Buying a house

[Rwy]

On a budget lets say


Do you go fixer upper or turn key everything is ready



I am leaning more towards a fixer upper. I am not handy (never needed to be) but I am very capable when ever I put my mind to anything. I realize lots of things are out of reach for beginners but basics I would try.

My fiancee cant seem to see anything unless its 5 feet in front of her. She can never see the big picture and its a little frustrating for me

[spywizard]

although currently in many markets home prices are approaching 2005 levels... but town homes are still available in many areas that can be had on a short sale.. if you can find one like that, you can save big $$$

[spywizard]

even the reo market has dried up significantly, the banks are now asking for near retail value again..

[austinite]

Depends on how long you plan on staying there, and how much time and money you can afford to spend on it.

Fixer uppers rarely break even, generally one of 2 things:

1. Great investment if you put in the effort and get it cleaned up.
2. Total disaster if you underestimated the project and/or found serious underlying issues.

So just be cautious, come up with a realistic budget for repairs and then add another 20 grand to that. With fixer uppers, it's always wise to seek a 3rd party's professional opinion to check for foundation and other serious issues.

[austinite]

even the reo market has dried up significantly, the banks are now asking for near retail value again..

Yeah ,forget the monster banks. Always go with a local credit union.

[Rwy]

These people are out of their minds with what they are asking. Once rates start going back up the market will be smashed again IMO.

[Rwy]

although currently in many markets home prices are approaching 2005 levels... but town homes are still available in many areas that can be had on a short sale.. if you can find one like that, you can save big $$$

This is a great idea but not in NY. We have mortgage tax in NY. So a 500k townhouse is going to run you 10k in tax on the closing alone not including everything else and we also have the highest title insurance premiums in the US. Then 5% to the realtor if you decide to sell in 5 years along with transfer tax. Along with paying mostly interest the first 10 years.

[Lunk1]

Rates have climbed but are still very low. Now is a good time to buy IF you have the 20% down that most banks are unfortunately requiring. When buying, consider that the first time average home owner lives in a house 7 years before re-selling.

I will say from experience (being a not very handy guy) that fixer uppers suck. I will never buy another one. It seems as if you never get done "fixing".

[spywizard]

well, in minnesota we have a 95% rental occupancy... and the typical 225K 3bd/2ba in a suburb is renting for $2000-2400 per month which is a typical $600-800 positive cash flow...

worried about them trashing the place?? $120 year you can get $100,000 policy for damage caused by with a $200 deductible..

It's good times for now..

[lovbyts]

I'm sort of in the same boat and have been looking/researching for about 3 months now.

There are some good prices out there still on turn key but you have to keep looking and dont get disappointed about the ones you miss.

Make sure to set your budget before you get a loan. I could have easily qualified for another 100K but put my limit at 350K.

Short sales can be a PITA but if you have the time they are worth it. I put an offer on one that was accepted last week and am in the 21 day process now before I know if it's mine. Fingers crossed.

Dont jump on the first thing you find that will work for what you want. I almost did a few times but after a while I decided to wait until I found one that really did scream out at me. The one I choose is 700sq ft larger than what I had originally considered (3200 sq ft) but has a smaller (almost non existent) back yard but it will work for what I need.

Have you considered trying to save or come up with the cash to put 20% down? That will save you PMI private mortgage insurance that = at least $200 month that does YOU no good, it all goes to the bank.

What sucks is with mine although it's a turn key I still plan on dumping at least 20K into it before moving it to make some changes..

Good luck with your search and keep us posted.

[Lunk1]

well, in minnesota we have a 95% rental occupancy... and the typical 225K 3bd/2ba in a suburb is renting for $2000-2400 per month which is a typical $600-800 positive cash flow...

worried about them trashing the place?? $120 year you can get $100,000 policy for damage caused by with a $200 deductible..

It's good times for now..

You must be around Minneapolis then...

[tdoe11]

Buy a house ready to move into and something that has minimal upgrades/repairs needed. Life makes us real busy sometimes and its hard to get to fixing things. Just my .02. Good luck bro

[noon]

I live in ny and have done both .i have bought at auction fixer uppers for 50 K
And cleaned them up as good as new construction with all the trimming.
No matter what you decide get an inspection by a reputable company.it will let you know the flaws in the home . You can use the information gained to get the seller to lower the asking price.
Also if you have kids. Spring for the soil test.

