Three Things Every Buyer Needs to Know Before Getting a Fixer-Upper

Three Things Every Buyer Needs to Know Before Getting a Fixer-Upper

Buying a fixer-upper can be a great way to get a good deal on a home that will rapidly increase in value once you improve it. It can also be a money pit if you’re not careful.

If you’re thinking of investing in a fixer-upper, whether for your personal home, a rental, or a flip, make sure you know and do these three things before jumping in:

Three things to know before getting a fixer-upper

  1. Know the condition of the Big 5: 1) Roof, 2) Foundation (a biggie in Texas!), 3) Electrical, 4) Plumbing, and 5) Heating/AC. In one house, I missed an outdated electrical panel, and it cost an unexpected (and unbudgeted!) $2,500 to replace. On another house, after our due diligence on the Big 5, we found the house only needed cosmetics touch-ups. We turned the property in under two weeks, clearing $40,000.
  2. Get a reputable inspection company to go through the property.  They’ll give you a general overview of possible issues, then you’ll want to follow up with licensed specialists to take a closer look.
  3. Know how you will pay for the home.  If you’re trying to buy a fixer upper with an FHA, VA or conventional loan, you’ll discover that lenders will not lend on a home that requires major repair work.  Unless you’re going to use the 203K loan program, where the lender holds money in escrow for repairs, you will need to be ready to pay cash, hard money, or use a private money lender.

Have you ever purchased a fixer-upper? What was your experience? Do you have other tips to recommend?

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How We Buy Scary Houses You Don't Think Will Sell

Scary houses are no problem for us! We love houses that need work, are vacant, or are just plain distressed. In fact, we specialize in purchasing homes that the average buyer won’t touch.

As a real estate investment firm, KBN Homes, LLC has several creative ways to buy homes that also help YOU meet your goal of getting paid to sell your client’s home! Here are the three most common:

  1. Cash purchase. Yes, cold, hard, real cash! This allows you and the seller to close fast, usually within 7-10 days for qualifying properties.
  2. Joint venture. We partner with the homeowner to clean up and fix major issues so they can realize a higher sales price.
  3. Owner sells the home to us on terms. Generally we can pay more for the house if the owner is open to getting a higher price over time.

How do you get paid? We simply add your commission/referral fee to the transaction!

If you have a scary house in your portfolio now, or if you come across one, contact us! We’d love to help you grow your business while making neighborhoods great again!