Handyman Special

In real estate brokerage jargon, a handyman special refers to a property that is in need of repairs, often marketed as a fixer-upper. The implication is that the property is a bargain for someone who can accomplish the repairs economically.
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Definition

A handyman special is a term used in real estate to describe a property that requires repairs or renovations to restore it to a habitable or more attractive condition. These properties are often sold at a lower price compared to similar properties that are in good condition. The idea is that the buyer can purchase the property at a discount and then personally undertake the necessary repairs.

Examples

  1. Single-Family Home: A three-bedroom house with an outdated kitchen, peeling paint, and a need for new roofing. It is priced significantly lower than similar homes in the neighborhood.
  2. Multi-Family Property: A duplex that has been neglected over the years and needs upgrades in both units, including new plumbing, electrical work, and cosmetic improvements.
  3. Condo Unit: A condominium that has suffered from water damage and requires significant cleanup, mold remediation, and cosmetic repairs.

Frequently Asked Questions

Q1: Is purchasing a handyman special a good investment?

  • A: It can be, provided the cost of repairs and the final value of the property make financial sense. It’s important to conduct a thorough cost-benefit analysis before purchasing.

Q2: Are there any risks involved in buying a handyman special?

  • A: Yes, potential risks include underestimating the repair costs, overestimating the property’s value post-renovation, and discovering unforeseen issues that could escalate the budget.

Q3: Can I get financing for a handyman special?

  • A: Financing options might be limited or come with stricter terms. Some buyers opt for renovation loans specifically designed for fixer-uppers, like the FHA 203(k) loan.

Q4: Should I hire a professional inspector for a handyman special?

  • A: Absolutely. A professional inspector can identify hidden issues and provide a clearer picture of the repair work needed.

Q5: Can I negotiate the price of a handyman special?

  • A: Yes, since handyman specials are often priced below market value, there is typically room for negotiation, particularly if the property has been on the market for a long time.
  • Fixer-Upper: A property that requires maintenance work and is being sold at a lower price because of it.
  • As-Is Property: Property sold in its current state, regardless of any issues or defects.
  • Foreclosure: A property repossessed by the lender due to the previous owner’s failure to make mortgage payments, often sold below market value.
  • Short Sale: A situation where the property is sold for less than the amount owed on the mortgage with the lender’s approval.
  • REO Property: (Real Estate Owned) A property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.

Online Resources

Suggested Books for Further Studies

  • Real Estate Investing For Dummies by Eric Tyson and Robert S. Griswold
  • The Book on Rental Property Investing by Brandon Turner
  • Real Estate Markets: Prospects and Opportunities by Peter Dent and Farshid Navandi
  • The Millionaire Real Estate Investor by Gary Keller
  • Fix and Flip: The Ultimate Guide to Flipping Houses for Profit by Mark Ferguson

Fundamentals of Handyman Special: Real Estate Basics Quiz

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