[Rwy]

Rates have climbed but are still very low. Now is a good time to buy IF you have the 20% down that most banks are unfortunately requiring. When buying, consider that the first time average home owner lives in a house 7 years before re-selling.

I will say from experience (being a not very handy guy) that fixer uppers suck. I will never buy another one. It seems as if you never get done "fixing".

A lot of people in NY are doing 5% or 3.5% FHA down...with mortgage insurance. Rates are still low but last week there has been some pretty big jumps. ONce the fed stops propping up the market with the bonds they are buying rates are going to get hit. I think we are going to see 5.5-6% very soon

[Rwy]

We are going to sign a two year lease ay my place in the city. Shoot me but this way we can put aside more money and wait for house prices to come down once rates go back up.

[Lunk1]

A lot of people in NY are doing 5% or 3.5% FHA down...with mortgage insurance. Rates are still low but last week there has been some pretty big jumps. ONce the fed stops propping up the market with the bonds they are buying rates are going to get hit. I think we are going to see 5.5-6% very soon

That's still a low rate. Have you looked into FHA? Seemed like a big PITA when I bought my home in 2000 and I will try like hell to avoid giving $ away again by paying mortgage insurance

[Rwy]

I have been doing mortgages for 10 years the last 5 I have been doing reverse. 5.5-6% in hindsight is def low but not for a recovery. It will prevent alot of people on the fence from qualfying unless banks loosen up programs.


FHA now has a life time PMI payment. FHA is going to need a huge bailout soon so they are trying to milk money form every loan that comes in. Thats why so many people are doing conventional with 5% down until below 80% owed

[bringndaheat]

U said fiancé right!? Thn go for the fixer upper as long you can do a conventional conforming loan. If u can't put down 20% then u can do a 80/15/5 or a 80/10/10. These r loans wth two liens and get u out of mortgage insurance. U should b able to get a conventional conforming loan up to 95 % wth a credit score as low as 660 as your median score.
The reason I say fixer upper is it will give u both something to do besides finding eachothers flaws! Paint is the key to a fixer uppe. A good paint job will fix many flaws. Have fun ths is one of the best times n the history of th United States to buy a home. Wth rental prices out of control and rates still hovering around historic lows its the perfect storm. Buy now rates r going up as the Fed is going to stop buying mortgage backed securities. Again good luck and happy hunting!

[Blankinator]

Yeah ,forget the monster banks. Always go with a local credit union.

Yeah...^^^^...this.

[Sgt. Hartman]

These people are out of their minds with what they are asking. Once rates start going back up the market will be smashed again IMO.

Exactly, once rates go back up and the massive inflation sets in from printing all this money we'll be right back where we were a few years ago.

If you don't have construction/remodeling experience or have some connections in that field just buy something move in ready. It's not worth the headaches IMO.

But since you prob won't take that advise at least take this. Don't move in until the house is a finished product and the way you want it to be when you sell it. Too many people make the mistake if saying oh once I move in I'll have so much more time to complete all these projects. But not only will you not feel like doing that bs in your spare time but every project becomes much more difficult and a pita when you trying to work in a furnished functional lived in house. Even if you have to sub out more of the work than you'd like, get it done prior to move in or it will never be the way you want it and you'll end up reselling it again as a fixer upper lol.

[Rwy]

Exactly, once rates go back up and the massive inflation sets in from printing all this money we'll be right back where we were a few years ago.

If you don't have construction/remodeling experience or have some connections in that field just buy something move in ready. It's not worth the headaches IMO.

But since you prob won't take that advise at least take this. Don't move in until the house is a finished product and the way you want it to be when you sell it. Too many people make the mistake if saying oh once I move in I'll have so much more time to complete all these projects. But not only will you not feel like doing that bs in your spare time but every project becomes much more difficult and a pita when you trying to work in a furnished functional lived in house. Even if you have to sub out more of the work than you'd like, get it done prior to move in or it will never be the way you want it and you'll end up reselling it again as a fixer upper lol.

Thanks for the advice. I dont think I would go further than sheet rock, painting, molding simple and basic stuff.


