Cheap Fixer Upper Houses Need Patience and Determination
Cheap fixer upper houses are much cheaper than other types of foreclosures, but they require patience, determination and the commitment to restore it to a habitable condition.
But despite bad experiences by other buyers of fixer upper houses, you can still turn a fixer upper into a sound rental investment or a great place for your family. Just make sure you know what is required of you if you buy a fixer-upper.
The best way to estimate your repair costs for a fixer-upper is to hire a contractor to help you inspect the property. You should be able to visualize what you would do to make the property profitable or useful for you and your family.
A vision of living in a big place surrounded by trees within city limits was what guided the Wrights in Minnesota when they bought a 3,600-square-foot eight-bedroom fixer-upper farmhouse on 2.6 acres on Highwood Hills for $316,000. The property has open fields, a lawn, a tree house, a garbage dump, a collapsed garage and a dilapidated horse corral.
Aside from the damaged exterior buildings, there was also no working heating system, the kitchen cabinets have no doors and the electricity has temporary hook-up.
But the Wrights persisted and with determination, they were able to restore the house into a beautiful ranch farm property. All in all, they spent $15,000 for repairs that included new fixtures, new cabinets, new floors, new toilets, new sinks, new walls and new appliances. They bought from Craigslist and other bargain sellers and did most of the repair work.
In its most recent appraisal, the house was valued at $48,800 and the land was valued at $337,900.
For other prospective buyers of cheap fixer upper houses, it is a great help if you have passion for do-it-yourself projects so you can cut costs. You can leave the major repairs to experienced contractors and then you do minor repairs and improvements.
When preparing your finances for the home purchase, remember that FHA and the other government agencies guaranteeing home loans do not approve the loans if the properties do not pass their quality standards, so make sure you have alternative financing.
The FHA offers a 203k home loan which incorporates repair expenses into the loan, but you have to pass certain requirements to get this type of loan.
All in all, make a thorough research of available cheap fixer upper houses that you can afford to buy with your savings and with help from a lender.
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