Are you interested in a fixer upper in Texas? Read this first, by Johnnie Morine.

By Johnnie Morine

Are you interested in a fixer-upper in Texas? Read this first

If you are a first time homebuyer, it is highly likely that you have innumerable possible options, and they all seem valid!

But at the end of this spectrum of choices, you’ll have a choice to make. Either buy a home that is ‘move-in ready’ or get a fixer-upper. These two options sit on the opposite sides of the spectrum of choices you have at the moment. One requiring more work and major renovations while the other requiring almost no work.

This is an article that I dedicate to every homebuyer looking to buy a fixer upper. But, let’s get one thing clear, it is easy for you as a first time homebuyer to romanticize the outcomes, especially if you already like remodeling and forget the work you have to put in just to make it work. Also understand that there are a variety of fixer uppers, with some requiring some minor cosmetic updates while other require serious mechanical and structural fixes.

One of the primary reasons why most people prefer fixer-uppers is the fact that you can invest your time into the project and build equity along the way. But, be very cautious and I would suggest that before you buy a fixer upper house, make sure that you understand what needs to be update and the specific timelines of each. Also consider the investment in terms of money you have to dedicate towards this project. Remember, with such a project, it is easy to find yourself in way over your head.

IS IT WORTH IT?

There are a lot of pros and cons of buying a fixer upper; the most obvious pro being that you can

get this house with a lower price tag than what you would normally get with a move-in ready house. But, there is a catch, you may end up spending more in renovations just to make the house feel like home.

Let me give you an example; Say you find a home worth $150,000, a fixer upper but is in a neighborhood where homes typically sell for about $200,000-$250,000. Using a simple mortgage payoff calculator, here is a glimpse of what you could be saving by buying a fixer upper:

Home type Fixer Upper Move in ready

Home Price $150,000 $210,000

Down payment $30,000 $42,000

Loan Amount $120,000 $168,000 Mortgage Payment (15year term) $1,010 $1,380 Total interest rate (2.5% rate) $24,000 $33,600

Looking at the example given, you see that a fixer upper gives you a chance to save $60,000 on the overall price of the home and also, assuming that the home is actually cheaper, you may end up saving an upward of $12,000 on the down payment alone and over $10,000 in total interest. And that’s not all, the total monthly mortgage payments will be less which means that it will be easier to make the necessary renovations which will fully restore the home.

With so many ways you could end up savings extra money, it makes sense why so many people get excited about the idea of a fixer upper. But, that may be the case, but it is important to also keep in mind that there is a reason why it is a fixer upper. If you mess up, either in buying bad bones or even overlooking some of the renovations, your investment may drain down the sink!

To make sure that you don’t get duped into buying a property that is worth less, talk to a real estate agent, reach out to me today through https://www.thepowerisnow.com/johnnie-morine/ and let’s discuss the options available to you. Before buying a fixer upper in Texas;

1. LOOK AT WHAT YOU ARE BUYING.

When looking for a house to buy, it is easy to overlook some of the issues for instance a worn out flooring may not seem like much.

After all, these are easy fixes. But it is important to keep an open mind and consider the layout of the home. Do not overlook any details. The main things that you should be looking at could be the layout of the home, foundation, are all mechanicals intact? I am talking about things like the heating and cooling systems, water heaters, the water pumps and such. Also pay attention to the cosmetics, look at what can be changed and what you can accommodate.

2. IS YOUR BUDGET ALLOWING YOU?

It is important to first figure out your budget before hand and once you have it, make sure you stick to it. I have seen some shows where a couple will appear with a budget of $300,000 but then they need to have major structural changes to the walls or the foundation and suddenly, they have another $20,000 extra. That’s not realistic!

Once you find a home and its costs, figure out what you should offer including the repairs and stick to it! In addition, it is important that you remain flexible and be generous with your cost estimation. Take into consideration the cost of materials and labor it will take to make this fixer upper your home. Also make sure that your budget allows for a 5-10% for any problems that may arise during the renovation process.

You will experience utmost fulfillment, enjoyment and peace out of buying a home. But, be honest with yourself about what you are truly capable of. Do not be afraid to reach out to me for more information about what it takes to buy a fixer upper in Texas today.

ABOUT JOHNNIE MORINE

DRE#0627302 | Texas Over the course of almost 30 years of running successful business and strategic partnerships, Johnnie’s simple philosophy and approach to life have taught him the value of commitment, motivation, collaboration and an entrepreneurial spirit. Starting small as a sales agent, and an entrepreneur back in 1984, the idea to venture in the real estate industry had always been with him, but had not yet materialized. Today, Johnnie runs a prolific real brokerage firm where Seasoned REALTORS realize the bottom-line and how it affects their lives.

Sources

https://www.texasrealestate.com/members/posts/can-you-reallyhandle-a-home-makeover/ https://www.countryliving.com/life/entertainment/g35809430/ fixer-upper-rules/ https://www.ramseysolutions.com/real-estate/fixer-upper-home https://www.quickenloans.com/learn/buying-a-fixer-upper