I need advise on purchasing a fixer-upper. Should I or shouldn't I?

Asked by Susan, Texas Sat Jun 14, 2008

I recently came across a FU for 63,000 (appraisal value is 99,500). I have a home w/ equity. Have 3 children and want to move down to do better for them financially. I thought if I can't sell mine, I could rent it out while living in the fixer-upper and fixing it as I can. I would have to get a home equity loan in order to purchase the other home. I am having it inspected on Tuesday. If it has no structual damage, is it a good deal? Most of the repairs are cosmetic that I can tell. Would my home eventually sell? And I also thought I might sell the fixer upper after I have made some repairs. Trying to make things better for us. THe house we live in now is fairly nice, it just doesn't have a master bathroom which isn't too appealing to people. It is a large home however. Also, this would help me square up a little debt. Any advise? Thanks a lot! Susan

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Cameron Piper, Agent, Forest Lake, MN
Sat Jun 14, 2008
Susan,

STOP! In today's market if you want to move and own a house that you need to sell to make this happen. You NEED TO SELL FIRST. I'm sorry for the strong response but I am seeing far too many people these days in foreclosure because they found a house that they bought before they sold their previous one.

If you need to sell, do that first and then start your search for a fixer upper. There are plenty of deals in today's market, there will be one around when you get your house sold. If you don't find one right away, you should be able to find a decent home to rent from someone else who bought before buying. Renting your house out as a plan isn't much of a plan. Aside from the fact that renting a house is hard work (finding the renters, collecting payments, maintenance, etc.), they often sit vacant, leaving you with two house payments.

Fixer uppers are also hard work and while I don't know the market in Texas as some others do, I will tell you that $36,500 doesn't leave a lot of wiggle room to make repairs, and a profit for the time that you put in. If you really like the idea of fixers, then hire an agent that has done them before and can help you through the process. Remember, it isn't as easy as they make it look and you don't make as much money as "Flip this House" leads you to believe.

I hope that, sorry to have deflated you.

Cameron Piper
Web Reference:  http://www.campiper.com
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