Should You Buy A Fixer?
Should you buy a fixer? ....Sure! We are big advocates of saying yes to a challenge, especially because our friends and family were skeptical when we said we were going to buy, fix, and sell houses for a couple of years back in 2013.
Naomi and I lived in Los Angeles and we both had typical 9-6 jobs working in finance and television. Sick of the daily grind and the corporations controlling our pay checks, we decided we wanted to work for ourselves. I accidentally came upon a podcast about "real estate freedom" that detailed the process of wholesaling and flipping houses. This was the time following the housing market crash and home prices were rock bottom.
We were still in our 20's and knew very little about the housing market, except that we had purchased a beautiful little condo as a short sale and already had a good amount of appreciation in the property. So what if we took that appreciation and used the gains to flip houses in South Florida, where homes could be purchased for around $100,000?
So we sold our condo and moved to Ft. Lauderdale, FL. Needless to say, the people in our immediate circle thought we were nuts. Why would we leave L.A? Why would we leave our jobs? What did we know about renovating houses? All valid questions. BUT, we knew ourselves and we knew we could learn and we knew we were a good team. That is ultimately how we decided to take the plunge. If you believe in yourself and you believe you can do it, you can do it. Sounds trite, but it's true.
If you have the desire and you back it up with a budget and realistic numbers, you can make a profit! HGTV has shown us all that it can be done. And if you just want to buy a fixer, renovate it and live in it, that's great too. Just be aware of the stress that comes along with living in a home that's also being renovated. Naomi and I have done this too.
After we flipped several homes in Florida, we moved back to CA and bought our first home in Marin County which was built in 1955. It's no exaggeration to say every single thing needed to be repaired or replaced. And yes, there were times we laid in bed and cried because of how long the projects took and the constant disarray in the home, especially once we had a baby too!
All that said, we made a great investment, we lived in the home for 7 years, we still own it, it looks beautiful, and it has appreciated to more than twice the purchase price! We have had several tenants who have all been fabulous because they respected the home and the work we put into it. So if you want to take the leap and put in the blood, sweat and tears, we say go for it!
Just crunch your numbers up front and do your research - know your purchase and closing costs, renovation costs, which renovations will give you the most return and which renovations won't give you any return, potential selling price after renovations, if you'll need to stage, agent commission costs, title and escrow costs......everything! And put it in a spreadsheet! This way you'll have a foundation to work from and you can adjust as you go. And you will need to adjust, so make sure you're willing to be flexible. And our best advice...if you can swing it, live somewhere else while you're renovating anything big like a kitchen!
And if you're looking for support, Thorne Home Team is happy to help you recognize which properties are a good value, estimate renovation costs and recommend vendors.
Search for your next fixer here!
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