What should we look for when buying a fixer-upper house?

Question

My fiance and I are considering buying a fixer-upper house rather than an apartment when we get married.

Obviously things like location, neighbors etc. are important, but; what should we be looking for in terms of fixing it up ourselves? Neither of us have much DIY experience.

• What are the huge hidden expenses? Broken water heater? Bad foundation? I imagine fixing a bad foundation would take an enormous amount of time, money, and special tools. Time we have; the others we don't. Unfortunately, I don't even know how to tell if the foundation is bad.
• What things can we simply not do ourselves without having to take a ton of classes? Who would we call to do those things? Would we need to get it certified by the city if we want to sell it later (or even just live in it) - would we have to pay for that?
  I would be okay with reading books and taking reasonably short classes to save a bit of cash, if possible.
• What sort of things can we do with little experience and cash? Ex. tear-up and replace carpets, paint walls, etc. Of course I know it's going to cost some money, but I don't want to be spending $30k to fix up a house that cost us that much.
• What are the Gotchas the realtor might not mention?

Answer 1

Most of your questions are the same question, just asked in a different form.

Before you even start looking -- Before you even find a realtor -- Do your research on a good home inspector in your area. If you are looking at an old house, make SURE to tell the home inspection service that you want someone who knows about houses xxxx years old. Most inspectors of newer (1-40 years) houses think everything in an old house needs replacement and will give a bad review of everything. Then get references and talk to people he's worked for. If he's not willing to give you references, then move on. When you find an inspector, go with them to the house & follow them around. You will learn a lot more than what will be written on the report, whether you buy the house or not.

Generally, you've got to look at the following areas:

1. Structure - Will it stand up
2. Membrane - Roof, cladding - Will it keep water out and heat in.
3. Foundation - is the basement dry? does it have cracks.
4. Electrical - Enough power, and properly wired.
5. Plumbing - Leaks and pressure.
6. Heating - Primarily this is the age and type of the furnace.
7. Doors and Windows - These cost more than you think, so get an estimate before buying.

Essentially, you don't want to mess with 1 and 3 at all, and the remainder, you need a good estimate of the costs.

The next important detail is Architecture. Are the rooms of appropriate size or is the floor plan easily convertible to something you can live with and enjoy.

I haven't included cosmetics at all. Because this is where you are going to do it yourself.

Money you can't avoid:

1. Roofing - This needs to be replaced every 20 - 30 years. It can range from a re-shingling to a full wood and insulation replacement.
2. Furnace - Again, 20-30 year replacement.
3. Electrical - IF you're hunting for a bargain, you'll probably need electrical work. Most of it is easy and you can DIY if you know what you're doing. (lights and sockets, pulling wires if the drywall is off) Talk to the guy at Lowes or Home Depot for a good book for your area. Get an electrician in for stuff around the box.

Answer 2

Danny, I respect your enthusiasm. I am a certified home inspector and general contractor in Maine. There's some great advice in the answers here, and I won't repeat the obvious.

I will warn you, however, learn realtor language. "Fixer-upper" means a train wreck about to happen! Get a real good inspector that has building experience. DO NOT take a recommendation from your realtor for an inspector. Find a qualified builder/inspector. I have always felt inspectors that often work for realtors do not have the buyer's best interest in mind as problems found nix sales and rrealtors don't like that. I personally only work for buyers, never for realtors.

With all that said, renovations can add up fast. Roof $5,000-7,000, electrical or plumbing $85/hour, bathroom $6,000, kitchen $15,000-20,000, electrical service upgrade $2,500, windows $300 each, structural repairs, mold, insects, water damage, septic/sewer...

Unless you learn what to look for and are able to calculate the costs of repair or renovation before you buy, you are headed for stormy waters. The joy of home ownership will quickly turn into an unbearable nightmare.

You mentioned you didn't want to spend $30,000 on a house that you already spent that much on. Where in the world are you going to find a livable house for $30,000? If there is really such a thing, I will buy 10 of them tomorrow and rehab them myself and make a mint, even in this housing market.

I apologize for sounding a bit negative here, but rather be bluntly honest with you considering you admitted you have minimal skills and resources.

