He should consider things like condition of the foundation, floor supports, termites, water damage, windows, heating system, water pipes, electric (fuses vs. knob and tube).
I can see how he would want to purchase a house for $5,ooo, but by the time he puts all the money into the house, it maybe more than if he were to buy one already completed. OR the house may be so magnificant that when he goes to sell it - he may get WAY less than invested do to the location.
He should also think about how much he knows about the above things. If he is VERY handy and knowledgeable about electricity, heating and plumbing - those tend to get VERY expensive. Also does he have friends that will be able to help him in any of those areas? If not, it may be "more than he can chew" doing it alone or with very little help.
Another thing to think about is how much cash he has readily available to put into the home. One thing he can do is estimate the cost of finishing the home before and especially after the inspection. He can make a list of the things it needs, go to Lowes or Home Depot (Altoona has both) and start adding up the estimated cost.
Remind him NOT to forget about the "little stuff". Shower heads, ceiling, floor & window trim, sinks, fixtures, ceiling fans, harware and accessories for the cabinets, paint, doors, etc.... Those "little things" add up in hurry.
I'm not a proffesional in any way, but when i bouoght my house and it needed a few things - it cost us more than the house was ever going to be worth and we lost alot of money.
I hope this helps :)
Lisa, the "home buyer" is absolutely right! $he I$ right on the money!$! She is an experienced home owner that found out the hard way! Call a Realtor and ask for Buyers representation before purchasing a house. Realtors will advise you about inspections, then you can get an idea of how much money you will be investing in a 5,000 property. You may be shocked how much you need to make a 5,000 property "livable.
Have your home inspection and determine what costs are involved for fixing it up. I have found that many $5000 properties in this town just need torn down. Distressed properties are pursued by many savvy investors throughout and they all usually have one thing in common......LOCATION. You can easily spend way more money on a dwelling to finish it than it may be worth when finished. So, not only have you wasted your money, but your precious time as well. Re-read the last two answers ...they are some good advice. By the way....who told him is was worth 12k? You may need to look at that avenue as well.
Unless this is written up as a "as is", the seller in PA usually is responsible for the CO (Certificate of Occupancy). So, if that is the case here, it might be worth going ahead with an inspection. How handy is your son?
Thing is - this is one heck of a buyers market - and even more so in a tertiary market like Altoona. If he can find a decent house that doesn't need much in a good neighborhood with a good school system - with a distressed seller ... that's a gem. And he should buy more house for his money - the payments on $30,000 are SO cheap.
An idea might be for him to buy something like this: MLS 0024670. And then rent out some rooms to pay his mortgage. So long as he makes enough to buy a better house now at a discount that's perhaps his best option.