I have heard a lot of people complaining that there are just no homes to buy right now.
And, to some extent, that is correct.
Prices are up.. but, that does not mean you cannot find a house you can afford.
Especially if you are willing to invest in a little elbow grease.
Houses that are in excellent shape with all the updates are going for top dollar.
Many houses that need some work have prices that are much more reasonable. If you can imagine how they would look with some cosmetic work, maybe a new roof/siding/windows, you may be able to uncover that diamond in the rough.
Now, before I make it sound too simple, there is cost and sweat equity involved. You will be sore. And there will be days when you wonder if it will ever be done (spoiler alert: As a homeowner, improvements are never done. As soon as you finish “all” the projects, it is time to start over).
Before starting your search, you will want to see if you qualify for a home renovation loan. It is basically a mortgage with a line of credit to cover the costs of remodeling. Or, perhaps you can purchase your house in cash and use cash or credit to cover the improvements.
You will also want to take an objective look at your skills. The more you can do yourself, the less expensive the total loan will be. Do you have plumbing, electrical, carpentry, flooring, or sheetrock skills? How quickly can you pick up a new skill from youtube? Do you have friends or family who have any of these skills and would be willing to help you out?
If you have to hire a professional, make sure they have insurance and real references. There is nothing more expensive than having to pay a contractor to do a job and having them to a sub-par job or taking your money and disappearing.
In this market, the demand for contractors is high. If you find someone able to start right away, there may be a reason. Do you due diligence to ensure you are working with a reputable professional. You may be able to get some references from your neighbors, local chamber of commerce or hardware stores.
Once you start your search you will want to make sure the basic bones of the house are good. That means the foundation has to be solid and nothing is so far out of plumb that it is at risk of collapse. For example, there are some beautiful old homes in Syracuse, NY, with 3K+ square feet, selling for $5K-$10K, but some are leaning so much I would be afraid to enter. They need everything replaced from the foundation up replaced and that would cost far more than the house would be worth. Although, if you planned on making it your forever home, that might not be an issue.
When determining how much it will cost to upgrade your potential home, make sure you factor in at least 10-20% more for unforeseen issues. A more realistic figure may be to double the cost and triple the time. When working with an older home you never know what you might find behind a wall!
You may find that a fixer upper is a good starting home that you can sell in a few years and bootstrap your way to a house or location that is more to your liking. There are plenty of people who do this. Some turn it into a business.
With any luck you will be able to live in one part of the house while you fix up the rest. If not, be sure to budget in additional living expenses until you can move into at least one room of your new house.
You will need a certificate of occupancy before you can move into the house. If your potential new home has had the certificate of occupancy revoked, check with the building inspector or codes enforcer to find out what needs to be done to qualify for a new certificate of occupancy. It may just be that the utilities were turned off or it could uncover something far more fatal like termites or structural issues. At the very least you will need heat, electricity, water, a cooking surface, and a bathroom before you can occupy the house. Your local codes enforcer can tell you the requirements for your area.
Get to know the team at your Town office. They are the ones who will be helping you with permits and inspections. Read the codes and ask questions if you are unsure about anything. Not obtaining a permit could result in additional fees or even having to tear down what you did and start over.
Be patient, but be ready to move. While these homes are available, they are showing up on the market less frequently. There are plenty of large companies and investors going through towns and buying properties in bulk without even looking at them. Having everything in order will help your offer be accepted.
Have a great realtor. I once heard there are average realtors and there are great realtors. You want a realtor who has the resources to send you any listings that match your search criteria as soon as the property becomes available. Allow for your search to be a little more open than what you really want. It is easier for you to reject a listing than to miss out on something that would work.
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And, if you want to take a deep dive into these topics with a ton of 1:1 and group support, email me about the Money Mom Academy. This program is for women who want to create a better life for their families, create generational wealth, and pass their knowledge on to their children so their heirs can benefit from their legacy. There is no expiration date so you can learn at your own pace and learn as much or as little as you want about each topic.