Buying a house that needs a ton of work?

So lets just say you find this house that is on a tremendous amount of property, the house is solid as is boiler etc. the problem is aesthetically the house inside and out is really fucked up.

You know for a fact that you can get this house for less than half of the asking price and when this house is fixed up would fetch a ridiculous price.

The question is. Is there anyway to take a mortgage out for say 50k more than the agreed price so you can use that 50k for renovations?

Or would you just take the mortgage out and then immediately take another loan out for renovations etc?

Just wondering if its worth it to even entertain a property like this if you don't have the cash in pocket for renovations. Phone Post 3.0

We did this. A lot of work, a great result, sold it for a small profit and built a new house. Phone Post 3.0

You can't take out a mortgage for more than the appraised value of the house, but ask your mortgage company - there are great loans that you can lock in at a low rate at the same time. Phone Post 3.0

Louisvillain -


Do you plan on living in it as you upgrade it?



Can you take time off from work to oversee the work being done?



Do you plan on doing some/all of the work yourself?  If not, do you know a quality contractor?



 



I've done that before and it was stressful as a MFer.  Wood knot do again.

I can do some of the work and the stuff I can't I have someone in the family that can and is willing to do it, I'd just have to buy the materials. However, if the materials really get expensive I might be fucked as most of the money is going to down payment, closing costs etc.

The real question is, is it possible to take a bigger mortgage and get some of that money back in pocket to do renovations.

Don't think we'd live there while doing the work as we have a young kid so a work site is probably not the safest environment. LOL. Phone Post 3.0

I did this. Some banks will work additional money into the loan but there's sometimes weird provisions like having the work professionally done etc.

I paid for mine cash and paid 34k, I did the work myself and I'd estimate after the area upswings some it could be worth 300k+ Phone Post

Just to put things into perspective:

House was going for 600k years ago.

House has been in the market for 3-4 years and asking price kept falling.

Know for a fact that someone offered 225-250 and the owner accepted but when the buyer so how much work needed to be done they pulled out.

Pretty sure I can snatch this house for like 180k, put about 50k into it and be living like a king but its finding that additional 50k that's problematic. Phone Post 3.0

TTT. Phone Post 3.0

Paging Chael Sonnen

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How old is the house? Also are you not worried about having to fix plumbing, electrical etc?

I know jack about home renos except what I see on TV, but if Holmes on Homes has taught me anything that is costly as hell.

If you are someone who is not handy at all, should you avoid fix 'er uppers?

I'm guessing hiring someone to do all the repairs would end up costing more than just buying a better house?

Or could I save money that way? Phone Post

FRAT WARNING

As a man who is currently doing a complete makeover, DONT DO IT! Whatever you think it will cost, it will be a lot more. My quick story is I inherited my house when I lost my mom last year. The house was built in the 40s and has had zero work done to it since the 70s other than a new roof. Yours prob isnt in as bad of shape as mine was, but Ive dumped 25k in it in the last year. I have done it as I got the money for it, living in it as I did the work and had people do the work.

The monster was the guest house, which I hired a guy at a smoking deal of $300 to tear down the old walls (some kind of fiberboard). That job ended up over 5k when once we did the demo we realized the studs and footers were basically gone, the plumbing had 20 plus leaks and the wiring had been done with phone wire, yes phone wire.

I am proud of it now and I know my parents would be proud how I have restored the house I was born in to a pretty nice place to live. I still have 15k prob to do, but I am pleased to have people over now instead of always going to others' houses.

 

I would do it but I like working on shit. I would guess people saying don't had to contract out most of the work making it not worth it in the long run. I did my house room by room. No big all in one reno and it was fine. I would defiantly get it inspected to make sure foundation /electrical, sewer is up to code. Phone Post

Yes, if you can devote every waking moment and dollar you have to that house. If you're asking the OG, you're not qualified to do most of the work yourself. Learning as you go can be twice as time consuming and twice as expensive as having a pro do it.

2x

I did this and got what's called a 203k renovation loan that's specifically for distressed properties.

When you get that type of loan they don't like to just give you cash. EVERYTHING had to be professionally done and approved by my mortgage lady before we even got anywhere near closing. I'm talking detailed, itemized contracts from the contractor that they can't deviate from once you close.

It was a lot of paperwork but I ended up forming a relationship with a guy that has a well-respected local company and he's my go-to now.

We only did what absolutely had to be done to live in it to keep out mortgage criminally low and are trying to do the rest over the next few years out of pocket. The house is pretty nice just a little outdated. We fixed some structural shit and gutted our master bathroom because I'm pretty sure it had the bad aids.

There's very little that I'm willing to pay for for 30 years. The bank was wanting me to borrow tons of money and buy appliances and shit but why the fuck would I finance a frig for 30 years? Phone Post 3.0

Sounds like a steal. However, however long you think it will take, multiply that by 5. I speak from experience.

TTT...

I bought a house that I term as "wanting a lot of work" ---as oppposed to needing it....every room could use a whole of updating, but my wife and I can live here just fine without doing it.  Nice lot, good bones etc. and has appreciated 30% in the past year if you believe the Zillow and tax market value estimates...

BUT...I want to do some work on the place. 

Nevermind you will have to deal with every unrealistic expectation, communication breakdown, and other foreseeable issue you will have with your wife. Even if she isn't batshit crazy, she will inevitably ride your ass.

MattBFD - I did this and got what's called a 203k renovation loan that's specifically for distressed properties.

When you get that type of loan they don't like to just give you cash. EVERYTHING had to be professionally done and approved by my mortgage lady before we even got anywhere near closing. I'm talking detailed, itemized contracts from the contractor that they can't deviate from once you close.

It was a lot of paperwork but I ended up forming a relationship with a guy that has a well-respected local company and he's my go-to now.

We only did what absolutely had to be done to live in it to keep out mortgage criminally low and are trying to do the rest over the next few years out of pocket. The house is pretty nice just a little outdated. We fixed some structural shit and gutted our master bathroom because I'm pretty sure it had the bad aids.

There's very little that I'm willing to pay for for 30 years. The bank was wanting me to borrow tons of money and buy appliances and shit but why the fuck would I finance a frig for 30 years? Phone Post 3.0


This man speak truth. There are special loans out there. Just check with a realtor, and they can hook you up. We nearly did this a few years but got cold feet and backed out.