We have all seen some of those HGTV shows where a couple buys a home with a plan to redo the kitchen, bathrooms, etc. In return for all this work, they spend less money upfront on the purchase, and possibly get some sweat equity after doing the work themselves. This all sounds great when you are watching it on TV thinking to yourself, “Oh yea, I could totally do that”. However, in real life it is a bit more complicated and sometimes you may discover even more of a headache than you had expected.
It all starts with your budget. First, you buy the house (the easiest step in the process). Then, considering you got a good deal in a good location you are already headed in the right direction.
Now, you have to figure out how you are going to get the money for all the work and materials. (Actually, that is something you should have thought about before even buying a house) FYI, despite from what you may see in magazine ads, it is a bit complicated to get a loan for a fixer upper. I am not saying it is impossible, all I am saying is it is harder than getting a loan to actually buy the house.
So, before you buy, make sure you do have the funds secured to complete the project. Also, keep in mind that it is usually true that people tend to underestimate a project, and even if they don't things come up that you couldn’t really foresee. So unless you have been in the business for years and learned the hard way it’s not as easy as those shows on HGTV make it out to be.