Ooops…One thing you don’t want to hear yourself saying after you purchased that fixer upper you were thinking was going to be your big money boon. I worked in the construction business for about 10 years, and still do many construction activities around my house and friends houses. During this time I have seen people lose their shirts buying the wrong properties, and I have seen a few make large chunks of money from good purchases. I have never been a house flipper, someday I may be but until then I will keep a watchful eye out for what I should and should not do. In my experiences I worked many times hand in hand with successful house flippers and some not so successful.

The whole point of purchasing a house in bad condition is to save money in some way, either to make it later or just to get a house you could not afford if it were in any other condition. There is some simple math that goes along with purchasing a house to fix I will start with some easy examples that can be used later in this post. First consider the houses in the area you will be purchasing in, for example: This house just one block from the house is $220,000 at 1500 square feet and one mile away is $300,000 for 1400 square feet – - the house you are looking at is $150,000 and is 1400 sq. ft. this is $107 per square foot, in the neighborhood of $40 – $70 dollars less per square foot than houses in the general area (check more than two houses, it is best to check the prices that the houses have sold at and not what they are selling for, this information can be attained from a real estate agent). This is a good price if and only if you are going to spend less that $40 – $70 per square foot to fix it up. Well that’s obvious, but what do you do with this information?

Here are some things to consider when looking at that fixer upper that may help you with your decision.

BUY, BUY, BUY:
1. The house has a case of the ‘Uglies’ - the house is structurally sound, but it looks like disco hell gone bad. This means that the kitchen looks like it belongs in ‘Leave it to Beaver’, or maybe the bathrooms have pink tile in them, or shag carpet throughout long enough to trip you, or it has a bad paint job (only paint, lead paint not included). These items are all easily fixable, if you can do them yourself then this is a good way to make money off your purchase. Of course make sure you are not fixing so many things that it adds up past the houses in the neighborhood.

2. Ugly yard – Very typical problem, but easy to fix if you are handy with a rake, shovel, and chainsaw. This house is also structurally sound just buried in a jungle of mismanaged outside organic growth. Remember when you are looking at a mismanaged yard, the inside of the house is most likely in a little disrepair also. This like everything else make sure you are spending less money then the cost of the local houses.

3. Temporary Hauntings – Occasionally you will run into the ‘haunted’ house, do a double check and make sure that the hauntings are not from something in the house…like loose plumbing, drafty windows, strange interior lighting, etc. There are many things that the superstitious will blame on ghost that are not, and at times easy to fix.
If there are obvious, easy fixes that you can complete to do your own ghost busting then go ahead and purchase the house. If there is nothing obvious and the house has a reputation, well I just have to say that if you are not into the ghost thing then do not buy it (they are difficult to sell on the whim).

Things You May Want To Avoid
1. Large amounts of wood rot – wood rot is a little like house cancer, if you have a little and its isolated its an easy fix, a large patch of wood rot usually means that there is some other problem and that there is probably double the damage hidden that you cannot see.

2. Termites are active in several places – yum yum…this house has been someones favorite treat. Termites can get into all kinds of places you wouldn’t want them. If you see wood damage, its a little like seeing the tip of an iceberg. Estimating damage is very difficult because you generally cannot see the extent of it until the wall is open. I have worked on several termite repairs that started out as $1000 jobs and ended up in the $30,000 range (very typical in the south).

3. Large amounts of chipped lead paint and exposed asbestos – This is an easy one. Removing either of these substances is dangerous for your health at best, and costly if you get someone else to do it. note** Covered lead paint is ok if it is not chipping and pealing, and well covered asbestos is ok as long as it is not in a place that it cannot be covered. Lead is dangerous when children are around and can put chips in their mouths. Asbestos is dangerous when it can flake off into open air, the little asbestos fibers float in the air and get lodged in your lungs.

Other Things To Consider

Sometimes a house is structurally stable and only has little repairs but there are so many little repairs that they outweigh the money that you may make on the house. This oops is belongs to me right now:), the house that I live in is structurally sound, but full of little projects that add up to more than I would have ever wanted to spend when I originally purchased the house.

Now that you are kind of getting the idea, just remember one thing, buy the house (fixer upper) if it is going to save you money or make you money. This is very difficult to determine at times but hopefully I have mentioned some obvious things that will help you in the future. One thing I do recommend is getting a house inspection from a licensed home inspector before you buy anything, they usually have a list of things to look for that will save you that oops moment.

Thank you for reading…this post is probably going to grow as I think of more things and have more time so keep this one with you.

Luke Spencer

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