Are your real estate clients looking for a good bet on a fixer upper? Are you?
Before we get into what to look for in a fixer upper, here are a couple of words to the wise…
Know that the housing market is changing…neighborhoods that were the hottest for investing last year may or may not be as hot today. Know that neighborhoods that are “on the cusp” may have already “bloomed.” (We’ve had several articles about this lately so make sure you read/reread them to freshen your memory and your wits.)
The market is changing…know that lending is tighter than its been. Know that skilled labor is in short supply. Know that materials keep rising, particularly materials that now have tariffs added on to their costs such as Canadian wood.
Know that everything that can go wrong will go wrong.
The market is changing…interest rates are rising and expected to rise even more in 2019. Think about first-time buyers and affordability even more because rising rates will automatically increase the price of the home you’re fixing to flip.
Now that those few asterisks are out of the way, here’s what experts have to say about looking for a good bet on a fixer upper:
Look for strong structural elements. Those elements include roofing; heating, ventilation and air conditioning; plumbing; electrical; foundation.
Mike Couglin of Summit Design and Building in Stoneham, MA said, “Look at the basement, attic and unfinished areas. The stuff behind the walls is what’s most important. As long as the bones are good, you can pretty much do anything.”
Look carefully at plumbing elements. Low water pressure is a quick fix; pipe replacement is a big fix.
Look for a sound, logical layout. Older homes are often divided into smaller rooms; today’s buyers want open floor plans. It’s expensive and time consuming to knock down walls.
Jean Brownhill, founder and CEO of Sweeten (a free service in NHYC and Philadelphia that matches renovation projects with contractors, said,”…no one wants to be stuck back in the kitchen when everyone else is hanging out…”
Look for infestations, mold, dry rot, asbestos, mice, termites, bats, squirrels, etc. Sellers are required to disclose all of these things but if the house was vacant or foreclosed upon, there is no seller. Inspectors are supposed to disclose these things but …experts suggest that you get a bid from a contractor to estimate resolution costs for these things.
Also look for water that wasn’t turned off properly if the house hasn’t been occupied for a while…pipes may have frozen, split and/or leak.
