Houses - Stock or modified?

Okay, so as I've mentioned in previous threads, we're looking to move (cross-country) soon.  We're under contract on selling (Yay!) and will be actually looking at houses soon.  We'll have interim life-support if we need it, so if we have to do work to a house, we won't have too much of an issue if it takes a few weeks to get the house ready.  So, a fixer-upper is in the cards and, due to its price and potential, is possibly a top runner.

So, what has been your experiences with fixer-uppers?  Would you do it all over again or just push the easy button and spend tens of thousands more?

IME the difference between a fixer-upper and a renovated house is the point in time when you spend the extra tens of thousands...

My main concern with renovated houses is that you can't see the quality of the work that went into the renovation, so it's not always easy to assess what the pig under all the lipstick really looks like.

That depends on if you want to invest the labor and have the skills/time.  I have almost no household skills beyond painting, changing light bulbs and other very light duty stuff...and that's the way I like it.  I have no interest in home repair/remodeling, I'd rather pay someone to do it.  I don't like older homes, I don't find them "charming", except maybe to look at.  I wouldn't want to deal with the issues they present, nor the layouts they have.  I actually like newer, modern, "cookie cutter" homes.  I hate the HOAs that many of them are in, but I like the houses themselves.  That's just my preference though, YMMV. 

We've done the cross country move, rented while we shopped for a new home.  We did new construction because of the above mentioned, fixer upper was never on the table.

I've bought a brand new house once and fixer uppers twice. 

I spent just as much time "improving" the new house to make it exactly the way I wanted it as I did on fixing up the fixer uppers.  The real decision is how much of the work you want to do or are willing to do compared with how much you can afford to farm out.

Lifted:

Lowered:

Hydraulics:

KyAllroad (Jeremy) said:

I've bought a brand new house once and fixer uppers twice. 

I spent just as much time "improving" the new house to make it exactly the way I wanted it as I did on fixing up the fixer uppers.  The real decision is how much of the work you want to do or are willing to do compared with how much you can afford to farm out.

Do you think the improvements on the new house were just a lack of experience in building a new house thing?  For us, we've now had 4 new construction homes and have learned a lot from the first time.  We spec the house exactly as we want it before they ever break ground.  It's so much cheaper to make modifications and structural changes at that point than to do it after the house is standing.  For example, our current house was spec'd as a 4 bedroom, 2.5 bath.  But we had an en suite added to a bedroom, so it's 4 bed, 3.5 bath.  We had two custom linen closets, master bath delete (replaced by a huge shower and a hot tub outside), altered the stairs slightly, had lots of electrical upgrades, had two built in microwaves installed in the kitchen, custom driveway, tankless hot water heater, upgraded insulation in the walls, etc...  So the house is pretty much as we wanted it (or could afford) from the start. 

My preference would be to buy a house that "needs updates" as in everything is functional,  but from 1975. It is move in ready, but yuppies would think that it needs a new kitchen ten years ago. It isn't a fixer upper, as there is nothing wrong with it, so you can attack the problems at your own pace.

In reply to scardeal :

My biggest concern/fear would be finding a reputable and reasonably priced contractor clear across the country in an area you’re(presumably) not that familiar with and/or have few if any friends to lend guidance & experience. 

mtn said:

My preference would be to buy a house that "needs updates" as in everything is functional,  but from 1975. It is move in ready, but yuppies would think that it needs a new kitchen ten years ago. It isn't a fixer upper, as there is nothing wrong with it, so you can attack the problems at your own pace.

This.  1975-1980 is modern enough that you have a chance there is some insulation in it, old enough that it is probably sheathed in plywood, and right in the sweet spot where you are not paying for someone else's updates.

There will be no real  difference in the final cost of the renovated house, whether you buy one already renovated or have it done / do it yourself.  But you'll get the pick the fixtures, finishes, etc. to your own taste, rather than A) someone else's taste, or B) fix-and-flip generics.

I transitioned from project cars into a project house, and have enjoyed it. We didn't start with a major "fixer upper" though, we just did fairly minor stuff (Opened up a wall, replaced floors, installed a bunch of can lights, lighting/plumbing fixtures, paint, etc).

Your talent may have something to do with it. 

I recently bought a fixer upper. I could have bought a finished house in the same  neighborhood for a bit more. 

But any "finished" house is gonna cut some corners. The work would have been done to a flipper's level of quality. 

I have a high level of skill in this. I am capable of adding value in workmanship that shows. Much more than average. 

So, I chose to buy the fixer upper. I added a $40K kitchen, and a $25K bonus room expansion for less than $17K total invested. I am upgrading the entire house for 25% of the cost of buying someone else's poor workmanship, and making it spectacular at the same time. 

I have added nearly $100,000 in value for less than $25K invested in a matter of a few months. That's money well spent as far as I am concerned. 

Your skills can determine the real value of what you are adding. If your work is worse than the local contractor's would be, you may devalue the property, not improve it. 

