Fixer-uppers

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Real Estate Agent with The Premier Property Group | GRI, CLHMS | SoWal 30A Your Beach Awaits | 3248489

The  phrase "Buyer Beware" is appropriate when considering the purchase of a fixer-upper.You need to know exactly what you're getting into before buying.

 It's commonly believed that fixer-upper properties represent easy money that is ripe for the taking - that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. 

With proper planning and foresight, good profits can be made by buying "distressed" properties at less than market value, making appropriate improvements and repairs, and then reselling.  And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be a good option. 

It's less risky buying a fixer-upper when you can live in the house while fixing it.  If this is your option look into 203k loans or Baby K' s that offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity, without the extra cost or details as found in the regular 203k. 

One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home. .

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Ambassador
553,625
Larry Story
Total Care Realty - Greensboro, NC
Total Care Realty, LLC, Greensboro, NC Real Estate

Great tips just beware of some "flippers"  when buying a home that has been "fixed up".  I have actually had some of these entrepreneurs ask me; "what kind of paint can you use on a roof?"  They actually wanted to paint asphalt shingles instead of replacing them in order to "freshen it up a bit".

Oct 20, 2008 02:25 AM #1
Rainmaker
681,395
Diane Daley
Caron's Gateway Real Estate - Northumberland, NH

In this market more and more investors are looking at fix-up properties to make a profit when the market changes and are renting them out in the interum...  good post Diane

Oct 20, 2008 02:39 AM #2
Rainmaker
455,616
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Fixer-uppers can be a great opportunity. They are what brought me into the building business 40 years ago. My first 3 personal homes were fixer-uppers. I did most of the work myself and made a nice profit on each one. However, the recent interest and TV shows about flipping make it look all too easy. It's not.

Two years ago I bought 2 such homes on a lake for $475m and after some major work sold them for over 1 million. Sounds good, but it took a lot of work and in the end I only reaped an average profit. There are bargains out there, but it takes some knowledge of home repair to identify the right ones.

 

Oct 20, 2008 03:01 AM #3
Rainmaker
312,366
Rob & Jeannie Steward - Realtors®
RE/MAX Advantage - Nashville, TN
We Work TWICE As Hard For You! - Ashton Group

'Buyer Beware' also applies to the first time home buyers seeking affordable housing. For many of these folks money is tight, and if an 'as is' property 'looks okay' it pays to remember that looks can be deceiving.

One recent couple almost skipped opting for a home inspection in hopes of saving the $300 cost. The early 1980's built townhome received a good cleaning, fresh paint and carpet. It also had a roof replaced two years prior. We explained that the home inspection would likely pay for itself with discovery of repairs needed which may not be readily apparent to the naked eye. Luckily they agreed given some example scenarios.

Now, their experience have been added to our list of example scenarios. Inspection of the attic revealed that the roof was constructed with the first generation of FRT plywood (Fire Retardant Treated). This first generation treatment was recalled when it was found to cause rapid deterioration of the wood strength integrity. Some of this had been replaced but not all. Several sheets were near the consistency of wet cardboard. The untrained eye couldn't readily see this. But the inspector caught it instantly.

So you do the math. Tearing of the entire shingles down to the plywood, replacing said wood and reshingling.

Worth $300?

Oct 20, 2008 03:06 AM #4
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Rainmaker
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Gena Bolton

Sandestin, Destin and South Walton 30A Real Estate
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