Buying & refurbishing an apartment (e.g. Muji Renovation)

[mariejustice54]

Has anyone bought an apartment to refurbish with a company such as https://www.muji.net/renovation/ ?

Any ballpark cost for a 1LDK or 2LDK (Renovation cost and acquisition cost if possible)?

And probably the most important question: Is it possible to include the renovation cost to the mortgage please?Thanks.

 

[daddylopez1963]

@mariejustice54 I can answer your mortgage question. Yes there are mortgages with house purchase and renovation included. Usually they are two loans though. MUFJ does it.

 

[sparrowly]

@daddylopez1963 Some banks will lend you >100% of the cost of the purchase, the extra money is for remodeling, buy a new car or furniture, etc…

 

[daddylopez1963]

@sparrowly They will sure, but in my case you have to give them quotes to back up your claims of requiring the extra money. I had to submit my remodel plan with all fees so that they could accept it.

 

[revstockton]

@mariejustice54

And probably the most important question: Is it possible to include the renovation cost to the mortgage please?Thanks.

This will depend on the bank, but many banks offer packages with include renovations.

However, I think a lot of realtors dislike dealing with these options as they generally require an estimate for the renovations. This takes time and creates the possibility that someone willing to just buy the property will swoop in and do so.

While it doesn't go beyond being anything but anecdotal evidence, when we bought our used place, our realtor absolutely did not want us to consider any sort of loan that involved renovations.

 

[victoria37]

@revstockton OP will need to move fast and prepare in advance but it's possible; my realtor was perfectly fine with it, recommended banks that offered renovation + mortgage products, and introduced a contractor. It's also possible to have the contractors accompany you on the initial visit to check if the renovations you want are possible.

In order to sign the option to purchase, one only needs pre-approval for the property price. There's a negotiable length of time between signing the option and the actual transaction for the bank(s) to do the final screening, and during that time you can get a quote from the contractor and get approval for the final loan value. The renovation plan can be finalized after the handover, so there's no time pressure on that.

Of course, it also helped that in my case the seller wasn't in a rush to sell.