Deciding if a Fixer upper is good for you

Be sure you are prepared for a Fixer-upper.

The oft heard phrase "Buyer Beware" is never more appropriate than when considering the purchase of a fixer-upper.You really need to know exactly what you’re getting into before buying.




It’s commonly believed that fixer-upper properties represent easy money that is ripe for the taking - that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. Usually, this simply isn't the case. Although, with proper planning and foresight, good profits can be made by buying "distressed" properties at less than market value, making appropriate improvements and repairs, and then reselling. And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It’s less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.



The most important thing to know before making a decision on such a purchase is what needs to be fixed. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or wallpaper are the best bet. This is especially true for the first time buyer looking to live in the house for a while before reselling. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays a nice return. Don’t be afraid of buying a fixer-upper in need of this kind of repair. Properties with structural damage, or a floor plan that requires major work to remedy, usually can’t be "fixed up" at a profit.



Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper. Make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection. Often, sellers will be willing to lower the sales price to sell the home "as is" instead of paying for the repairs.



Be careful that you don’t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer.

San Diego Fires & The Impact on Real Estate

Here in the San Diego area we are all starting to breath a little easier and get back to life. What a strange few days it has been. One minute, you think you are going to get up, go to work and start another typically hectic work-week. Next thing, you are throwing your most prized possessions in your car and taking off for safety.

Lucky for my family, after 2 days away, we returned home to an undamaged house and neighborhood. We feel blessed by that.

How will the recent fires affect our San Diego Real Estate market? I believe there will be both negative and positive repercussions from the fires. Obviously, there will be many families needing homes immediately. Some will rent, while waiting to rebuild. Others will buy, scared to remain in the same location that proved so dangerous to their families. In any case, there will be some activity created by the loss of homes

Some who were considering buying in San Diego may be frightened by the fires, and change their buying plans. Others will look at how the disaster was handled, the sense of calm, caring and community that took place, and decide that they want to live amongst people of such character and kindness.

In any case, the displaced families will need to be helped and cared for by professionals who can help them find a new place to call home. I hope they are all able to quickly settle in and move on with their lives, rebuild and create new memories to replace those that were swept away by the fires.

If you are one of those impacted by the fire, and need a list of contractors and service providers that you can trust, please contact me. I have a list of professionals in every type of industry that I know can be trusted. They have come to me highly recommended. You will have one less thing to worry about by having recommendations of reputable service providers at hand.