There are two ways to purchase a home that is a fixer upper. Take everything by chance or be very particular about each detail. To make the best home buying decision possible, these are the most important things to look closely each fixer upper you may consider.
Read more to find out how to purchase fixer upper homes the intelligent way below.
Choose the worst house in a good neighborhood.
If you fix up a home in an area full of fixer upper homes, you are not going to get a great return on your flip because home prices are set in part based comps. You should instead find a nice neighborhood with one eyesore and remodel that. Your real estate agent could be a huge help in determining the value of the location of the home.
Use specialized inspections.
Fixer upper homes usually come with specialty issues, so they will need specialty inspectors. Individuals who do general home inspections will not look for some of the major systems that could cause problems in a house that needs a lot of assistance.
Click here to learn 4 important repairs to do after moving out!
Evaluate all necessary repairs.
Paint that is peeling and ugly carpet are easy to fix. But moving load bearing walls and taking out hazardous materials like asbestos? These jobs certainly add up. If you are purchasing a fixer upper, make sure to do an inventory of the work you would do in the first few years. Then find out how many you will need to hire a pro to do and which are do it yourself home projects. If many projects fall into the big job category, it may be more trouble than it is worth.
Factor these major repairs into your home offer.
If you have found a home with manageable repairs that you would like to purchase, then it is time to do a little calculating. Utilize your list of necessary repairs to price out every project and find your total remodeling costs.
Take these remodeling costs into consideration when making your home offer in four ways:
1. Make sure your home offer plus the needed renovations will not be more than the amount you can expect the upgraded home to appreciate or increase in value. Your real estate agent could assist you with that figure.
2. Secondly, you should make sure your monthly mortgage cost will be low enough that you can afford to pay for ongoing remodeling projects.
3. Choose how much work needs to be done to the home prior to living there. If there is more to do than you can pay for up front, you should research types of mortgages that let you finance repairs needed along with the home’s asking price. Also, make sure to not forget to add up your alternate housing fees while the work is going on.
4. Make a schedule that will assist you in visualizing your budget for the first couple years. If the calculations check out well, then you are in a good position to make an offer.
Do you have a question about fixer-uppers? Call 949-392-6400 to get in touch with the Reed Team today!