Answer 3

I think shirlock makes a good point. Particularly since the original poster mentions he does not have lots of DIY experience. There are many projects you can do on a house, but starting with one that is a "fixer upper" or "handyman special" is realtor code for "needs major work!". It will probably need so much work that even if you had time to do it, it will be really painful to try and live in the house at the same time.

I had not done much home improvement before I bought a house 5 years ago so I bought a "move in ready" house. The house was over 80 years old and I knew a few rooms could be improved but it was very livable and certainly not a "fixer upper". Over the years I have refinished the floors, finished a walk-up attic (structure, electrical, insulation, drywall, paint), installed showers/sinks/toilets, and many other small projects. Basically my point is that you don't need to start with a train wreck to have lots of stuff to work on.

If you really want to put in the work, look for a house that is "outdated" or just a couple rooms that need big changes. This will give you an opportunity to really improve the house and increase its value without getting yourself in over your head.

Answer 4

This doesn't really answer your question; but I wanted to mention it. I was in your situation about four years ago. My wife and I wanted a house, but money was tight....we looked at some bank owned foreclosures and found one that was in a good area for a good price. It was kind of a dump though....

We figured one year and 10k and we'd be done, with a great house we loved. Three years and 25k later we finished.

We sold the house, and made some money....but if you include the time I spent working on the house; I would have made SIGNIFICANTLY MORE working at McDonald's.

I'm not a religious man, but I can't imagine hell being much worse. It was fun in the beginning....but the thrill quickly wore off. 25k over three years works out to about $700 per month. Between that and my mortgage we were, quite literally, broke. For three years. We could have had a nice, finished house for the cost of the mortgage + half of that. But it's not just the money....it's the time. I can't really do justice to how overwhelming it was.

Maybe you have a better foundation than I do; but I literally couldn't hammer a nail when I started. The most basic of tasks took me many times longer than they should have.

It also put a strain on the marriage. We had no money, and no time. And, if you are already working full-time, tossing in another full-time project just doesn't work well.

I'm not saying there aren't people who do this stuff and even enjoy it. In the end, things worked out pretty good for us....the house was finished and even though we'd spent $25k and countless hours; we ended up with a nice ~50k check when we sold it.

I just wanted to offer a counter-point for you to consider.

Answer 5

To add some detail to chris's list:

1. Structure: check for sagging floors and anything out of level (floors, walls, doors). Check around any openings to see the materials used (from the outside, look for any protrusions like a faucet to see what's behind the siding, and from the inside, check the joists and rafters from any crawl space or attic).

2. Check for mildew, mold, and pest damage, particularly in the basement, attic, kitchen, and bathrooms.

3. Evaluate the materials for maintainability and durability. Brick will outlast wood or aluminum siding. Is the carpeting going to last 10 weeks or 10 years?

4. Note the downside of high ceilings, they are a pain to work on or fix. Ask yourself how you'll get a ladder to replace a light fixture or try to paint.

5. Check for safety. GFCI testers are cheap and easy to verify that kitchen, bath, and outdoor outlets are properly protected. Also note any large trees that can cut your home in two during a strong storm.

6. Regarding the chris's furnace comments, they also go for air conditioners.

7. Check the grading of the land. Does all water run away from the home? Do the gutters get it well away from the foundation?

Answer 6

On a side note:

Living in a house as you are fixing it up can be Very Stressful. Especially in the middle, where you've ripped it apart and haven't put it back together, but you still need to cook, clean, eat dinner, take showers, etc.

If you are fixing up cosmetic damage and/or have multiple bathrooms this may not be a huge problem. Worst case you can put a camp stove in the living room and make meals out there. But look for a house that you can live in while fixing it up. Otherwise you and your girlfriend may not be on the best of terms after a year...

If you don't have a lot of DIY experience, this is going to be doubly challenging. Everything will take 10x as long and 3x as many trips to the store as you think. You will break something horribly, and have to call in a professional, who will charge you 2x because he has to undo the damage you caused before fixing it correctly. Budget money, time, and brainspace for that.

Good luck! It's a lot of fun, and a lot of work!

Answer 7

To live in, or to flip? That question will result in two entirely different answers.

For a flip, you're looking for major cosmetic problems, with little-to-no structural problems. That'll give you the best bang for your buck.

