- Where is this magical house, and who are you? It’s in a city that you’ve probably heard of. We are married people with cats.
- This house looks like garbage. Why don’t you just tear it down (or buy an empty lot) and build a brand new one? A couple of reasons. First, believe it or not, it’s not cheaper to do that, even when you factor in how much work this house needs. City land goes for a premium – we’ve seen empty lots in our neighborhood go for more than we paid for the current lot and our house! Second, the specific kind of loan we got, called a 203k loan, is specifically for rehabilitating existing structures. So we need to keep the foundation and some external structural components.
- What is a 203k loan? We wrote a whole post on this. In a nutshell, it’s a loan that puts the cost of a house purchase plus the renovations into a single mortgage. It takes a lot of work and patience (and some money) up front, but if your priority is getting a house that is exactly what you want and not paying for someone else’s crappy taste, it’s worth looking into.
- Are you DIYing? No. Part of the deal with a 203k loan is that the work needs to be done through a general contractor. Also, we would actually like to move into this house one day. Anything that isn’t part of the contractor’s bid is up for grabs though, so once their work is done we may have a go at some peripherals, such as landscaping or finishing the basement.