I would love to buy my parents house but they dont want to move for awhile. After todays market reaction to Bernanke speaking about easing off the bond purchasing I think we are best renting something cheap and saving money.

I hate to seem negative but I think its really going to be a matter of time before people start rioting becuase we are in for a serious tax increase.

[bringndaheat]

^^^being a banker i don't understand tht thought process. If u have high taxes u need the mortgage so can write off the Interest payments. In the 80's interest rates were n the teens and people still bought. People have become numb to historically low rates. Rich people and middle class people own their home. Poor people rent! This is a simple fact. If u wait u will be kicking urself wondering why u didn't buy. Home prices r only going up fact ! Cost of labor, equipment and materials are going up=higher home prices. Meaning whn prices go up u have more equity which is money. I love renters they live in my properties!

[Sgt. Hartman]

You couldn't be more wrong bud. The only reasons the housing market is recovering (artificially that is) is because interest rates are being held low and they've been buying so many bonds which is about to stop according to Bernake yesterday. When this happens rates will skyrocket and inflation will be massive crushing the housing market once again.

Basically the fed govt been artificially propping up the market temporarily but it can only go on for so long. And it's about to come to an end.

[canesfan804]

I have bought 3 fixer uppers and did pretty well off all 3. Sold 2 for about a $100k profit and the 3rd is currently a rental. I am in the process of buying a turn key due to tie restraints for my apt lease ending. Moved far away from home a year ago and had to get a apt. We are also in the process of another fixxer upper/ rental unit.

I wouldnt reccomend the project if you are not a handy man. Things like plumbing and electrical work can be VERY EXPENSIVE and then you end up not having the $$$ to finish the project. If you do go for it tho I would be sure you have enough to pay for 2xs what you expect to because without good connections it will be expensive. Good luck either way.

[DSM4Life]

If you don't have the know-how on doing these types of repairs yourself then I would pass on the fixer upper.

[Rwy]

The dollar got a little stronger so hopefully I wont get banged over the head on my trip to spain this year

[Rwy]

I have bought 3 fixer uppers and did pretty well off all 3. Sold 2 for about a $100k profit and the 3rd is currently a rental. I am in the process of buying a turn key due to tie restraints for my apt lease ending. Moved far away from home a year ago and had to get a apt. We are also in the process of another fixxer upper/ rental unit.

I wouldnt reccomend the project if you are not a handy man. Things like plumbing and electrical work can be VERY EXPENSIVE and then you end up not having the $$$ to finish the project. If you do go for it tho I would be sure you have enough to pay for 2xs what you expect to because without good connections it will be expensive. Good luck either way.

I think a house that needs to be modernized my be more my speed! Just the basic stuff

[Rwy]

^^^being a banker i don't understand tht thought process. If u have high taxes u need the mortgage so can write off the Interest payments. In the 80's interest rates were n the teens and people still bought. People have become numb to historically low rates. Rich people and middle class people own their home. Poor people rent! This is a simple fact. If u wait u will be kicking urself wondering why u didn't buy. Home prices r only going up fact ! Cost of labor, equipment and materials are going up=higher home prices. Meaning whn prices go up u have more equity which is money. I love renters they live in my properties!

I get the thought that rent is a waste of money. I have a side business also so I can write off a portion of the rent and utilities.I disagree with your thought process. I live in NYC. Millionaires rent. You cannot compare Texas to where I live.


I am not going to over pay for a house because the payment is more affordable. However this might make sense for a lot of people who wont have the income to get into a house with the higher rates. I would rather pay 6% on a loan with a 100k less in a purchase price. I would then pay down the loan aggressively so that the total interest for the duration of the loan is much less than 6%...

You cannot do that on a higher purchase price.

[bringndaheat]

^^^^i agree wth most things u said. It's great u have stuff u write off. But of course everyone is different. I do agree NY is waaaayyy different thn Dallas or any other city in the US for tht matter.
As for my thought process it's completely correct! All ths talk about the fed and yada yada yada don't truly understand Wall Street and the way money works. All those people who bought in 2007 wth inflated home values supposedly got bad loans. Well they are now all selling there home and upgrading because they got a shiat ton of equity. I've been a banker for 15 years bought and sold mortgage companies. Also I own several rental properties. A person must take some risk to get reward! Thts like telling people not to buy stock because u can lose money. Crazy! The trick is to educate urself and make an informed choice! So the reward out weighs the risk. Yes easier said thn done but in today's market wth historic low rates, cheaper cost of goods and labor... Well ur have to really screw up to not make money. Best advice I can give. Buy the smallest home in best neighborhood u can afford. Ur homes comps will always be greater ths way.