To live in, I'd say the biggest thing to consider is location. Then from there how much you like the house.

One bit of advice that I wish I had had when we bought our first house is to hire 2 inspectors instead of just one. An inspector can catch a lot, but also miss a lot.

Answer 8

This isn't really a "fixer-upper" question, as every house needs work. Every home buyer should get a good inspection. Every home buyer should be prepared to deal with the responsibilities and burdens of repairs and ongoing maintenance.

However, if you want to do more than minor, occasional work:

1. Decide that you want to live in a house under construction.

   You will have areas of the house that don't function, tools everywhere, and lots of dust. Are you OK with that? For a long time?

   Consider living elsewhere while you do the work. Parent's basement, small apartment, RV in the driveway. Or live in one part of the house while working on another part.

2. Decide what work you want to do.

   Instead of asking what issues to avoid, decide which issues to accept. Anything else that a good inspector finds is either something to hire out, or a reason to reject the sale.

   Personally, I enjoy doing electrical work (like adding subpanels!), so I wouldn't mind if there are electrical issues.

3. Be realistic about how long it will take.

   If you're working full time, then your house project will only be in the marginal hours. You'll spend a lot of time learning, and a lot of time fixing your mistakes. As others have pointed out, you may be better off financially working for a paycheck and paying a pro to do the house work.

   The horror story I think of is the time my landlord replaced the roof, as described here: What projects should never be DIY?. Are you OK with that happening?

4. Seek professional help!

   Find a friendly builder who will guide you through the process. Maybe they'll spend a day each week on site with you, helping with tasks, giving advice.

   Also, if you have the humility to recognize when you're getting in over your head, you'll be better off than if you wait until things are really screwed up.

5. Be prepared for marital strain.

   People are emotionally attached to their homes. As newlyweds, you'll just be starting to figure out a new relationship (even if you've lived together for many years). The additional strain of living in a construction zone may be too much.

   If a child joins your family, you'll have almost no time to work on the house, and safety will be a concern. And parenthood triggers more deep emotional stuff around shelter, etc.

An alternative is to rent a small apartment (saving money & workload) and volunteer for Habitat for Humanity. You'll learn skills while contributing to your community. You'll also get to find out whether this kind of work really suits you.

My home is cheap because we decided to lower our standards - much, much lower. Now I get to putter around with home improvement projects at my own pace, watching our comfort gradually improve. Plus, I love learning new stuff.

Good luck, hope it works out for you.

Answer 9

My one lifesaving suggestion would be to rent HGTV's Holmes on Homes and Holmes Inspection, and watch as much as you can. Very applicable to U.S. and Canadian single family construction. Netflix has a couple of seasons, your library system may have some too, and if you have a DVR and cable (or a friend with one), you can record them off HGTV. I still do.

You'll be amazed at what mess people get themselves into. Absolute, unending mess, often costing on the order of $100k to fix, all sold with apparently clear conscience by the previous owner, mostly all cleared by idiot inspectors.

I've learned a whole lot from Mike Holmes and the people who work for him. I wouldn't be able to do all the work I had to do without that.

I've got a house that was inspected by an experienced guy with a degree in architecture from a Big 10 School. All it had for problems, supposedly, was being outdated. We've been spending about $10k/year on it for 2 years now, and here's what needed fixing:

1. New fireplace hearth extension. The original was incorrectly built in the entire subdivision and was structurally unsound. I had to design the rebar and pour the whole thing again, anchored into the fireplace foundation wall. Took 10 pcs of 10ft 1/2" rebar rods and almost 1600lb of concrete to do, all mixed with a trusty Sears corded drill in Homer buckets. Next time I'll rent a cement mixer. That hearth extension will probably cause someone a lot of grief when they'll be tearing down that subdivision in 50-100 years :)

2. Had to lift the ground floor and replace rim joist and baseplate. Some idiots built a deck that was resting on a 2x2 nailed to the rim joist with finish nails. It was pulling off and water was destroying the structure. Some 4x4 posts pulled from the deck and three bottle jacks did the lifting trick.

3. Reframe undersize balcony doors. The old ones were leaking, required 50+lbs of force to close shut, and were 6" short of a standard 72" opening width. Hint: custom-size doors cost more. Framing lumber and elbow grease: cheap, if you know what you're doing, that is.

