What are the pros and cons of buying a fixer upper vs a home already remodled?
86801
Hello Kenna’s mum. Ah the joys of having children and losing one’s identity into them… \n\nI’m going to assume that, as you use the word ‘home’ rather than ‘house’, you are looking at something in which to live rather than to turn a profit. In which case, I think the single biggest FOR is that you will have a home onto which you have indelibly stamped your personality if you choose a doer upper over something already complete. Pretty well everything else can be both a FOR and AGAINST depending on whom you are. And that’s the key. If you understand what you’re buying and can correctly judge the amount of work needed on a doer upper you can make very large savings. But you have to be good at budgeting and sticking to a budget; you have to really enjoy creating something from nothing (which includes the finishing detail – so many people can do 95% of something and then get bored); can you manage others (contractors, trade people, your partner?); do you have the time available for the commitment?; can you live in the middle of a building site for several months?; are you both fully committed to the same vision? These questions have to be addressed. If the answers are yes then you will embark on an adventure that will be both financially and spiritually satisfying. If the answer is no, you risk emotional turmoil and financial disaster. \n\nSo you have to look honestly at yourself and your partner. Is renovating a house really you? And to what extent can you maintain your interest/calmness/partnership if things start to get sticky? A lot of doer uppers require only superficial work and so that type of property is quite easy for anyone with a limited amount of creativity and stickability. I am always amazed by how limited the average person’s ability is to see what a run down but fundamentally sound property could be. They don’t see beyond what is, to envisage how, with often minimal effort, something can be transformed into a highly desirable home. So, which are you? Is one of you creative and the other practical? That’s the combination needed. If you’re creative or both practical that can often be a problem. Some time ago my partner and I bought a house for way below its true value because no one else seemed to see what we saw. We fell in love with it, knocked down a wall, stripped down woodwork, repainted everything else, fitted a new kitchen etc etc but kept the essence of the house intact. Most of the work I was able to do myself because I’m quite practical and my wife is highly creative and ‘visionary’, but contractors are always needed for some of the more technical things (and they are unbelievably frustrating). When we had finished, everyone who thought we were mad when we started, couldn’t praise the place enough. When we reluctantly sold (very reluctantly – maybe that’s an AGAINST – your emotional investment is huge) because of the need to move elsewhere, we doubled our money. Since then we have built our own home, but that’s a whole different story \n\nFrom your profile you seem to be very busy. Dedicated to an 11 month old child and a wonderfully rewarding vocation. Unless your partner can take on the lion’s share of the doer upper project, you’re going to have to drop the ‘busy’ and simply become super…mum  On the other hand, if the doer upper is a long term project and you’re the sort of couple that aren’t looking for a house from the pages of ‘House and Garden’ in the short term, then go for the doer upper – it can be a wonderful bonding exercise. But keep a very tight rein on those purse strings. And, if you haven’t already seen it, go rent out the movie – The Money Pit. It’s really funny but oh how true to life!!! Johno
889637
Look at the site below, they might have some helpful information. They suggest that you can save a lot of money by acting as your own General Contractor. I think one of the biggest obstacles is finding suitable land to purchase and build on. I've been looking to buy land for years and have found that the less expensive lots are usually in the hills with no flat pad and I prefer to have a yard. If you have some construction knowledge/background and are not oppossed to living in the hills then one of these types of lots may be ideal for you. You can save money by doing the grading yourself.\n\nGood luck
853891
Both have pros and cons.  Personally, I think the pre owned homes are better.\n\nWith a pre owned home, it will already be "broken in".  Just like a car, just because it's new, doesn't mean it's perfect.  Let the first owner take it for the first 2 to 7 years.  I lean towards the 7.  \n\nBy then, the kinks should be out of it.  Also, the neighborhood should already have it's personality by then,  On a new home, all you know about the neighbors is that they qualified for a loan - and in today's market, maybe not even that.  Many investors are getting past the builders attempts to keep them out, buying several houses (I don't think the builders try that hard to keep them out) and then renting them.  So you may be moving into a rental neighborhood anyhow.\n\nPre owned has trees.  Mature landscaping.  Character.  Window coverings...
475753
My husband and I were faced with the question to build our first home, or just buy.  After talking with plenty of friends who have or are building their home, and doing some research on it - we decided to buy a brand new home instead.  \n\nThe biggest complaints I heard was getting all those permits... water,  sewer, utilities, building... the list goes on.  (Where I live - which is cheap compared to most places, each permit is no less than 500$)\n\nI don't want to discourage you though... perhaps you have a bit more patience than us!  I would just do all the research you can do for the area you live in.  Ask around.
223989
market determines the rate, look in the paper and find comparables.\n\nIf the neighborhood is not much of a rental area then you can charge a little bit higher rate but it will be harder to find a renter.\n\nYou don't want to have less money coming in that going out. You need to have a positive cash flow or you won't have the money to keep the house fixed up when it needs something and it will grow less and less valuable (might still go up but not as fast as the neighborhood) from deffered maintenance. You would be better off selling and buying a rental that has a positive cash flow.
