With prices rising beyond the grasp of many buyers in SoCal, many are left with the following choices:

  • Stay put in a rental, and continue paying off someone else’s investment.
  • Moving into a smaller than tolerable home for a few years.
  • Buying a correctly sized home that is in tough shape.

Here’s a quick roadmap to help you with the answer to that question: should you buy a fixer in Santa Clarita or a fixer in L.A. County?

infographic-should you buy a fixer

 

You can thank (or blame) it on Chip and Joanna, Jonathan and Drew, or any other HGTV dream team — fixer-uppers are getting their fair share of love on the market. According to a survey from Coldwell Banker, 70% Americans want to buy a move-in ready home — leaving about a third of buyers looking to rehab their perfect dream home.

A lot of people buy fixer-uppers with a 203K loan, a mortgage insured by the Federal Housing Administration to help buyers who don’t have a lot of cash to purchase a property in need of repairs. A couple caveats: There are limits to how much you can borrow (they vary by location). And, even within those limits, you can only borrow enough to finance either up to 110% of the home’s projected value after rehabilitation, or the value of the property before rehabilitation plus the cost of rehabilitation. The maximum loan amount is the lesser of these two options.

 

Further Reading:

5 Questions to Ask Yourself About Buying A Fixer

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The Condo Report: Spring 2018