4. Gut bathroom, including subfloor due to water damage/mold under a seeping toilet. Moisture was seeping up into the drywall, so the drywall had to go as well.

5. Death by a 1000 cuts: electrical fixes and upgrades everywhere. #14 wires on 20A breakers, overloaded circuits, one GFCI feeding the whole house's worth of protected outlets, no outlet on the front of the house, exposed cable runs on top of drywall, etc. Nothing really major, but a royal pain nevertheless.

6. Tear out said idiot built deck. There were 30 4x4 posts in the ground that we had to pull out. It took a whole weak with three people working just to get it out of there. Two 30 yard dumpsters just to haul it away, and I was stacking it there like it was a puzzle, with nary any unused volume left.

There has been a lot of other work done, too, but that wasn't really in the "need it done or else" category. Good things: no significant mold, no other major mistakes by the homebuilder, other than: whose *#!@$% idea is it to frame exterior walls in Ohio with 2x4s?! At least stagger them for a 2x6 wall and have continuous insulation...

Answer 10

Have some "walkaway" issues in mind: - foundation - water in the basement - big exterior projects like a deck falling down, or an abandoned swimming pool

Look for a good neighborhood, buy reasonable, but something that is liveable and fix the cosmetic things like paint and have new wood or carpert put in.

Answer 11

I am going to answer this from a purely economic point of view. I helped my dad flip houses while growing up, have worked on a team flipping and have redone my entire house.

People have mentioned foundation, plumbing, electrical, roof, whatever. It does not matter. It matters on your area of expertise and who you know. If you know a guy who does great foundation work for you at a huge discount then you have a competitive advantage. If you can do all of your plumbing and electric and the house needs that - that is where you make a lot of money. Most of plumbing and electric cost is labor - if you feel your time is free then this is a huge benefit.

So this is where the buying experience comes in. You inspect a home and find that it has foundation issues. (At least in the US/Canada) a seller must disclose this to every other buyer. Everything that is found during your inspection must be disclosed. So it isn't about what is wrong with the house, it is about getting the appropriate discount for the house based on the issue and it is about you as the buyer having an advantage (time/connections/system/materials) that allows you to fix the issues at a discounted rate.

If you don't have a "foundation guy" then yes the advise on other answers is right. I personally don't touch houses with foundation issues. But I did buy houses with termite damage because I had carpentry skills to fix the issues - and often the termite damage is not as bad as people think. I have got "termite infested" housing before, had it sprayed, replaced maybe 10 boards and everything was back to normal...

The next thing is comps. No use fixing up a house and buying the "fixer-upper" if you paid 90% of the high-end house price. Adding 10K of value to a 200K house is basically worthless when you look at buying and selling fees. Also are the upgrades/fixes done to a house going to provide a good return. You could totally redo the electric in a house (100 hours of work) in a bad neighborhood and have a return of 1K after materials - so $10 an hour... In a good neighborhood, house worth triple, that same 100 hours of work might have a return of 10K. Same with upgrades like granite, recessed lighting, or whatever.

The other things to think about are materials. Lumber, most plumbing supplies, most electrical supplies, paint, and stuff like that are much cheaper than the relative value they bring to the home. However if you spend $2000 on a furnace you will be lucky to get your money back. Granite/hard surfaced countertops are a given at some price ranges and regions and then for other price ranges they will get you a 50% return.

And if you are going to live in the house - make sure you have enough area to live while renovating. If every bedroom is used and all areas are used all the time, renovating will suck. Also if you are living in the house you might as well add on 30-50% to the amount of time to complete a task. You have to clean up all the time. Normally on a job site you can leave a certain amount of dust, clutter, tools, whatever... In your house you will be working 5 hours then cleaning 1-2 hours.

And that brings the last point. If climate allows, outside issues are a favorite. If there are landscaping issues, house needs to be painted caulked, trim needs to be fixed, and so on. Great house for a fixer-up to live in. Much less stressful to do the stuff outside and you don't have to deal with the cleanup. Also if living in a house you can actually keep some of the costs down - example is you don't buy sod, you buy grass seed because you have time to make sure the yard grows in.