Similar for many on here, it's hard for me to pay someone to screw it up when I can screw it up perfectly well myself.

That said, our first house I spent about 9 months doing 8 hrs of work on it each night (after working a real job 8hrs/day - thank god we didn't have kids yet). We (the royal we) tore out all the exterior wall drywall to insulate, took out a load bearing wall and replaced with an lvl beam, re-did entire kitchen, replaced all interior doors, new windows all around, new trim on everything. Sanded and refinished all hardwood floors. Replaced a sliding glass exterior door with a wall and a window, and re-did the roof with aluminum shingles. I learned a lot and got a lot better at doing stuff. And most of it was fun, but it is a LOT of work. Almost everyone underestimates how much work this stuff is.

Our next house we bought complete from a flipper. Yes the quality isn't quite as good as I probably could have done myself. But I also saved 1500+ hours.

Pete Gossett said:

In reply to scardeal :

My biggest concern/fear would be finding a reputable and reasonably priced contractor clear across the country in an area you’re(presumably) not that familiar with and/or have few if any friends to lend guidance & experience. 

This. I've heard that even for folks who in the construction industry, it's all about who you know and your connections. If the contractor knows you and you give him lots of work, he'll give you better quality at a lower price. If he doesn't, he'll either A) turn down short-term work for jobs too small or B) make you wait forever and raise his rates on the fly.

mtn said:

My preference would be to buy a house that "needs updates" as in everything is functional,  but from 1975. It is move in ready, but yuppies would think that it needs a new kitchen ten years ago. It isn't a fixer upper, as there is nothing wrong with it, so you can attack the problems at your own pace.

The problem is the owner thinks it’s worth the same as the fixed up house.  My dad.  

Nothing functionally wrong with his house but three bathrooms and a kitchen needed a total update.  His 1970 house had minor refreshing in the early 1990’s but was really dated along with foyer tile and the 1970 paneling he painted in 1990 to freshen up his family room along with every room that had wallpaper or a border.   I convinced him to watch his price but he got mad years later convinced it was worth way more.  

So, just to give a little more context, I'm moving back to an area roughly 40 miles from where I grew up.  I'm not too concerned about finding contractors.  In fact, it seems like half my family has done some carpentry work (professionally) in their lifetime, including my dad.  He'll probably come with us if there's a 2nd viewing.  (Oh, and my father-in-law used to own and operate a kitchen and bath business.)

I know that the fixer-upper in question needs at least flooring.  So long as that's all it needs to be *livable*, I'm happy to consider it.  If it needs a laundry list of things, then that's another story.  However, it would within a few years need an addition, though.  All the other houses we're looking at are an additional 25-50k, and some of those have neither a garage nor a workshop.  This one has what they're calling a workshop.  If it has electricity, I'm fine with that to start.

Oh, and in terms of my skill level, my wife and I did a light remodel of a half bath recently (toilet, vanity/sink, paint, fixing drywall damage, trim) and I like to build speakers.  So, maybe medium.

Datsun310Guy said:

mtn said:

My preference would be to buy a house that "needs updates" as in everything is functional,  but from 1975. It is move in ready, but yuppies would think that it needs a new kitchen ten years ago. It isn't a fixer upper, as there is nothing wrong with it, so you can attack the problems at your own pace.

The problem is the owner thinks it’s worth the same as the fixed up house.  My dad.  

Nothing functionally wrong with his house but three bathrooms and a kitchen needed a total update.  His 1970 house had minor refreshing in the early 1990’s but was really dated along with foyer tile and the 1970 paneling he painted in 1990 to freshen up his family room along with every room that had wallpaper or a border.   I convinced him to watch his price but he got mad years later convinced it was worth way more.  

Not a problem for the buyer. Buyer pays what the house is worth, unless they're desperate or stupid (or have bad advice from a realtor). 

In reply to scardeal :

I was just in the same situation, just bought a house last month. My first house was my starter house, very livable when I bought it 15 years ago, but I've put a ton of work into it over the years. I've got three kids now, and not much free time, so I was not looking for another fixer upper. I was looking for my dream house. 

But... houses are expensive where I live. We had a hard time finding a house we liked, in a neighborhood that we liked, on a large enough lot, that didn't cost a fortune. We found out about a house before it hit the market that was perfect on paper. Huge lot in a perfect location, perfect sized house, great floor plan. We had a checklist of all of the most important things to us, and it checked all of the boxes. Except- it needed more work than I would have liked. The house needed exterior paint and repairs. The large lot needed attention to the landscaping. Front looked nice, back was rough. The interior was in very good shape, but original 90's, and not nice and modern like all the other houses that we looked at. I was against it at first, I just saw all the work that I would need to do. I worked for years on my other house, this one felt a bit like starting over, but with a much larger, nicer house. I was ready to spend the money and be done. My wife reminded me that it was perfect in all of the areas we can't change- location, lot, floor plan. If we could get a deal on it, I wouldn't have to do all the work myself. We put in a very aggressive offer, and it was accepted. We brought some contractors out during the inspection, and got a quote to repair and paint the exterior for much less than expected. We got it for around $100k less than comparable houses on smaller lots in the neighborhood, and it will only take a fraction of that to do some updating. The really nice thing is we have the chance to make it how we want. It's going to take some work, but in the end it will  be much nicer than anything else that we could have comfortably afforded. 

