Orange County Fixer Uppers
'Buyer Beware' when considering the purchase of a fixer-upper. Buyers really need to know exactly what they are getting into before buying one of these properties. For many first-time home buyers, purchasing a fixer-upper can be a great opportunity, especially if they can live in the house while working on it, and better yet if they can do the work themselves. It makes for a less risky investment.
The belief that fixer-uppers represent easy money is not always the case. In fact, it can be quite risky buying one of these homes, doing a little work, and then trying to quickly resell for a large profit. Properties with damages to their structure, or an undesirable floor plan that requires major work, may not be able to be fixed up for a profit at all.
Purchasing A Fixer Upper
With proper planning, good profits can be made by purchasing properties that need fixing, making repairs, and then reselling. Without proper planning, a lot of money can be lost.
Part of a good plan is to find the least desirable home in the best neighborhood. Then, calculate the cost to bring the home to its full potential value. It's very important before making an offer to make sure that the resale market has been researched. A buyer does not want to get caught with an extra house payment for too long. It might be best to be ready to sell the home for under market value. Plan for it.
Be careful to not overpay for the property. Calculate improvement costs, selling costs, and how much profit is expected to be gained from the sale. Paying too much for the home will doom plans for quick profits. Work on things that make an instant impact on curb appeal, such as painting, landscaping, and removing debris. The best bet is to purchase homes that have only cosmetic problems like a trashy yard, bad carpet, peeling paint, and wallpaper all over the place. Fixing and cleaning cosmetic issues are usually inexpensive and easy.
Stay within a budget and don't go overboard, as it's not good to over improve. The highest paybacks can come from updating kitchens and baths. For the inexperienced investor, it may be best to find homes that only need cosmetic fixes and not major structural repairs.
The most important thing is to know what needs to be fixed. Always have an inspection performed by a home inspector before buying any property. It is well worth the money. I recommend this even to people that work in the construction industry.