Thanks to HGTV I get a lot of buyers who feel this is the way to go and it will be fun! For some it will be the way to go. My husband and I only bought ”fixer uppers” due to how picky we are. The “move-in ready homes were never to our liking, so paying the price of a move in ready home did not make sense for us. We did not want to move walls, so we looked for home with a floor plan that worked and knew we could change everything else. However, know we have an education that supports us in this decision - I with an interior design degree and my husband is an engineer.
Negotiating the purchase - so many times I hear - well it’s going to cost me 20,000 to make the updates I want, so let’s offer 20,000 less than asking price. In most cases that is not how it works. You need to ask your Realtor 2 questions, 1. is the home priced fairly for the amount of works that needs to be done 2. What would the home be worth if I did these upgrades. You will rarely get back everything you put in - The Realtor.org report of return on investment, or CostvsValue.com Report - have informative guides. ( I have both of these turned into a flip book if you would like to see them) My husband and I are okay with this as our enjoyment of our home is priceless.
Financial - if you are spending all of your hard earned money that you saved, on the purchase and have nothing left for that fixer upper, my guess is you will not do the upgrades. Now there's always exceptions to the rule of course, but in my experience if not done in the first few years it will not get done. Or it will get done right before you get ready to sell to move on to the next home. So make sure you buy beneath your means and have money in the bank to make the repairs and then some.
There are some great renovation loans that can be used - If you are not the handy person and can not find that move in ready home but can find a fixer upper, consider these loans. The FHA 203k and the Convention Renovation Loan. The conventional renovation loan is quite desirable and has a healthy limit amount you can borrow for renovations. Perfect for the unfinished lower level or new kitchen.
I have seen DIY’s done well and I have seen them not done so well. Know your ability and know you could even lessen the value of your home on a not so go DIY.
I am all about the fixer upper, and I love to watch and assist in these projects. They are not for everyone.
Two of our projects were featured in a local Magazine - Cosmopolitan Home Grand Rapids
Here is a picture of the before of each kitchen and follow the link to see the finished project in print.
Picture 1 - City home in Historic District - Renovation Pictures
Picture 2 - Home in Cascade Township - Renovation Pictures