1. First Consider Home Financing
If you want to buyer a major fixer, you won't be able to obtain conventional financing. You'll need to buy with all cash, hard money, or a renovation home loan. Cosmetic fixers can usually be financed through conventional lenders, however the house will need working heat and plumbing and have no major glaring issues that an appraiser would red-flag.
2. Do you have Time to Remodel?
Don't believe the shows you watch on HGTV! We know first hand "reality" shows like "Fixer Upper" and "Property Brothers" are semi make-believe. Renovation takes a ton of time and there is no way around it! The planning and permit process is very time consuming, as is the construction phase if its done right. There is a building boom right now in Oakland and throughout the East Bay, so let's face it, good designers, architects and contractors are booked well in advance. Be prepared for the long haul if you want to buy a fixer upper... it isn't going to get done in two weeks like HGTV would have you believe!
3. Is your Lifestyle Fixer-Friendly?
This is a biggie. Is your work flexible? You'll need to meet with your designer and contractor during normal business hours, so if you think they'll meet with you on the weekend or after hours like your Realtor will, you'd be wrong. Did you have a new baby and plan to live in the construction? Not a good idea! Sure, you can ask the contractors to stop working during nap time, but you've just extended your renovation timeline and increased your costs. Are you getting married, switching careers, or have other stressful life situations? Then you might want to wait until things calm down in your life before buying a fixer upper. Renovation is stressful and why make things more difficult for yourself? Really evaluate your lifestyle and consider if the timing is right to tackle a fixer.
4. Property Resale and Return on Investment
Is this fixer your forever home or just for short-term? If you never plan on selling, then sure, go ahead and do what you want to make the house just right for you and only you. But if there is a chance you might want or need to sell in the future due to relocation, job loss, or down-sizing, then be careful about over-personalizing the property. It is important to know which upgrades and updates will give you the most bang for your buck when you list. It is also important to understand who your buyer might be and what they are looking for in a new home- and buyer's needs will be different in Berkeley vs. Lafayette for example, so make sure you consult with a professional who works in your neighborhood.
5. Renovation Budget and Concessions
Frankly, no budget is ever big enough when it comes to buying and renovating a fixer to live in. Renovation in The East Bay is extremely expensive. You'll need to make concessions- and possibly a lot of them- if you want to stay in budget. Decide ahead of time on your "must haves" and your "nice to haves" so you can better keep focus on the important things. Every decision you make when you renovate has a budget consequence, so before you proceed, decide what is more important to you- staying on budget, or getting exactly what you want.
If we haven't scared you off and you're still considering buying a fixer upper in Oakland, Berkeley, Lamorinda, Walnut Creek or other East Bay neighborhood, then we'd love to help! We also work with buyers to find turnkey, move-in-ready homes as well. Just contact us and let us know how The Home Co. can assist!