The Quest For the Old and Frail
This is a bit more than a weekend project, but with all of the foreclosures on "Needs some TLC" properties, there has never been a better time to buy. If you are a first time home buyer with some moderate carpentry skills and half a brain, there is a lot of work you can do your self. Most of these homes can be salvaged and simply need to be partially remodeled and/or updated. This usually is expensive, but if you can get a house for good price, then you have the ability to put a large amount of money down for improvements. Roughly about 35% of that money, you can get back from the government in the form of a rebate check for any energy efficient upgrades. These programs are state, not federal programs so qualification is pretty simple. First, you go to your state's website and type in "rebate programs" into the search function. You will then be given a list of different rebates available and how to get them. This does two things. It allows you to plan before you buy the property to see if this is even a feasible project, and it allows you to see if you can get what you want out of a property in terms of your investment.
Walk Away If You See These Problems
Part of getting a good deal is knowing when to walk away. Sometimes the decision can get emotional and cloud your judgment. Remember, you are buying a home as an investment. Here are things that scream, "Tear Me Down!"
1) Foundation wall is severally bowed and multiple floor joists are twisted and/or leaning. This type of project could cost as much as $50,000 to fix and is generally not worth it because it has ruined everything else above the affected area.
2)The plumbing is galvanized plumbing and the water has been capped off and the pipes drained. Galvanized water pipe joints do not seal well to begin with. Generally the sediment build up is what had kept the pipes from leaking after the plumbers dope wore off. Now when water is re-introduced into the pipes, the build up is loose and gets pushed away causing leaks at most of the junctions. Typical cost just for plumbing is $10,000 because of all of the labor involved to remove the old plumbing.
3)There has been long term water damage from long term vacancy and lack of up keep. If the entire house needs to be gutted including the structure from water damage, you might as well build a new house.
4) Extensive insect damage on floor joists and supporting beams. If the structural beams and framing is not sound, then again, the house is probably not worth buying.
5) Rodent infestation. It is extremely hard to get rid of the odder and the critters if he house is already infested. This seems pretty logical.
The things that you want to replace are finishes; kitchen and bathroom cabinets, counter tops, carpeting, paint. Things that will cost you, but not drive you into immediate debt. One rule of thumb I have always told my clients is that whatever projects you plan to do, ALWAYS add 20% on top of what you think it will cost.
Whenever buying a piece of real estate a licensed home inspector should always be called. $300 is a small price to pay if something is significantly wrong. You also have negotiating power to prove that there are issues with a written report provided in the home inspection service.