Fixer Upper is one of my favorite HGTV shows. Chip and Joanna Gaines make the process appear exciting and fun, but I imagine there are a lot of behind-the-scene negotiations and inspections we’re not exposed to in order to make the show more entertaining. Chip and Joanna are a very sweet couple and seem very genuine and down to earth, so that’s what keeps me going back and even recording the show so that I don’t miss an episode.
But is this possible to find a home for $85,000 and put $80,000 into renovations in Abilene, Texas? Well, yes, it is possible in our area as long as you have patience to find the right property and make sure you have a budget, stick with your budget, AND hire a professional Realtor to help you with market determination and analysis to make sure you don’t overspend for your property and location will retain the $160,000 value that your investment demands.
You also need to be prepared to hire professionals to inspect your property to determine what deficiencies need to be addressed immediately, but you need to be open to surprises too because most of the time the properties that are the least expensive are foreclosure properties and these properties are being sold strictly “as-is.”
When you purchase a fixer-upper that will need total renovations it’s best to purchase it for cash or go to your bank and set up a financing option that will allow you to make draws like a construction loan and then if need be re-finance it on a regular mortgage once the renovations are complete.
The bank will be very strict on time lines and you’ll have to be in constant communication with your banker. You cannot purchase a fixer-upper on a FHA or VA loan because with those loans the house and the purchaser have to qualify for the loan. You also need to be prepared to live in another location during renovations, which could take 6 to 8 weeks.
The buyers I have helped with fixer-uppers for the most part have stayed in their homes for over 5 years and some have never moved. When you take on this challenge of fixing up a property it’s almost like birthing a child; it becomes a part of you. If you’re up for a fixer-upper give me a call and let’s talk about it.