Author Topic: Buying a house need advice  (Read 1580 times)

Mrkineticz

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Buying a house need advice
« on: March 17, 2015, 03:10:51 PM »

Specific question
should i buy a house for 250k that needs renovations or a house for 310k fully renovated? ( i know im going to get alot of heat for the housing prices but, we are not willing to live further out of our target area and live in a ghetto neighborhood either. No townhomes and I need a garage to do wood work/automotive repairs)


The reason im asking is that I have a car loan and a student loan that I want to pay off asap. If i buy a house that needs renovations  i will need to pay alot of upfront costs and time to do renovations.
If i buy a fully renovated house I dont need to put in any money into the house. I can pay the student loan and car off faster then tackle my rental mortgage and my primary housing mortgage?
thanks for the responses in advance



I am new to MMM 2 months
Stats
i am 32  / my fiance is 30
no kids
no credit card debts for both of us.
will greatly reduce costs when we move in together after we're married
We can live off one income and still save
maxing out both 401k/403b this year
maxing out tIRA each of us this year


Income:
-Registered nurses x2 we make roughly 180k yearly combined


Liabilities
-fiances student loans 15,000 3% loan from fiances parents
-first property 126,000  3.25 fha loan with pmi (will turn into a rental )
-car 17,191.54 with 7% apr car loan (2010 prius) I use this car for work I drive alot

investments
-60k 403b my fiance has

anon-e-mouse

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Re: Buying a house need advice
« Reply #1 on: March 17, 2015, 03:18:37 PM »
If you're doing the work yourself, be prepared to spend a lot of $$ and time on never-ending projects....
Make sure to get a thorough inspection on both houses.
IF (and it's a big if) the cheaper house + all necessary repairs + all wanted repairs/upgrades = quite a bit less than $310k house, THEN I would consider it.
Also - unless you're super handy, you'll likely need some help here and there so budget for that too.

I would ask a friend or two that have actually done some big home repairs to inspect the $250k house with you for advice.
Some cosmetic repairs are quick and make a huge impact.
Some "small" repairs can be damn expensive and something you won't even really see.

frugaldrummer

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Re: Buying a house need advice
« Reply #2 on: March 17, 2015, 03:43:11 PM »
Yes -
are  you handy?
how much are the renovations going to cost- if you do them yourself, or if you hire them out?

How much will the renovated house be worth when you're done?

I've made quite a bit of sweat equity on homes in the past.  Especially if the renos are just cosmetic (paint, flooring, tile) and you are handy AND have a good decorating eye, you can build some instant sweat equity into a place.  If, on the other hand, the renos are structural (plumbing, electrical, foundation, roof etc) they are likely to cost a lot without adding significantly to the value of the home.

Also what about location, location, location?  Is one of these homes in a more desirable spot, or have a better lot?

And if you are just too cash strapped to be doing the repairs, then you should not buy the fixer.  Things often do cost a lot more than anticipated.

Mrkineticz

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Re: Buying a house need advice
« Reply #3 on: March 17, 2015, 04:57:08 PM »
this is my 3rd property im buying. i have a rental property thats paid that makes me 1000 a month minus hoa and taxes brings me roughly 650 cashflow per month. I have my curent house that i am converting into another rental property that I fully renovated while I was living in. This current house I am buying is not going to be my dream home but will be my primary residence. My SO will not want to live in a house that needs renovations or is always under construction. If i was to do the work myself it would take alot longer than a licensed proffesional due to working full time every week.
I am super handy but I also cant live with small imperfections. theres some things I will not do such as installing granite countertops, close seam tiling and intricate tiling ill leave those to the pros because they are experts at those things.anything cosmetic i can pretty much do. I can do floors, drywall, paint, make furniture, redo stairs, install fixtures, do backsplash tiling. bathroom tiles.
I am not cash strapped. I just figure I can pay off my other debts instead of putting upfront costs with renovations.