Things to Expect When Buying a Fixer-Upper for Your First Home
If you are faint of heart, buying a fixer-upper may not be for you. However, for many first-time homebuyers, it’s a great way to get into the market today. Make sure you are familiar with what it will take to renovate a house and what the buying process will be before jumping in with both feet. Here are some tips that will help you understand the process of what it takes when you buy a fixer-upper.
What to Expect When Buying a Fixer-Upper
In San Diego, at the time I am writing this post, the average list price of a fixer-upper home is approximately $800,000. If you search for a home in North Park or South Park, it is anywhere from $700,000- $850,00. Keep these things in mind when you start searching for a fixer-upper in your area.
Basics on Budgeting: Always think of resale when the home is all fixed up. Work backward and factor in the cost of repairs that it will take for this project. When making an offer on a house, take into consideration how much it will cost to remodel the home and will you recoup your money and some. Renovation loans are something to look into. A single mortgage would cover the remodelling costs, making it easier to fund the project.
Pick Your Projects Wisely: When finding a potential fixer-upper in need of home renovations, make sure that you are searching for projects that are more cosmetic than structural. As a first-time home buyer, dealing with structural projects can be overwhelming, and the costs of repairing them will add up. Never waive a home inspection. It is essential to have a good home inspector on your side who will help you determine whether remodeling this home will pay off in the long run.
Tackling the Project
Getting in over your head is no fun. Make a list of things that must be done right away and things that you would like to do. Prioritizing will make the process less stressful.
Using the Right Tools: The most cost-effective way to tackle a fixer-upper is to do the work yourself, that is, of course, if you are handy and know how to do some of the work. If you’re starting from scratch, it will be well worth investing in the right power tools. Consult a list of essential DIY tools, such as this one from Fine Homebuilding. A few essentials include a drill, a sander, a jigsaw, a basic toolbox, and a ladder.
Start with Structural Changes: If you need to make any structural changes or the exterior needs work, prioritize those projects first. Otherwise, you may end up undoing some of the cosmetic work you’ve already done inside.
What Makes the Most Sense? Even if you have projects that you want to put on the top of your list, focus on what makes the most sense to do first. You may be tempted to rip down the ugly wallpaper that is on the walls, but it may make more sense to install the floors first, since you will be moving furniture in; that is, of course, if you are planning on moving in. Then you can tackle the wallpaper.
Is Your Space Livable? If you are a person who likes to cook your meals, then you may want to put the kitchen renovation at the top of the list. Then, put the next most important project on the list that will make your home livable and less chaotic.
Stay or Sell?
After putting all your love, sweat, and tears into this renovation, you may consider keeping this house instead of selling it for a profit. I have seen this happen on many occasions. But if you decide that you prefer to sell, by doing a lot of the work yourself, you have a better chance of making a profit.
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Think about your end goal when buying a house to flip. You must appeal to a large pool of buyers, so keep this in mind when you renovate the home. Even though it is challenging to figure it all out beforehand, make your list before you start. Work with an experienced Realtor who can help you with this process. Buying a fixer-upper can be exciting if you are up to the task.
[author update 12-2-25]
Buying a Fixer-Upper in San Diego Metro: What You Need to Know
While the idea of buying a fixer-upper is exciting, the reality in historic San Diego neighborhoods like North Park and South Park is unique. Many homes here were built in the 1920s to 1950s, which brings specific challenges and massive opportunities.
Common “Hidden” Issues in Metro San Diego Homes
Unlike newer suburbs, homes in our Metro communities have “old house quirks” that first-time buyers must budget for:
- Foundation Issues: The clay soil in San Diego can cause settling. Always check for sloping floors in historic Craftsman homes.
- Cast Iron Plumbing: Many homes in Golden Hill and Normal Heights still have original cast iron pipes that are nearing the end of their lifespan.
- Electrical Wiring: Knob-and-tube wiring is still found in some un-renovated properties and may need upgrading for insurance purposes.
The ADU Opportunity: Adding Value Immediately
One of the biggest reasons to buy a fixer-upper in San Diego right now is the potential for an Accessory Dwelling Unit (ADU). San Diego has some of the most favorable ADU laws in California.
If you find a property with a detached garage in University Heights or a large lot in Normal Heights, you could potentially convert that space into a rental unit to help pay your mortgage. We help clients identify these “ADU-ready” properties regularly.
Financing Your Fixer-Upper
You don’t always need cash to buy a project house. We work with lenders who specialize in renovation loans that wrap the purchase price and construction costs into one mortgage:
- FHA 203(k) Loan: Great for first-time buyers with lower credit scores.
- Fannie Mae HomeStyle: Allows for more “luxury” upgrades, like adding a pool or a detached ADU.
Why Work with McT Real Estate Group?
Buying a fixer-upper requires a team. We don’t just open the door; we bring our network of trusted local contractors, inspectors, and structural engineers to the table. We will tell you if a house has “good bones” or if it’s a “money pit” so you can make an educated decision. Contact us today.
Request your step-by-step buying guide here.