Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We bought a foreclosure on 5 acres in a desirable area and spent 3 years fixing it up. In the 3 years the area became even more desirable. When done, the home sold for almost 4 times we paid for it. However, we worked full-time during renovations which we did ourselves. It is not for the faint of heart - when your work day is done (or weekend comes), instead of relaxing and having fun, you have to work on the house. It gets old quickly, especially when the job is big and there seems to be no end in sight. For example, we replaced all the siding on the home with metal siding and it was a job that took a few weeks. It is a big home and the task seemed daunting at times!
Also, be careful working inside the house. People do not realize it but, for example, the mud used for walls has silicone in it. If you breathe too much of it without wearing a mask, you can get silicosis. Granted, you would have to breathe a lot of it but the dust is VERY fine and gets into your A/C ducts etc. and it is nigh impossible to get out afterwards. So, there is some steps, precautions, education that you need to take into account if you will be doing the work yourself. Same if there is a chance of mold infestation anywhere in your house or old carpets - you don't want to be breathing that crap - take precautions and follow recommendations/safety procedures.
However, looking at the prospect of so much dough in the bank can be a powerful motivator . Only you know if you are up for it. Just be careful, these things can easily test marriage. Thankfully my wife and I both wanted to do this and we have a strong marriage
Finally, if you are looking to make a profit from the remodel/TLC - do the work yourself. If you are going to hire contractors, all the realized profit will go to them. Quality of work obviously varies between contractors and so does pricing - any combination of expensive/crappy to great-work/cheap is possible, there are no rules.
Landscaping doesn't increase the value of a property as much as people think. And I used to work in the field.
Love It or List It is the "realest" DIY show and they use contractors. You see what ALWAYS happens when you open a house up.
Of course anyone can learn anything. I can always tell when a project has been done by a newbie, talented DIY, cheap big box and true professional. It depends on your market if ithe work quality will impact the longterm resale.
You're already commuting a huge distance. Do you have the mental fortitude to give up your outside lives for a year? Instead of a weekend trip, it's we've got to do this on the house.
I understand the price incentives being from Mass and our insane rental costs here. Your family needs to see if the benefits will outweigh the costs. For some, it does.
When you find a potential house to buy, you will get a home inspection before continuing with the purchase. If there are major things to fix that you cannot afford to hire out, don't buy the house. If most things are cosmetic, such that you can live with them while you make improvements, you should be okay if you are willing to learn new skills. Otherwise, I suggest you buy one of those under 1000 sq ft homes and make it a show place with great curb appeal, then sell that house after a few years and move up to something a bit larger. Repeat as necessary.
When you find a potential house to buy, you will get a home inspection before continuing with the purchase. If there are major things to fix that you cannot afford to hire out, don't buy the house. If most things are cosmetic, such that you can live with them while you make improvements, you should be okay if you are willing to learn new skills.
Good advice, home inspections are NOT infalliable, though. They're another tool that can work or not work. Inspectors don't open walls up, they don't research if building permits were pulled on that new deck, etc. Sellers grow pretty determined to hide issues when offloading a property. A fresh coat of paint is used to cover many ills from missing plaster, water damage, rotting sills, etc.
Fixer uppers come down to risk and stress: is OP OK with it or not?
When you find a potential house to buy, you will get a home inspection before continuing with the purchase. If there are major things to fix that you cannot afford to hire out, don't buy the house. If most things are cosmetic, such that you can live with them while you make improvements, you should be okay if you are willing to learn new skills. Otherwise, I suggest you buy one of those under 1000 sq ft homes and make it a show place with great curb appeal, then sell that house after a few years and move up to something a bit larger. Repeat as necessary.
Agreed. If all you need to do is strip wallpaper, paint, take up carpet and put down laminante, etc that's doable. Fixing the home's systems are pro jobs.
BTW, the FHA has a mortgage/loan program that includes the mortgage as well as rehab costs that enables people to buy fixer uppers. I think it's called the "235" loan program. You might consider that program.
Can you find a home that's smaller for the price of the fixer-uppers?
If so, then I'm thinking that maybe you could be happier in a smaller place, than in one that required a lot of fixing up.
There was one home in our target area that was beautiful and 100% turnkey listed at $150k, but three issues. It was 1100 sqft which we worry we will grow out of VERY quick (we are in a 1200 sqft rental home now and it feels a wee cramped, plus kids are on the way for the future!). It also was at $150k which is above market value by a lot and the sellers aren't budging on the price. And third, it has no decent space in case of tornados which is a big concern here in the midwest. We are still tempted by it because it's so turn key and we both loved it, but the space concern is real since we are looking for a home that will last us at least 4-5 years.
Quote:
Originally Posted by patches403
I'm assuming your household income must be under $45,000 a year for $135,000 to be all you can afford? Is only one of you working? Is there any way you can raise your household income so you can raise your budget?
