What is a "Fixer-Upper"?
You may be asking, "What is my house worth?" "Is it time to sell my house?" "Can I sell my house fast?" First, ask yourself, "Is my house a fixer-upper?" Personally, I have seen quite a few fixers in my career flipping houses.
We buy houses that require vast amounts of work, effort and money to repair. And not all of them would go into the same category. We buy houses like this because they are typically sold at a discount. Someone is going to have to put in a lot of sweat equity and give the house a lot of TLC to bring it back.
I would say there are 3 different categories in which a house will fall into. So, when it's time to sell your house, first see what category your house falls into.
Cosmetic or Handyman Special
First there's the cosmetic remodel or what I like to call the "handyman special". A house for sale like this typically needs the least amount of TLC. Most likely, we are talking new paint, carpet, countertops, lighting, landscaping and some appliances to give the property a nice facelift. As a seller, you may say, "If I do this myself I can sell my home fast." And you would be right.
Next, you have the major remodel. It may be a diamond in the rough, it may be an ugly house for sale. There may be things that are wrong with it, such as the layout. But, for a professional like me, this type of house is really an extensive remodeling job.
Sometimes it is hard for people to see the beauty within an ugly house. We buy ugly houses all the time and I love the challenge. To me these can be some of the most amazing projects to work on, but they are not for the lighthearted or underfunded. Typically, a major fixer has "great bones". It may have been a very special house when it was first constructed, but over time repairs have not been made, so it has fallen into major disrepair.
Sometimes a house just doesn't have curb appeal. That's when you need to look at how to change the appearance of the house without rebuilding a completely new house. That takes a lot of creativity, and possibly means calling in some professionals to help with that. Concentrating your efforts on the kitchen, which can also be the biggest source of remodeling expenses, can also be in the area where you turn the house around. Highlighting and focusing on a new kitchen can be a homebuyers dream come true.
Sometimes it's not the way the house looks, but the way the house smells. Whether it's pets or smoking or an unattended water leak that has turned into mold. This can turn-off even the most eager of buyers who want to fix-up the property themselves.
Lastly, leaks in the roof, stains on the ceiling, flooring that is curling up, all these things signal water damage. And this can scare off just about anybody. After all, a potential buyer will never know how long and to what extent the damage will be. There are steps to buying a house like this if you haven't remodeled before, so make sure you proceed with caution.
Last, but not least, we have the teardown. These are usually vacant houses for sale. I can only think of two houses out of thousands that I have seen that I would call a true teardown. One had severe foundation damage to the point that there was a 1 inch step up in the same room where the concrete had cracked and raised. That type of damage occurred throughout the whole house. However, I have bought properties that had foundation problems, even very severe ones, but they were fixable, expensive but fixable.
The other house had black mold on every single wall in the entire house and had things growing on the outside of the house that I have never ever seen before in my life. My eyes burned, my throat was on fire and I felt sick after walking through that house. I should have left right away after seeing all of that. The sad thing is, someone was living in the house. The owner was kind and had lit incense to mask the smell during the walkthrough. I don't think he could smell how bad it was anymore. Looking back, I wonder how much his health suffered from living there. Bottom line, it is hard to sell house with mold.
So for me, even potential teardowns are salvageable. This is a big deal and really effects the home value. Is it lot value or is there still value in the building? For most people when there are broken bones that cannot be fixed, it is not a wise investment to buy the house. I buy houses with all of these issues:
- structural problems
- major shifting that requires foundation work
- drainage issues
- flooding in the basement
- illegal room additions that were not built to code and without permits
- major earthquake, fire, and flood damage
- unstable hillsides that cause soil erosion
- asbestos issues
- mold issues that were very severe
Buying fixer-uppers can be a great business, but they can also be absolute nightmares. That is why selling your home to an investor can be a great idea. Especially, if you want cash now. I know what I'm getting into when I buy a house and I know to expect surprises as well. When you sell your house for cash, you get the freedom of knowing that you have sold the property to a professional and that you have no liability going forward.