Back in the January issue of this newspaper, I wrote an article about how I had finally fixed up my fixer-upper (not done – but well on the way) that I have owned since 1990. Since then, many people have responded to that article with hope that they, too, could own a home and do what I have done. After all, if a self-employed single mother of a four year old could purchase her own home, well, it just gives hope to many. Passing that hope around is why I wrote that article. And it's why I'm writing this series – it will take more than one article to cover the subject well.

It's my theory that there are plenty of "affordable" homes that already exist. You don't have to wait for Burbank Housing to build new ones and get in line to be one of the lucky home-owners. (Yes, they are planning a rather large project in Guerneville where Noonan's garage currently sits.) What you do have to do is be willing to purchase a fixer-upper and put the time, energy and money into it to bring the home up to good. That's not everyone's cup of tea, but it's very rewarding on a lot of levels, starting with the fact that you are no longer a renter. You are a home-owner. Congratulations! This is a BIG DEAL!

Before I get into the nitty-gritty of how to pull this off, I want to chat about why it's so important to own a home and why now is a good time to chase that dream. West County is getting bought up by people with bucks, from developers to deep-pocket real estate investors and even people who want to live here – in the Wine Country. As the deep-pocket people buy up real estate and change the place we call home, property values rise to meet that demand and their incomes. Right now we're in a real estate slump, loan rates are still pretty decent and who knows how long we'll have before we are priced out of this market. Many people see it as hopeless now, but they're not looking at the funky bungalows and ratty summer cabins with spacious yards, lots of trees and no foundations.

One thing is certain, the upscale homeowners are not people who maintain their own properties from washing the windows to tending the landscaping. They need "working class" people to maintain their lives. Those hard-working physical labor folks need to live within commute distance of their hard-earned money at the gas pump. Live where you work. It makes sense. Working Class people also have the skills to maintain their own lives. That means they have the skills to own a fixerupper and fix it up! You know how to hold a hammer and are not afraid to use it? You're a candidate!

I want to encourage every person who pays rent – not cheap these days – to think of their ability to pay rent as their ability to pay a mortgage. I know – you don't have down payment money in the bank and that's why you can't own a home. Not so!!!!! Neither did I – there are ways!

Good Credit is GOLD!

Let's start with some very important concepts. I sat down with several realtors and a mortgage broker, and ultimately, that's what you need to do as well. They ALL say it's best if you start with a good credit rating – 720 or above. Fixer-uppers are already a bit of a bear to finance, so having a good credit rating can get you in the door. Any lender knows that a fixer is harder to sell than a nice, clean home. They have numerous problems right from the start. If your credit is good, you look like a good risk even if the home doesn't. And here's where a mortgage broker comes in handy, especially one who is familiar with where your potential home is situated. Mortgage brokers have lots of lenders to choose from and know the ones who will finance challenging homes. They'll go through your credit application and find the best loan to fit your needs. That is invaluable. Being self-employed, I have always gone down the "stated income" path because my tax returns are not impressive! My life is tax-deductible! That leaves a lousy net income line which doesn't impress anyone, let alone a lender. My mortgage broker (First Priority in Forestville) has helped me over the years as I bought out my equity share partner and eventually re-financed in order to do the muchneeded construction. That all took 17 years!

So lets talk about the patience part of this project! 17 years yep – that's a long time to live in a virtual shack that was an embarrassment to my growing daughter. Fixing the leaky roof, re-wiring bit by bit, repairing the failing septic – all these things hit where it hurts and sometimes in avalanches. It's not the end of the world if you can climb on your roof with shingles in hand and do a decent job until you have real money for a real new roof. It's not so bad if you know how to run new wire from the circuit breaker box to honest to goodness real grounded outlets. It's not the end of the world if you know a thing or two about replacing old faucets, a broken toilet that leaks, plumbing that burst during a rare hard freeze.

The first time I hired a contractor was after the posts under my house rotted so much it was listing to one side and a friend fell through the front stairs. I tried to do the repair work myself. Got under the house, removed rotted lumber, dug trenches, etc. I will never forget the expression on my eight-yearold daughter's face as I asked her to help me hold up the beam while I propped a new post under it – the look of total fear on her face and the growing ache in my back got me to make the call. I got the permit (cheaper than you think and very important), the contractor and threw the work on a credit card and called it good. Sometimes you have to surrender.

Great Advice

Here's some great advice from a couple who just bought a livable fixer for $159,000. Yep that's right –UNDER $200,000. It's real folks. They're out there! Advice from Dale Richner & Shawn Makinson who bought their home in Guerneville through Sue Mobley at Russian River Realty in Guerneville. "We have some advice for anyone who thinks it can't be done:

1. Spend time up front finding a good mortgage broker. Banks often decline loan applications, especially under less than perfect circumstances, but there is probably someone out there somewhere willing to make the loan. A good broker can shop a lot more options, and is familiar with a lot more special programs, than one buyer has time to research.
2. Get your credit in the best shapeyou can. With a higher credit score you become a more desirable buyer and, more importantly, a buyer that banks want to lend money to. This also usually gets you access to better loan programs, too. Get current credit reports, and take control of your credit. If you're not sure how, get some free financial advice. It's never too late.
3. When you make an offer, ask your agent to write in a credit toward closing costs. This is money the seller pays you at closing, to help ease the pain of the one-time financial "hit" that comes with closing costs. This opens up more possibilities for anyone shopping with tough budget constraints.
4. Buy a property that needs work- but work that you can do. We're not carpenters but we can handle painting, minor repairs, and heavy duty cleanup just fine. It's a lot of hard work and you don't have your perfect dream from day one, but the payoff is heightened pride of ownership in knowing you created something, as opposed to walking into someone else's creation. Plus, you're much more likely to make a good investment with your hardearned dollars.
5. Lastly, economize. This doesn't apply to everyone, but the vast majority of us can cut expenses elsewhere. Reduce or eliminate cell and cable service, cook at home instead of eating out, replace a costly hobby or habit with a cheaper one. Downgrade your vehicle, or even get rid of it. (Less money can probably buy you car-share and taxi service when you really need non-public transportation.) These things can save more than people realize. And if it could make the difference between owning a home and renting indefinitely, who wouldn't consider making some tough choices?"

LOTS of Options

One of the most enthusiastic realtors I interviewed is Kyla Brooke from Frank Howard Allen Russian River in Guerneville, because she jumped through lots of hoops to get her first home. Her story is empowering and I'll go into details next month - but suffice it to say, she has great advice because she's been down the path herself. You'll find that the support of a good realtor and loan agent will offer you options you never dreamed you have. That's what this is all about - dreaming and making the dream come true. I'm running out of room for this article – so I'll go into more details next month. In the mean time, take a look at your credit and your life – there's hope on the horizon if you believe.

Affordable Homes Part 2 »