I'm new in my career so my income is low now, but it should raise up to 50-60k over the next 3 years. My wife is in between jobs and is capable of making 50-60k currently, but even with us both working we decided we would still want to buy lower and not have a crazy mortgage (on a 200-250k house for example). We want a starter home now and next home will be our "forever house".
Quote:
Originally Posted by hotzcatz
Being able to fix your own house is very empowering. Although rehab is a lot more work than new construction, but it doesn't have to be done immediately, either, since you'll already have a house to live in. If it were me, I'd say go for it if the house is in a location you like and has everything else you want other than the condition of the house.
When you mention floors replaced, you are talking about the floor covering and not the floor itself, right?
This is the second 'tear down' we're rehabbing and it's great for creating equity. In a year's time and without that much outlay other than to buy the house, we will almost triple the value of the house. Lots of patching, painting and little repairs all over the place, it couldn't have been done cost effectively by contractors, but as owner fixer-uppers, it works well.
Yes, floor coverings need to be replaced. Sub floors are in good condition from what I can see. We would have a home inspector be a contingency prior to purchase, but from a visual look the house seems structurally solid. It's just a cosmetic mess.
Quote:
Originally Posted by Linda_d
Agreed. If all you need to do is strip wallpaper, paint, take up carpet and put down laminante, etc that's doable. Fixing the home's systems are pro jobs.
BTW, the FHA has a mortgage/loan program that includes the mortgage as well as rehab costs that enables people to buy fixer uppers. I think it's called the "235" loan program. You might consider that program.
I believe this is called the 203k, but it's term are crappy. I talked over it with my mortgage broker and I didn't like the way it worked at all, so I would rather self finance the repairs and renovations.
I'm regularly amazed at how davebarnes figures out where anonymous posters live. It's a little creepy - like stalking.
Regardless, the house in the link is only 1152 square feet. They want (and probably need) something larger.
But OP uses terms that worry me. "Settle for a fixer upper." "Not a DIY guy." "Finance the improvements with a line of credit." All big red flags to me.
I agree that getting into a bigger mortgage is not a great idea. Considering that your wife isn't working right now and that your salary will be increasing (you say), my vote would lean towards putting off the home purchase fir 12-18 months. Your wife goes back to work and save every dime you can for a significantly larger down payment.
We bought a foreclosure on 5 acres in a desirable area and spent 3 years fixing it up. In the 3 years the area became even more desirable. When done, the home sold for almost 4 times we paid for it. However, we worked full-time during renovations which we did ourselves. It is not for the faint of heart - when your work day is done (or weekend comes), instead of relaxing and having fun, you have to work on the house. It gets old quickly, especially when the job is big and there seems to be no end in sight. For example, we replaced all the siding on the home with metal siding and it was a job that took a few weeks. It is a big home and the task seemed daunting at times!
Also, be careful working inside the house. People do not realize it but, for example, the mud used for walls has silicone in it. If you breathe too much of it without wearing a mask, you can get silicosis. Granted, you would have to breathe a lot of it but the dust is VERY fine and gets into your A/C ducts etc. and it is nigh impossible to get out afterwards. So, there is some steps, precautions, education that you need to take into account if you will be doing the work yourself. Same if there is a chance of mold infestation anywhere in your house or old carpets - you don't want to be breathing that crap - take precautions and follow recommendations/safety procedures.
However, looking at the prospect of so much dough in the bank can be a powerful motivator . Only you know if you are up for it. Just be careful, these things can easily test marriage. Thankfully my wife and I both wanted to do this and we have a strong marriage
Finally, if you are looking to make a profit from the remodel/TLC - do the work yourself. If you are going to hire contractors, all the realized profit will go to them. Quality of work obviously varies between contractors and so does pricing - any combination of expensive/crappy to great-work/cheap is possible, there are no rules.
^^^This. Print out ognend's post, put it on your refrigerator and read it every day for a week. Ask yourself if this is what you want to do and will feel happy about doing. 30+ years ago, we bought a house that was livable, but definitely needed work. My husband worked full-time and I was in school full-time. Working on projects every weekend got old QUICKLY. Some projects never got done. I'm sitting in a kitchen that should have been remodeled years ago. There are reasons I won't go into why we needed to buy a house fairly quickly, but if we had to do it over, we would do things differently.
I am reminded of one of the lawyers I used to work with, a really nice young guy, just starting out in his law career. One day, he said he hated his house. Why? "I bought a fixer-upper, but I'm not a fixer-upper kind of guy".
But OP uses terms that worry me. "Settle for a fixer upper." "Not a DIY guy." "Finance the improvements with a line of credit." All big red flags to me.
Your wife goes back to work and save every dime you can for a significantly larger down payment.
+1
Exception would be to settle for lower down payment and keep cash aside for expenses. Cashflow seems to be a concern.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
. Only you know if you are up for it. Just be careful, these things can easily test marriage. Thankfully my wife and I both wanted to do this and we have a strong marriage 
There are reasons I won't go into why we needed to buy a house fairly quickly, but if we had to do it over, we would do things differently.
