One thing there never seems to be a shortage of are fixer upper homes. While there are many more older homes than new construction, the amount of work they need will vary greatly. As you can imagine, cosmetic fixer uppers are in great demand. A coat of paint and some new carpeting and you have a move-in home. Unfortunately, investors who specialize in the fix and flip part of the market know this only too well. The buyers make cash offers. This means that the seller does not have to worry about whether the home will appraise for a loan or even whether the buyers will qualify for a loan. Yet there is some smaller hope for non-investors in that the professional buyer usually wants a discount off the asked for price.
Fixer Upper Loans
So while I do not recommend focusing exclusively on fixer upper homes, it is worth making a strong offer when you come across one. There are loans specifically for rehabilitating a home, both FHA and now FNMA. Make sure you are working with a lender who does these loans as not all lenders do.
Keep In Mind
Things to keep in mind when you pursue a fixer upper home:
It’s going to take a lot more money than you may think
You will underestimate the amount of work it needs
You will overestimate you ability to do some of it yourself
The Rehabilitation Loan will only pay for professional work so you will still have to hire someone to benefit from such a loan
All this not withstanding, if you find a fixer upper home it’s worth making an offer. The worst that can happen is you will be outbid.
If you want help in navigating this process as well as implementing safeguards to protect yourself in case of surprises, contact me at 760 622 5087 or [email protected] and we can discuss how to optimize your plan.