Buying A Home – How Much Fixing Up Are You Willing To Do?

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The ideal property would require very minor fixing up such as removing outdated wallpaper or linoleum. However since there are many other buyers and investors looking for simple fixer-uppers, you’ll have a hard time locating one. But don’t give up hope, there are certain fixer-uppers other buyers will overlook, especially if they’re visibly unappealing from the street.

In contrast to the minor fixer-upper, you’ll find homes in need of major repairs including structural changes, adding rooms, demolishing walls, and much more. Unless you have a relative who’s a contractor, you’re smarter to skip these money draining properties, especially if they contain major health violations (like mold) or are unlivable due to extreme damage. Let’s explore the 3 reasons you should pass up these type of properties:

1) Bank Financing Will Be Slim – When a home needs major repairs, a lender may require you to correct some of the important problems before they approve your loan. If you don’t have money set aside to complete the improvements, the bank won’t approve your loan.

2) Repair Costs Can Exceed What You’re Willing To Spend – If the reason you purchased a fixer was due to financial limitations, how will you come up with the money for additional repairs? Don’t be fooled into thinking a basic cosmetic fixer won’t need some minor reconstruction work. If you still decide to buy a home needing significant remodeling work, be sure you set aside additional funds for future projects.

3) Major Remodeling Can Disrupt Your Life – If this is your first home, you may not want to deal with contractors, take time off work to oversee their activity, and deal with unexpected delays or extra costs. Your family relationships can also suffer from the resulting chaos while living in the house during construction.

The best type of fixer-upper strikes a happy medium between the first two extremes: a property needing simple cosmetic repairs you can accomplish by yourself or with the help of an experienced handyman or contractor. Choose a home only needing minor cosmetic work such as a new paint job, replacing flooring, or upgrading fixtures. Don’t buy a property needing major repairs like a complete rewiring job, replacing a roof, or foundation work. If you’ve been fortunate to come across a property fitting these criteria, be sure to:

1) Check with the city building department to see if your plans are feasible. Most cities have minimum code requirements for upgrading wiring and plumbing, height limits, setback rules, and other restrictions.

2) Consults with a professional such as an architect, contractor, or engineer before you start the process of adding a second floor or extra bedroom. This will reduce the chances of investing time and money into a project that may not be feasible.

3) If you’re going into a fixer-upper purchase with another partner, make sure everyone involved discusses how they’re going to cope with the added stress and extra responsibilities of supervising construction activities.

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.