sure your family has discussed how to cope with these additional inconveniences.
Your best option would be so search for a fixer-upper somewhere in between the two extremes: a home needing moderate repairs you can handle on your own or with some professional assistance. Choose a home that only needs new paint, carpeting, or tile work rather than a new roof or major electrical upgrades. If you do find a property that fits your criteria, make sure to:
1) Stop by your city’s building department and discuss your plans with them to see of there would be any problems. Each city has it’s own set of codes regulating any remodeling upgrades such as electrical and copper piping, height restrictions, setback rules, and other limitations.
2) If you plan to add a second story or a room, be sure to consult with an architect, contractor, and engineer about the feasibility of the project and estimated costs.
3) If you’re buying a fixer-upper with another party, be sure to discuss how everyone will deal with the resulting stress and extra responsibilities coping with contractors and workers.
Want to find out more about buying an Orange County starter home? Then contact these local Irvine Realtors or Santa Ana Realtors to help you find one.