South Orange County Blog from Bob Phillips

Dos And Donts Of Buying Fixer-Upper Real Estate

fixer-upper-3A fixer-upper is real estate in need of serious repairs. These properties are often called “handyman specials.” If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don’ts of buying fixer-upper real estate.

DO Get A Home Inspection

Fixer-upper homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water  damage in the attic, can be easily hidden. The only way to know for sure what you’re buying is to have the property inspected by a professional home inspector.

DO Pay Attention To The Home’s Market Value

You don’t want to buy a house and spend your hard-earned money for repairs only to find out the home is worth less than what you paid for it. Have your agent complete a comparative market analysis so you know what the fixed up home will probably be worth.

DO Have An Estimate For Repairs

There’s no point buying a fixer if you can’t afford both the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

DON’T Think About Potential Profit

You’ve probably heard countless stories about people who bought fixers and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

DON’T Buy A Home Just Because The Price Is Low

When you buy a fixer-upper, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

DON’T Buy If You Don’t Have The Money

No matter how good a deal you find on a fixer, they aren’t worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can’t pay for the home.

Not ALL fixed up houses are going to be flipped or resold

Many fixed up houses become the eventual home of the owner, and were purchased with that in mind, while a large number of them become rental properties, for the owner, so, as you can see there are plenty of options, or reasons for buying a fixer.

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