Hey, what do you know about foreclosures and short sales, discounted properties, properties that are damaged? Should you be looking at rehab projects? Are they good for first time home buyers?
The simple answer, as most of my answers are, is no. You should not be looking at those.
Distressed properties, rehab projects, things like that are going to be a problem for a first time home buyer more often than not.
Here’s why: Any home is a money pit.
I know as a Realtor it’s not a real big enrollment conversation for me to be telling you that every home is a money pit, but every home is a money pit.
As a first time home buyer moving from someone who’s renting to owning, you honestly have no idea what’s in store for you. Your landlord has been taking care of all the structural things or not, and that’s why you want to move, but still it’s on their plate, not yours.
It’s important that you realize that there’s a ton of what are, for you currently, hidden costs to owning a house. By buying a distressed property or a rehab project or a foreclosure, you’re buying a ton of someone else’s problems.
Buying anything used you’re buying someone else’s problems, but buying a distressed property, just think about it…it’s a foreclosed house…that means they haven’t been paying the mortgage for 6 to 18 months. When do you think they stopped working on the house? They’re not keeping the house in good shape for that time. You can count on there’s more deferred maintenance than normal. They don’t even care if the house sells, the bank does, so they’re not putting any energy into fixing that house up. It’s quite clearly buying a vast open gaping hole.
Whatever reality TV has taught you, whatever HGTV or Bravo or any of those fix and flip shows have taught you about stuff, it’s not true. It takes more than a 30 minute to turn a house into a masterpiece like that, and a ton of money. No one’s coming to do it for you.
Unless you’re doing it for a living, you’re not going to get the best deals. Think about it. There are people and all they do is flip houses. That’s their job. If you find a house that’s available for you to buy, that means that all those people, the people that do it for a living, have passed on that one. They would have bought it. They hunt as a job. You’re hunting while you’re at your job. They’ve passed on it. You think there’s a value there for you? No, there’s not. As a first time buyer, it’s way too risky.
You can get into a better house that’s going to cost you less in the long run, make you more money by doing good background work. Educate yourself, use a good loan, you make your money in the buy, not in the rehab for first time home buyers. Stay away from rehab projects unless you want to end up in rehab.