[spywizard]

I'm buying up income properties in Florida... it's been a very good 2 years.. positive cash flow is always good..

[bringndaheat]

^^^my company headquarters r in FL. Unreal deals over there! Positive cash flow while building equity and having tax write offs. One thing I've learned whn buying property... Own some cause God's not making more land!!

[Rwy]

^^^^i agree wth most things u said. It's great u have stuff u write off. But of course everyone is different. I do agree NY is waaaayyy different thn Dallas or any other city in the US for tht matter.
As for my thought process it's completely correct! All ths talk about the fed and yada yada yada don't truly understand Wall Street and the way money works. All those people who bought in 2007 wth inflated home values supposedly got bad loans. Well they are now all selling there home and upgrading because they got a shiat ton of equity. I've been a banker for 15 years bought and sold mortgage companies. Also I own several rental properties. A person must take some risk to get reward! Thts like telling people not to buy stock because u can lose money. Crazy! The trick is to educate urself and make an informed choice! So the reward out weighs the risk. Yes easier said thn done but in today's market wth historic low rates, cheaper cost of goods and labor... Well ur have to really screw up to not make money. Best advice I can give. Buy the smallest home in best neighborhood u can afford. Ur homes comps will always be greater ths way.

Every purchase I did for a borrower from 06-08 is upside down or barely has equity in it.

Texas has had a decent economy the past couple of years compared to the rest and the government is very protective of their people. Tough tough state to do loans in. I would be a lot of bad loans were not done in Texas compared to other states....

[Oliver47]

I know the normal process is you hire a realtor, that person tries to finds houses for you, takes you around, etc. However, I have found a home I want to buy - now I am in the process of contacting a realtor. I don't want to do the paperwork myself, I want a professional. However, I'm thinking that the realtor should give me a bit of a break on commission fees, since he didn't have to do any "leg work" for me. Does that make sense?

If this happens at all, do realtors lower their fees? Is that heard of? (I have no clue about this..) Maybe lower the commission by 1% of whatever is normal? What would an acceptable % of commission be for something like that? If you are a realtor - would you do that for a client?

Any thoughts would be appreciated, thank you for any help

[krugerr]

I know the normal process is you hire a realtor, that person tries to finds houses for you, takes you around, etc. However, I have found a home I want to buy - now I am in the process of contacting a realtor. I don't want to do the paperwork myself, I want a professional. However, I'm thinking that the realtor should give me a bit of a break on commission fees, since he didn't have to do any "leg work" for me. Does that make sense?

If this happens at all, do realtors lower their fees? Is that heard of? (I have no clue about this..) Maybe lower the commission by 1% of whatever is normal? What would an acceptable % of commission be for something like that? If you are a realtor - would you do that for a client?

Any thoughts would be appreciated, thank you for any help

Hey Oliver. This thread is 7 years dead pal, might have been better to start a new one.

Whilst I am a mortgage broker, I am in the UK and have absolutely zero idea how you guys do it across the pond.

[Booz]

As Krugerr pointed out this is years old mate....
Open up a new thread.

[GearHeaded]

I know the normal process is you hire a realtor, that person tries to finds houses for you, takes you around, etc. However, I have found a home I want to buy - now I am in the process of contacting a realtor. I don't want to do the paperwork myself, I want a professional. However, I'm thinking that the realtor should give me a bit of a break on commission fees, since he didn't have to do any "leg work" for me. Does that make sense?

If this happens at all, do realtors lower their fees? Is that heard of? (I have no clue about this..) Maybe lower the commission by 1% of whatever is normal? What would an acceptable % of commission be for something like that? If you are a realtor - would you do that for a client?

Any thoughts would be appreciated, thank you for any help

dude, your the BUYER . you don't pay any commission fees lol . only the seller pays