My husband and I are in our mid 60’s. Granted, 27 years ago housing costs were lower, but we bought crappy houses, a bit under market value and lived in them while we fixed them up. Do younger people still have an interest in doing this? We had combined 3 kids from previous marriages, and we put them to work also, pulling out old baseboards and moldings, helping to paint. We did this after work and on weekends. All three of our kids bought fixer uppers and have spent years working on them. Ages 35, 45 and 46. Are they a rare breed? I will admit it’s difficult to buy a home in today market with the rising prices and high interest rates. Just curious.
Posted by curly_spy
9 Comments
Sure it happens, but lots of times they get outbid with cash from professional flippers.
We are doing this. But we’re in a HCOL area, so we got a condo. It had lots of leaky pipes and mold, so we got 10k in closing costs plus mold remediation covered. Then laid all our tile, drywall, plumbing. The only things we hired professionals for was washer/dryer hookups and electrical work. Instead of selling it, we’re renting our condo out for a couple hundred over our expenses. Just enough to cover repairs, and hopefully one day we can give it to our son since it is really close to our state university.
Now we’re buying an even more of a fixer upper, but it is a SFD with a huge yard and quiet street that is walkable to the park for our son.
We make enough to buy a house because of a VA loan. But not enough to get a move in ready home. 😅
pretty much anything that’s a fixer upper in a desirable market is going to have tons of buyers with cash in hand
There seems to be an issue with people wanting to work with their hands like years back.
Although there seems to be a rebound.
But the bigger problem is the “institutional/pro flippers” and the huge volume of wannabe flippers/investors.
Not knocking regular people wanting to be flippers, just that there are too many people trying to get rich off the same “scheme”, so they mess up the valuations.
The value now is mostly in the land, not the house. The condition of the house does not greatly affect the sales price where I live. So there isn’t very much opportunity to build sweat equity. You are just buying the land the house sits on and speculating on the land value.
Additionally, with the high prices, interest rates, and rising age of first-time home ownership, many of us are finally qualifying for mortgages at the same time we are paying $3000 per month for daycare. In a market where we have to waive financing contingency to buy the house, we are not left with time or money for repairs.
I’ve been searching for a 1000sqft row home for 3 years now, and I keep getting outbid by over 10% of list price.
I know a couple and one guy who did this. They stopped because the prices for even crappy fixer upper homes were asking way too much for what they could turn around and sell for after a couple years of sweat equity. And the fact that the fixer uppers were in such horrible conditions and not worth the price at all – I heard one horror story about them seeing mushrooms growing in the bathroom at one potential fixer upper, and we don’t live in an area where that’s common (mean there’s definitely worse and more expensive problems behind the mushroom growth).
We exist but probably are rare. Was arguably one of the reasons I was able to buy my first house in my 30’s in a hot market. Place needed work, not in a bad way, but it needed new windows and was loaded with 70’s era interior doors, ceiling tiles, fake wood paneling, etc. It helped that I have a ton of tools.
Lending standards are quite a bit stricter than years ago. Now, lenders will not allow much – if any – repairs needed. You need to find houses with only cosmetic updates needed. Anything actually broken means you can’t get a loan and need to pay cash. You can do a rehab loan, but you can’t DIY repairs on a rehab loan. So it’s harder to find a situation like this.
In addition, in many areas older houses in poor condition aren’t worth fixing up, so they are purchased by developers, knocked down, and something modern built. This starts to happen when houses are maybe 40 years old, or older, but in good central popular areas where the city has built up around them. People now want wide hallways, tall ceilings, open floor plans, big bathrooms etc.
So that also reduces the supply of the kind of house you are talking about.
I think young people today who are not interested in college should learn a trade. Boomers are going to leave an unprecedented quantity of older dilapidated homes over the next 30 years. Contractors and trades people are already super busy, and it’s hard to find a good one. That is only going to get worse if young people don’t go into the trades.
Yes , they are a rare breed from exceptional parents