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How to Know if a Fixer Upper is For You

(First off, sorry for the hiatus! Only fresh content around here, y'all, so when things get busy, things don't get written!)

(Oh this house would be so lovely if I had 5 years and half a million dollars!) 

If you are like many Americans, you have a hankering for HGTV (or a love-hate relationship with the buyers on House Hunters) and the Cinderella stories that come out of shows like Fixer Upper, Property Brothers, or Flip or Flop. The renovation TV phenomena has definitely flushed out a lot of people who crave the idea of buying something cheap "with potential" and gaining huge amounts of equity with all the right renovation strategies, not to mention the perks of a perfectly remodeled home. I would say over 75% of my buyers over the last several years have some level of interest in this fairy tale scenario.

But how do you know, as an actual, non-TV-scripted, buyer, if a fixer upper is right for you?

Well lets crash this fairy tale and talk about some basics...

Do You Have the Cash? 

The biggest issue with the fairy-tale-flip scenario is money. Most of those 'buyers' on TV are actually current homeowners who were able to save up some money to pay for a renovation and then were televised during that reno. And, sometimes, like on Flip or Flop, you are looking at investors instead who do have the cash. So the ideal of buying your next home while planning on flipping it or renovating at the same time, is a hard path to follow and rarely the actual scenario on screen.

However, it is possible! If you aren't stretching your budget already with the house purchase, holding back some cash for renovations is possible if you buy under budget.

And, while not always easy or clear-cut, you may be able to finance some repairs with a construction loan which rolls in construction costs into a loan based on potential equity of the finished product. Just make sure the additional amount doesn't stretch your monthly mortgage too much!

If you are looking at a home with major repairs, not just cosmetic, get several quotes from the get-go to make sure you have a worst-case scenario on costs before you purchase! And remember, everything costs more than you think it will!

Do You Have the Patience? 

This may be even more important than the cash. Unless you have so much cash that you are able to hire out all the work, leave a designer to deal with the details and take a vacation while the reno happens, get ready to deal with some headaches.

First off, if you are planning the DIY method, either be handy already, or really ready to learn, make mistakes, get frustrated, and maybe even have to put things on the back-burner until you can pay someone else to do it. If you are an easily frustrated person, or someone who likes to spend their weekends lounging instead of working, DIY reno may not be for you.

Also, remember that most home improvements take longer than the 30 min show you just watched. Especially if you are DIYing, don't expect your Cinderella story to happen overnight, or maybe even in the first year. You may be dreaming of those stainless steel appliances but it may take several years to get there if you have to start with the less-than-dreamy 200-amp service line and new drywall first.

Finally, remember that even if you aren't DIYing, there is a good chance you aren't able to afford two homes at once and thus your new home may be a construction zone for some time while you are living there. If you haven't factored in eating out every night into your 2-month long kitchen renovation or haven't figured out what to do with your 8 and 10 year olds while the second story bedrooms are being added, then you may need to rethink your buying strategy.

Are You Flexible? 

Not unlike being patient, renovations sometimes don't turn out to plan. Maybe you find out there is a sink hole under where you wanted to add a family room or maybe the budget for a new bathroom gets used on upgrading the HVAC system that just went. Or maybe its that the township requires you to rework your floorplan to fit set back lines.

Whatever the issue, the issue will happen. So if you are buying your fixer-upper with a very set time frame and very set plan of attack and would be heart broken to any changes on either, a fixer upper is not for you!

(It really helps to have a sense of humor when things go wrong.... hopefully not this wrong) 

However, if you open to change, are patient with how long things will take, are ok with living in a construction zone and/or living without modern or luxury changes for a little while, and you are being realistic with budget, a fixer upper could be for you!

Be realistic about what you can accomplish and how much it will cost and a fixer upper is an amazing opportunity to not only gain equity (which in our limited-inventory housing market could be huge!) but also make a home your own at lower cost! As an owner of a fixer-upper myself, I can tell you how rewarding the Cinderella story can be. Just be open, able, patient and realistic and you might have a (slightly longer) version of the HGTV dream yourself.


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