Buying your first home is probably the biggest investment you can make. Buying a fixer-upper is even bigger. Not only will you need to find financing like you would for any real estate purchase, but you will be looking for a home that needs some extra repairs. One that you can renovate the way you want it, one that can provide you with valuable home repair experience, and one that you can truly call your own.
But it’s not as easy as some of the home renovation shows on TV depict it. You don’t just find a three-room shack and magically transform it with granite countertops and stainless steel appliances. Your plans for renovation need to be reasonable. Essentially, you need to shop wisely, finance properly, establish partnerships with contractors and consultants, plan the individual renovation projects, and collect all the right tools to do them. Use this advice from Ideal Lending to ensure you take all the right steps.
1. Shop Wisely
You want to shop for a house that has “good bones,” which means it has architectural integrity. Unless you are prepared to rebuild a house from the foundation up, make sure the one you pick won’t blow over in the first storm. At the same time, make sure it is in a good
2. Finance Properly
Jeffrey Rothfeder of This Old House Magazine provides a simple equation for what you should pay: add up all the costs to completely renovate the property based on an honest assessment of the house; subtract that figure from the home’s likely market value after the renovation; and deduct up to 10 percent of that for unforeseen expenses. The result should be your offer.
3. Establish Partnerships
It’s a good idea to work closely with a home inspector and a contractor or consultant to determine exactly what needs to be fixed first. Also, connect with a good plumber and electrician. While you might be able to do most of the repairs yourself, you’ll most likely still need guidance on the major projects, such as foundation work or roofing.
4. Plan the Projects and Gather Your Tools
Assuming you have taken care of all major repairs first, your next step is to plan the repairs that will make your house livable: bathroom renovation, kitchen renovation, window repair, floor repair, and back deck or front porch repair. Consider which projects will require professional help and go ahead and get that scheduled. For example, if you’re replacing windows, you’ll need to find a highly-rated window repair contractor in your area. For the projects you’ll be handling yourself, you’ll probably need more than just a hammer and nails and a couple of screwdrivers. You should invest in circular and miter saws, a drill with several bits and a nut-driver, a nail gun (either electric or pneumatic), caulk and caulk guns, a portable workbench or a pair of sawhorses, and paint, paint brushes, and stains for all the finish work.
When it’s all finished, you have a big question to consider: should you stay in the home, or sell it and find another project? For people who have the time flipping houses can be a profitable hobby. But for others, putting work and thought into a house that they can truly call their own is all that matters.
Ready to buy your fixer-upper? Get guidance getting your mortgage from Ideal Lending by calling (844) 994-3325 today!
Buying a new home or refinancing your current loan? Our experienced team of loan originators is dedicated to making that a reality. At Ideal Lending, you will work one-on-one with a dedicated mortgage loan officer who can explain loan programs and offer great mortgage rates to meet your financial goals. Contact us today!
