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Money Pit? It could well be!!!

By
Real Estate Agent with HomeSmart Realty West & Florida Realty Investments CA01938972, FL BK3090225

 

I am sure you receive many calls from potential buyers in search of that 'Diamond in the Rough', YUP; a Fixer-Upper property.  Unfortunately, so many shopping for these types of properties do not have the abilities, skills, and experience in bringing a Fixer-Upper to a marketable condition where a modest profit can be realized.

Not to mention, many of these properties require all cash to purchase and as a result, the inexperienced, sub-funded buyers compete against savvy investors with loads of cash, and quick closing terms.

If you do have a lucky buyer able to purchase one of these properties; please protect yourself and insist on a written waiver of inspections if your buyer insists on self-inspecting the home, or using a 'Good Friend', rather than a licensed Home Inspector.

The pitfalls described below are often only the beginning of the sink hole that can become a life altering Money Pit!

 

 

 

Ironically, a fixer-upper is how I got into the real estate business many decades ago, but I already had the home construction experience that insured that I was not buying a Pig-in-the-Poke!

 

Posted by

Sandy Padula & Norm Padula, J.D., GRI
CA DRE#00902455 (Sandy)
Realtor®

HomeSmart Realty West

 

FL Bkr# 3090255 (Norm)
Broker-Associate

Florida Realty Investments

 

760.985.2055  Sandy
858.444.7060 & Norm

SDLuxHomes.com

PRESENCE ~ PERSISTENCE ~ PERSEVERANCE

 

 

 

Comments(8)

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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Norm,

Good post, and you really have to know what you are doing.  Research and talking to the right people really pays off.  A

Mar 03, 2020 12:55 PM
Sandy Padula & Norm Padula, JD, GRI

You bet and Thank you, Alexandra!

Mar 03, 2020 01:03 PM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Sandy and Norm fixer uppers are not for everyone.  A good deal can quickly turn into a bad deal with these properties.

Mar 03, 2020 02:11 PM
Sandy Padula & Norm Padula, JD, GRI

You are right, George Souto ; we have seen that situation many times. Thank you!

Mar 04, 2020 06:32 AM
Kathy Streib
Cypress, TX
Retired Home Stager/Redesign

Hi Sandy and Norm- Many people think that it's easy money as long as they're willing to put in some hard work. But even those experienced in home building can run into things they did not expect. 

Mar 03, 2020 06:15 PM
Sandy Padula & Norm Padula, JD, GRI

Right, Kathy Streib . When I used to rehad homes, I always expected the unexpected and budgeted for those issues. Thank you!

Mar 04, 2020 06:33 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Real Estate Broker

Great post, Sandy and Norm... I've found that most people totally underestimate the work and cost involved in a fixer-upper. It's by no means the panacea people think it is to buy a home on the cheap.

Mar 04, 2020 04:37 AM
Sandy Padula & Norm Padula, JD, GRI

Even investors get caught when they fail to consider the market cycles and consider that it is the market that ultimately determines at what price a property will sell. Thank you, Nina Hollander 

Mar 04, 2020 06:34 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Sandy and Norm. Sometimes it is best to leave it to the experts. Enjoy your day!

Mar 04, 2020 05:12 AM
Sandy Padula & Norm Padula, JD, GRI

Thanks, Wayne Martin I bet your area has seen many rehabs and fails.

Mar 04, 2020 06:35 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Norm(and Sandy too) - when people ask about fixer-uppers, foreclosures or short sales(fill-in-the-blank) that's a good opportunity to ask them what they might be "looking for".  The "good deal" conversation can lead to a discussion that is revealing/telling.  And that can be a good thing.  A very good thing.  

Mar 04, 2020 05:16 AM
Sandy Padula & Norm Padula, JD, GRI

We always try to determine the skill level our clients possess when talking 'Fixers' and despite our advice, many just push forward with rose-tinted glasses. Thanks, Michael Jacobs 

Mar 04, 2020 06:37 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Savvy investors expect the worst when purchasing a fixer-upper and that way they are prepared and hopefully pleasantly surprised in the end with their profits.

Mar 04, 2020 05:22 AM
Sandy Padula & Norm Padula, JD, GRI

Yup, Brian England you are correct and Thank you!

Mar 04, 2020 06:38 AM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC • Short Sale • Probate

Yes, and they keep texting now. They all want that magical deal that is ''not on the market'' yet. 

Sep 16, 2022 09:33 PM