Now, I purchased a townhouse, cheap! I wanted the experience of doing-it-myself remodeling. I maxed out my equity line (I know, wrong thing to do!) and did most of the work myself. Then, I moved out of state and had to sell…in June of 2007! Had I put it on the market six months sooner, I would have been able to sell it for roughly 70k more than I paid and I would’ve paid down the equity line and walked away with money in my pocket. But the opposite happened and I made barely enough to pay down the equity line. In fact, I ended up with debt because I was still paying the mortgage even though I wasn’t living there, while paying the mortgage on another home and making 25K less at my new job!! What a nightmare!

So, a few years wiser I would say, go with the nice home! If you really feel that you need to the experience of fixing up a house, then go for it. I’ve been there and done that and I have absolutely no desire to spend my time doing that ever again. I will hire out! Either way, it will cost you money. But, think about what your time is worth too. When I began remodeling my townhouse, I stopped going out with friends and quit most of my hobbies for two years, and I worked around the clock so I could get the job done and behind me. But the truth is, once you start working on your home, you’ll always find other projects that need to be done and well, you could become a prisoner to your home, just like my mom has for the last forty years!

Cheers!

Will that $15,000 drop any if you are able to do a lot of the labor involved?
Big items, like a roof, etc, would take a big cash outlay all at once – are you able to do that or will Granddad do that and you pay him back?

Make sure any updates will be worth the improvement – meaning value of the home would increase enough to make it worthwhile.

I don’t know why you need proof of income to live in Grandpa’s house nor to do the repairs – unless you are having to borrow money to do it.

Now – add the $30,000 and the cost of fixing it up…. Will it sell for that much when you are finished? If you are going to have to put more money into it than it is worth, then I’d run run run away from it.

And how good are you with the repair skills necessary for some of the do-it-yourself projects???

If the inspection shows that the foundation, roof, electrical, and plumbing are all solid, and there is no dry rot/termites, and if most of what you will have to do is cosmetic/patching/painting, then you might have found a good deal…. but also then check to make sure it is not a meth house or something similar that would make it unsaleable later on.

If you buy, make sure you can get a clear title to the property, with no liens on it, and that the owner has the right to make the sale, and make sure the contract is iron tight – I’d seriously use a lawyer – and that the interest rate is good and non-flexible. Sounds like the down payment wouldn’t even cover the closing costs tho – so something sounds fishy there.

Also – if the house is not in your name (meaning the mortgagor keeps it in their name til you pay it off), then you will have trouble getting an equity loan against it for repairs, and you will have trouble getting contractors to work on it unless the owner will allow contractors notice to owner of intent to lien paperwork for the work being done.

There’s a LOT of homework to be done on this one, and a lot of questions to be answered, at least in my opinion, before I’d touch this one

I am happy that you are looking for a house but I would be very skeptical about this one. Be careful and do your due diligence.