fix it

So you are one of those very talented and handy people. You can fix anything; some of your skills you learned from your parents, some of you seemed to have learned through osmosis but whatever way you have acquired your handyman skills you know they can be put to use in one of those homes you find that has been thrashed. Whether it’s a foreclosure, short sale or has been a rental, you have the ability to take all things ugly and make them beautiful again.

There is much to be said for “sweat equity” but there are some things that must be considered when deciding to purchase a home in need of repairs.

1. What type of financing are you getting? If it is FHA, VA or USDA you need to back up the horses. All of these types of loans require the property to be in habitable condition. There can be no holes in walls, no missing flooring, no peeling paint inside or out, no broken windows, sometimes even torn screens are a problem and unpermitted rooms have some challenges as well. There is one type of loan, FHA, that offers a special program called a 203K loan. That is where you can borrow additional money for the repairs but you MUST hire a licensed contractor to complete the work. That pretty much defeats the purpose of the “sweat equity”.

2. How much is needed in repairs? Does the foundation need to be replaced? Does the roof need to be replaced? Will you have to tear out the kitchen cabinets? Some of these repairs can be beyond  your expertise and must be completed by a licensed contractor. Then you must ask yourself again; “Am I defeating the purpose of the fixer?”

3. Have you put your pencil to the paper? When everything is all said and done, how much money will you be spending just to purchase the materials? How much of your time will you invest in the repairs? How much money will you need to spend on rent before you can even move into the house? All of these costs MUST be considered and calculated. Often times you can make more money per hour at your regular job. Then is the “sweat equity” worth the amount of time you will need to invest in repairs?

The long and short of this is you must analyse this carefully. Many clients have discovered by the time they invest the money and time into the home that appears to be a bargain, it will cost the same as the home that is move in ready.

Don’t be lured into a trap. Do your homework. Make educated decisions and…….

Happy House Hunting!

CalBRE Lic. --- Jack Williams #00419592 --- Diana Williams #00986318 --- Laura Lynne Wyatt #01443357