You are new to the fixer-upper side of the real estate market, but can appreciate that restoring a diamond in the rough could be a lucrative prospect. As home prices tend to improve, since the smoke has been clearing from the 2008 housing market crash, you may be thinking that now is the time to put your money and your carpentry skills to good use; however, without any real world experience in bird dogging houses for the right opportunity, you may find it difficult to know which house would be the right opportunity to jump on. The following are a few tips that will help you to know if you found a good fixer-upper or if you are staring down a money pit in the making.
A Cracked Foundation
A home is generally only as good as its foundation. If the foundation of the houses you have been analyzing for purchase tend to show serious cracks, then chances are these are homes you want to avoid. A foundation with visible cracks can be a sign of a far more extensive foundation problem. This is especially the case if the interior of the house shows signs of cracked floors and cracked walls near the base as well. In some areas, this can even signify that the home is resting on a sinkhole, and that would be a messy purchase that you would never want to be stuck acquiring.
Another issue to watch out for is black mold formation in houses—especially in damp areas of a home such as a basement. Depending on the extent of the black mold formation, this can signify poor drainage. It can also point out that extensive replacement of interior walls are necessary for removing this common health compromising agent. On the other hand, a home that seems relatively free of black mold could just so happen to be that diamond in the rough you are looking for to purchase. Such a situation would suggest that the home is well ventilated and that there are likely no major flooding or drainage issues with which to contend.
A Lead on a Newer Construction
Sometimes you can find a fixer-upper that is a newer construction. Such a home will tend to have less hidden problems than an older home that has had time to experience structural aging and decay. If a newer construction is being sold for well below its estimated market value, then it may be the diamond in the rough you are in search of purchasing. In such a case, it will be worth questioning the owner to find out why they are so eager to part with their home. One homeowner’s financial concerns may be your lucky break. In such a situation, it never hurts to have the home inspected by a professional to make sure the situation is truly what it appears to be, not a home riddled with problems.
When a Realtor Can Help
From placing addendum on a purchase contract to helping you run comparables on the local market, a competent realtor can often be a valuable source to aid you in your search for the right fixer-upper investment or project home. If that realtor has a background in knowing what investors are looking for in a local market, they might even be able to help you to assess a home’s investment value to further ensure that you are purchasing a property with a lot of upside resale potential.
The house market is filled with an endless variety of amazing finds that are often peddled as fixer-uppers and handyman specials. As you begin to develop an eye for determining which ones are the best bang for your buck, you will have a near endless supply of money making opportunities at your fingertips. Sometimes all that it takes to snatch up the right fixer-upper for your needs is to have the motivation to look at the homes in your local market and to have a strategy for turning that diamond in the rough into a living space you or some eager buyer will be happy to call their home.