Today Jon and I signed the papers to buy our home. We are ecstatic. We are slightly overwhelmed. We can't wait to get started.
Seeing the potential in this house was very exciting to me, and to Jon. But we are ready for a house that "needs work". Last time we bought a house, we paid top dollar to get a home that didn't NEED work. I still tinkered with it any way, and half way through that tinkering, Jon declared, "Next time we buy a house, we are getting one that is a fixer-upper. You are going to fix it up anyway, and we might as well get a deal to start with."
Here are some tips for seeing the potential in real estate on the MLS that needs work:
1. Start out with a good spread sheet to help you plug in numbers for the mortgage and spit out how much cash you can spend on improvements.
2. Get a good feel for what improvements cost, and get yourself some experience doing projects on your own. We are very good now at calling around for bids, looking up tips on projects online, and spending money and time at home improvement stores. This took time.
3. Tour houses that are about the same age and layout of the fixer-upper that have been updated to get some inspiration.
4. Don't be afraid to make an offer on a property to secure it and get contractors there to help you with your due diligence. We've stopped paying inspectors $300 to tell us about the house without knowing costs in great detail. Instead, make appointments with an electrician, plumber, roofer, and foundation expert. This will cost you nothing, unless your foundation expert charges you $75 to come by like they do in Salt Lake. Still--well worth the peace of mind. These professionals can tell you loads about the house and give you prices too.
5. Never get emotionally attached to a property. Let it go if the numbers don't work.
6. See rule #5.