1053287
Judging by the tone of your question, I would strongly recommend that you buy the nice house and stay out of the "slumlord" business.\n\nNow, if you want to buy a nicer duplex in a good area of Cleveland and maintain and manage it properly, you might attract better tenants. That would probably be a better investment for you. Believe me, I am speaking from experience.\n\nBTW, I am a REALTOR   in the Greater Cleveland area.
1115574
Not enough info for a good answer.\n\nIf you haven’t bought the house yet then it’s negotiable as to who pays or how it is shared.  And part of that is how good a deal you are getting on the house and what the market is like in your area.  Either one of you (buyer or seller) might be better off eating the damage rather waiting for the next buyer or wait to find another acceptable house.\n\nIf you already bought the house – did you have it inspected?  Might call the inspector and get their take on the matter.  Was the damage readily apparent?  How extensive is the damage?  Is it reasonable that the seller knew or should have known of the condition and failed to disclose it?  \n\nAs you see there is no straight answer to your question.  Talk to your agent/broker, your inspector, a contractor or 2 and make a rational decision on how to proceed.
269114
If you can afford a single-family home, then go for it.\nMost of the time, a single-family house would appreciate at a higher rate than a duplex or condos.  Also, depends on location, condos and duplex might take longer at time of resale. \nUnless you plan to move within a year or so, and plan to keep the duplex as investment property (rent to renters),\na single family house is a better bet.
1173939
If there are things that need to be fixed - you can ask the seller to do this. That's what I did when I bought my last place and I got a lot of stuff fixed.\n\nThis is a situation that your realtor should be able to fix.
572070
make sure you get a full tour of the house and all plumbing works have someone who knows about purchasing houses with you
319248
The equity in real estate is better, since cars are apt to either go missing or be destroyed, making the odds of a repo smaller, whereas a house the odds are much better.\nIt is always on the mind of any lender when making a loan, the "What If" clause if they need to recover their money.\nHope this helps\nJohn
62494
Well for starters a new home will cost less to maintain for the first 10 to 15 years, after this they are about the same. You will most likely pay a little more for a new home than one that is older.  However, I personaly think that older homes are usualy built better.  The key to buying an older home is to get a GOOD home inspector to make sure the property has no major problems and to let you know what the little problems are.  Also, with new homes you are more likely to run in to CC&R that could come into conflict with your renters.\nP.S. I sell new homes for a major builder for a living.
296466
If you are handy with a hammer and you can buy it dirt cheap, why not? You will have to replace a lot of stuff like sheetrock but you can come out pretty good if the price is right and you have the time.\n\nIf it has already been done, then I would really scrutinize the repairs. And still want it cheap-----just in case!
1140204
depends on your lifestyle, you like to move around, rent , if you are looking for something set then make the jump on something while the market is down then renovate and sell. or stay which ever. apprasials are going up for taxes, that is something to think about talk to a realitor, but they get about 6% of sale price and dont think about owner finance its not good for that. good luck
299891
You do not need any program. They are all crooks.  I did not use any program.  I own four houses in the Bayarea.  Made $500k in appreciation last year.  Here is what you do.  Look for a fixer upper.  Look at comps (try zilow.com) to see what the market is. Estimate how much it will cost to bring the property up to market.  Offer low enough to get back the repair cost plus 20% to 30% more.  Use option ARM to keep cash flow manageable. As property value goes up pull cash and buy another.  With just 3% to 5% appreciation, you can leverage and get 30% to 35% return (up to 40% with tax savings) .  Not a get rich quick scheeme but you will do very well.
1033413
bridge loan will secure the house you want but will be pricey after awhile. if you get a new loan/mortgage you'll get the house and will be able to use the money from the sale to help pay some of it off. make sure you get little or no prepayment penalties. your refinance will only be advantageous if your credit score is good. you will need some seasoning in order to get a refinance as most lenders will not loan you money right after you move in. some will but for a very high rate. either way, you're taking out more money than you need to secure what you want. my advice, get a new mortgage, I assume you've paid or are close to paying off your old one?, and secure your new house since it is very important to you. once you sell the house, retain a good majority of the money, pay off the old mortgage is you haven't already. if you rate and terms are good, then keep them for your new mortgage. if they're bad, wait at least 6-8 months before refinancing.
1155603
The advantage is in knowing that you have equity in your home already....Don't let the seller know what it got appriased at - ok - - -Now - if you needed help with the closing cost, that is another matter, the seller could help with closing cost, and you would make a offer to the seller to adjust the purchase price....I do not recommend this - but it has been done in the past, expecially if you already have your financing approved.  The advantages is down the road, if you wanted to do a line of credit - you have the equity of 11,000 to use - for newer carpet - etc....  I would just let it build since home markets are on the rise in different areas, and on the decline in others.  Good Luck.