Rentals in 60651>Question Details

Michael Patt…, Renter in Chicago, IL

How much money should you spend for a fixer upper home and home much should you put into it?

Asked by Michael Patterson, Chicago, IL Fri Sep 20, 2013

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You will need an experienced 203k Consultant who can evaluate the property, and identify FHA and HUD 203k requirements, and guidelines. The 203k Consultant should be able to prepare a cost estimate and Contractors bid package.




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Dana Lindberg
CFS Mortgage - http://www.cfs203k.com
0 votes Thank Flag Link Sat Sep 28, 2013
Michael,

Mary Kay Laurent gave you sound advice.
0 votes Thank Flag Link Tue Sep 24, 2013
Your realtor should be able to get you comps for homes in your area and help you determine the market and how much your home would get if renovated. There are different levels of renovations, from simple updates (that can do the job for resale) to water parks in the bathrooms and kitchen's that are amazing! If you know what renovated homes are going for, you can figure out your budget. There is nothing worse than over renovating a home and then you can't get your money out of it. It's a fine line, get a realtor's advice!!!!
0 votes Thank Flag Link Fri Sep 20, 2013
Hi Michael. Thanks for the question, however, it is very open ended with lots of variables. Your post reads as though you do have something in mind both short and long term. You need clear direction of how to start and where you want to end up. I would suggest not going it alone because there is no all-in-one answer for what you are asking. Be wise with your money out of the gate and consider consulting with a professional agent who can guide you and assist with making good choices. Guessing may cost far more than you realize. Good luck to you!
0 votes Thank Flag Link Fri Sep 20, 2013
these questions are telling.. yourin over your head..gowork for someone who has expereince..youare going to get rocked guessing at this
0 votes Thank Flag Link Fri Sep 20, 2013
whatever
Flag Tue Sep 24, 2013
This is where a long-time, local agent can be invaluable. If you decided that you want to fix it and sell it ----Talk to him or her at length about what the top of the market is for your project’s area, then shoot for something just below that. You never want to be the most expensive home, but it’s okay to be darn close. Also, what are buyers looking for in that area?

How much you should spend on the house ? It Depends of what you want to do with the house-FLIP-RENT- KEEP IT
0 votes Thank Flag Link Fri Sep 20, 2013
It depends on where you want to buy. Just realize that the money spent doesn't automatically equate to money gained. If you have any further questions feel free to contact me.
0 votes Thank Flag Link Fri Sep 20, 2013
There are a number of variables involved here. First, buying a fixer-upper is not only a matter of how much money you can afford, but how much time and energy. Also, you would need to determine how much value any improvements would add to a property should you decide to flip it or rent it out.
0 votes Thank Flag Link Fri Sep 20, 2013
The purchase price plus repair costs should not exceed market value for the area and they type of home.
0 votes Thank Flag Link Fri Sep 20, 2013
ARV minus costs minus 20% or $20,000 profit. However you choose to calculate it.
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If you are asking the question, you may be on thin ice.
You need to do more research and actually learn the true numbers as they apply in Chicago. to arrive at the ARV.
0 votes Thank Flag Link Fri Sep 20, 2013
WRONG. I'm not on thin ice but thakns for your input.
Flag Tue Sep 24, 2013
That's a very difficult question to answer. What do you plan to do with the home once it's fixed up? Will you rent it? Live in it? Sell it, in other words, 'flip' it? The answer to those questions can weigh heavily on the answer to your original question. Most investors have a rule of thumb, AFTER fix up value, minus cost of repairs, minus 30%. THAT is your maximum offer. That formula can change, however, depending on what you plan to do with the home once it's fixed up. As far as how much you put into it, I would suggest that you do not improve the home more than the neighborhood will bear. In other words, if all the other homes in the neighborhood have formica counter tops, then put in very nice formica counter tops, but do NOT put in granite. Same rule holds true for kitchen cabinets and fixtures, bath fixtures and flooring.
0 votes Thank Flag Link Fri Sep 20, 2013
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