If you’re in the market to purchase a fixer upper home, what criteria should you use to select one? While the concept of making a profit by fixing and turning over homes seems attractive, the outcome can be financially devastating if you select the wrong type of fixer-upper.

The ideal property would require very minor fixing up such as removing outdated wallpaper or linoleum. However since there are many other buyers and investors looking for simple fixer-uppers, you’ll have a hard time locating one. But don’t give up hope, there are certain fixer-uppers other buyers will overlook, especially if they’re visibly unappealing from the street.

The extreme opposite of the simple fixer is the home requiring significant renovation such as foundation work, moving or adding walls, adding more bedrooms and much more. Unless you have a rich uncle or a contractor in the family, you should walk away from these type of properties, especially if there are significant health violations (like mold) or can’t be lived in because of extensive damage to the roof or floors. Let’s study the 3 main concerns when buying this type of fixer-upper:

1) Bank Financing Will Be Slim – When a home needs major repairs, a lender may require you to correct some of the important problems before they approve your loan. If you don’t have money set aside to complete the improvements, the bank won’t approve your loan.

2) Beware Of The Money Pit – While the reason you may be considering a fixer-upper is due to financial constraints, ask yourself if you can afford to spend the additional money to repair the place. Even a simple cosmetic fixer requires some money to repair. Be sure to set aside additional funds to cover these renovations.

3) Major Remodeling Can Disrupt Your Life – If this is your first home, you may not want to deal with contractors, take time off work to oversee their activity, and deal with unexpected delays or extra costs. Your family relationships can also suffer from the resulting chaos while living in the house during construction.

Your best option would be so search for a fixer-upper somewhere in between the two extremes: a home needing moderate repairs you can handle on your own or with some professional assistance. Choose a home that only needs new paint, carpeting, or tile work rather than a new roof or major electrical upgrades. If you do find a property that fits your criteria, make sure to:

1) Consult with your local city’s building department to determine if the changes you want to perform are acceptable. Most cities have restrictions and codes regarding wiring and plumbing remodels, setback distance, height limits, and other restrictions.

2) Don’t invest a lot of time and money into a second story addition or adding a room without first getting the professional opinion of an experienced contractor, architect, or engineer.

3) If you’re buying a fixer-upper with another party, be sure to discuss how everyone will deal with the resulting stress and extra responsibilities coping with contractors and workers.

Looking to find the best deal on a starter home? Then contact these local San Clemente Realtors or Huntington Beach Realtors to help you find one.