In reply to scardeal : There are those who buy a new car off the lot and just drive it and there are those who find some old derelict in the perfect location and make it their masterpiece.  

It depends on you and your values.  

Every time you move you give up between 10-15% of the value of the home.  Yes I’m aware a realtor typically gets 7% but that doesn’t count the expenses of moving.  the cost of making the home fit and work for you, new furniture drapes and rugs etc. 

so a $300,000 house costs you at least $30,000 maybe more.  Plus you start all over on the mortgage.  Remember those first payments where only a few dollars apply to the principle?  How many payments before even 1/2 of your payment goes towards reducing the actual debt?  

Move often enough and you’ll find yourself nearing retirement with very little equity in a house that’s now too big and too expensive.  

Bottom line?  The kitchen, nice windows, etc depreciate. Almost as fast as cars do.  

The land on the other hand appreciates at about the rate of inflation.  Exception? Highly desirable land. Water front, stunning view, desirable neighborhood due to proximity of good paying Jobs and schools.   Those appreciate at two to three times the rate of inflation.  

Wanna make money owning your house? Don’t worry about countertops or flooring  spend your money on waterfront, location location location  

fix all the other stuff  later  

Still living n the first house ( built 1964) that I bought 26 years ago. With the Molvo approaching a conclusion and retirement eminent,  I have been noodling a home-remodel on the scale of the Molvo project. 

In reply to Boost_Crazy :

That's the way to do it! 

When I bought my first house the biggest thing was that everything appeared to be maintained. It was older and needed some help but as long as everything was in good condition and accessible I was willing to consider it. From there I was able to focus on the various upgrades I wanted like new windows, flooring, bath, and kitchen rather than cleaning up neglected crap.

That's a mistake I made on my second house. I bought it from Afghanistan and was looking for something "move in ready." The inspection report came back as everything being in good shape so I bought it. Things are in "technically" good shape (ie: Good foundation, water heater replaced, roof in good shape, no mold, et.al) but there's a lot of neglected areas that I've had to address before I can get started on addressing the things I want to upgrade. Screens don't fit right because the contact areas were dirty, the sills need to be re-urethaned, doors were marked up from a dog scratching at them, someone built a bathroom/laundry area into the house garage making it 14 feet deep so only the 13' 6" RX-3 fits in there and made the kitchen drafty. E36 M3 like that.

OTOH the kitchen was lovely and the first floor has solid hickory floors which photographed well.

So my advice is something that's not upgraded but shows signs that someone cared.

You've all given me good things to think about.  Please keep the stories coming!

frenchyd said:

In reply to scardeal : There are those who buy a new car off the lot and just drive it and there are those who find some old derelict in the perfect location and make it their masterpiece.  

It depends on you and your values.  

Every time you move you give up between 10-15% of the value of the home.  Yes I’m aware a realtor typically gets 7% but that doesn’t count the expenses of moving.  the cost of making the home fit and work for you, new furniture drapes and rugs etc. 

so a $300,000 house costs you at least $30,000 maybe more.  Plus you start all over on the mortgage.  Remember those first payments where only a few dollars apply to the principle?  How many payments before even 1/2 of your payment goes towards reducing the actual debt?  

Move often enough and you’ll find yourself nearing retirement with very little equity in a house that’s now too big and too expensive.  

Bottom line?  The kitchen, nice windows, etc depreciate. Almost as fast as cars do.  

The land on the other hand appreciates at about the rate of inflation.  Exception? Highly desirable land. Water front, stunning view, desirable neighborhood due to proximity of good paying Jobs and schools.   Those appreciate at two to three times the rate of inflation.  

Wanna make money owning your house? Don’t worry about countertops or flooring  spend your money on waterfront, location location location  

fix all the other stuff  later  

 

Well said and all great valid points!

One thing I'd point out is that different houses can be vastly different to work on, much like cars.

My old house was a single story, comp roof, raised foundation, with easy attic access that ran across the whole house. Everything was easy to reach or access. Plumbing underneath, electrical above, working on the roof was no big deal. Very easy to work on and upgrade.  

The new house- complete opposite. Slab foundation. Steep, high, slippery tile roof that is a lot more complex. I don't want to be up there. No real attic to speak of due to vaulted ceilings, not an easy place to work. Two story. Simple things like cleanly running speaker wire become big jobs. I better like the layout because it's not as easy to change. Even interior painting is more difficult. Old house- 8ft ceilings. New- over 20 feet in some places. Heck, changing a light bulb can be a chore.