How to borrow money to fix up a house

Kevin Quinn's 1866 home, before restoration
Have you ever been watching an episode of House Hunters where a young couple with a modest homebuying budget finds a fixer upper that's under budget and says they can use the savings to repair the house?

I've always wondered where they get that money from, since they probably barely have enough money for a down payment. Where would they find the cash to fix the hideous kitchen and the outdated bathrooms, or to replace the dingy carpet with gorgeous hardwood floors?

While House Hunters doesn't get into the details of homebuyers' finances, there are home loans available that will help you finance a fixer upper, and I've written about two of them for Interest.com.

Kevin Quinn, owner of Bartlett Home Improvement in Memphis, used one of these loans to fix up a house that was in such bad condition that he was repeatedly urged to tear it down and start over.

But he's a big believer in historic preservation, and wanted to restore a crumbling 1866 house.

The before and after photos you see here show what home renovation loans make possible.
Kevin Quinn's 1866 home, after restoration

If you're interested in buying a fixer upper, too, but don't have enough cash to make both a down payment and all the improvements, you can get the details on how these loans work and how Kevin used a renovation mortgage in my Interest.com article, How to finance a fixer-upper.

How to Get the Best Value on Grocery Store Meat

The best way to stretch your grocery budget when buying meat is to buy inexpensive cuts like bone-in, skin-on chicken thighs and tough cuts of beef and pork that you simmer in the slow cooker for hours.

At least, that's what I thought. I was wrong.

After months of blowing our grocery budget, I decided it was time to get back on track to my goal of spending just $285 a month. (If this sounds really low, it's because we go out to eat a few times a week.)

The best way to stretch the budget for two people who like to eat meat at almost every meal turns out to be purchasing boneless, skinless chicken breasts on sale.

You'd never think that a cut of meat that requires more labor--someone, or some machine, has to butcher the bird, remove the bones, remove the skin, and trim off lots of fat and gristle--would be the most economical. But I've found this to be true.

A local, low-budget grocery store puts this cut on sale for $1.59 a pound every few weeks, and we stock up then. We cut all the unsavory parts that remain off the breasts, which takes about 40 minutes for 12 pounds of similar sized cuts of meat that will cook in roughly equal amounts of time. We then freeze them in bags containing 1.5 pounds each, since that's how much we like to cook at one time. Cooking weeknight dinners becomes really convenient, because we now have premium, perfectly trimmed pieces of meat at a fraction of the cost.

But the trimming process leaves about 1-2 pounds of fat with pieces of meat mixed in. We used to toss this out, figuring that we were still coming out ahead overall, and that the time it would take to cut the meat more precisely wasn't worth it (the 80/20 principle). But I've discovered that I can toss all of the scraps into a crock pot on low for a few hours, melt the fat away, and be left with mostly usable scraps of chicken breast that are great for mixing with a sauce or putting in omelets, quesadillas, enchiladas, or any other dish that's good with small pieces of meat. I still lose whatever I paid per pound for the chicken fat, but I lose less than 10% of what I purchased, or about 16 cents per pound.

Bone-in, skin-on chicken legs, on the other hand, cost me 69 cents a pound on sale, and I lose a whopping two-thirds of that in bones, fat, gristle and skin that gets thrown out (maybe you like to use some of these things for stock, but I don't). I have a kitchen scale, so I actually did the math--I'm not just eyeballing it. That means I'm effectively paying $2.10 to get one pound of useable meat, still doing plenty of labor to separate out the edible meat, and getting a less healthy product (though dark meat simmered in its own fat in a slow cooker certainly is tasty!). The same goes for pork shoulder, which might cost $1.69 a pound and similarly loses 2/3 of its weight after subtracting skin, bones and fat.

Would it be cheaper to eat rice and beans, or quinoa, or other vegetable sources of protein? Maybe. But we like meat, so we find ways to make it as affordable as possible.

Photo: quiddle

Don't get stuck with a tough-to-sell condo

Photo: The Pug Father

Condos are great if you don't want the maintenance hassles of a single family home. They can also be a more affordable option.

But condo life isn't part of most people's long-term home ownership plans. The National Association of Homebuilders says that more than half of condo owners move within six years of purchase.

If you're shopping for a condo, you'd be wise to think about its resale potential before you buy. Do you know which floors, bedroom counts and layouts are the most desirable? Which amenities buyers care about most? Which locations within the condo building your should avoid? My new Interest.com article, Don't get stuck with a tough-to-sell condo, has answers to these questions and more tips for making the best condo-buying decision.

How to replace your front door

Photo: Ken Doerr

Did you know that replacing your front door is one of the most effective ways to increase your home's value? Your front door is part of your home's curb appeal, and it will influence what people expect to see when they enter your house. In other words, making a good first impression is valuable.

Front doors come in three materials: fiberglass, wood, and metal. You'll also need to decide what color to paint it, whether to add a storm door or a metal security door, and whether to repair or replace your front door yourself or hire a pro.

For help making these decisions and more, see what the real estate and home improvement experts I interviewed have to say about making smart choices for your front door in my Interest.com article, How to replace your front door.

How to buy a condo with confidence


Photo: Mesa Royale

Buying a condo is trickier than buying a house, because you’ll be sharing living space and financial responsibilities with other condo owners.

Buyers should look at a condo purchase as an investment in not just a property, but also a business: the homeowners association, says Gail Pizetoski, who owns Condo & HOA Smart, which provides due-diligence reports on homeowners associations for prospective buyers.

Make sure the association is not just financially sound, but also structurally sound, by reviewing HOA meeting minutes and talking to building residents, she says.

“Many owners aren’t aware of the full range of their responsibilities before they buy their condo,” Pizetoski says.

After all, the HOA manages the structure, community maintenance and landscaping.
Buyers should ask for the association’s audited financial statements, current statements and budgets to see if there is enough money to fund the operating budget and if enough is being put aside for repairs and long-term improvements, says Katie Wethman, a Realtor with Keller Williams in Washington, D.C.
Learn more in my Interest.com article that covers 5 smart moves to help you choose the right condo.
 

 


A Free Tool for Deciphering Your Investments' Asset Allocation


Photo: Doc Trader

Suppose you and your spouse each have a retirement account, but yours is at Fidelity and your spouse’s is at Vanguard. How do you know if your combined portfolios are invested properly to meet your goals?

A free online service called LikeAssets makes it easy to see your combined investments and asset allocation. It can also show you the combined asset allocation of multiple college savings accounts and other investment accounts so you can make sure you've chosen the correct investments for goals with different time horizons.

I’ve written before that most people don’t earn very good investment returns because of fear and risk aversion. Research shows that we underperform the market over the long run, and that we manage to lose money even when the stock market shows gains.

If you’re like most people, you’re one of these underperforming investors. LikeAssets provides a bit of insight that might help you improve. Read my complete review in my Interest.com article, Service keeps tabs on your many investment accounts.