I need a larger house, and I just looked at one candidate. it is around 86 years old, and is in a very nice neighborhood. It has a nice yard 9big enough for a swimming pool). here’s the downers:
-it hasn’t been painted in 11 years; gutters are rotted and leaking. Siding has deteriorated, and major portions are rotted.
-electrical system is outdated-probably majore rewiring needed.
-Bathrooms-from the 1930’s! new fixtures and plumbing needed.
-hardwood flors are stained and scored-need sanding and refinishing.
-Kitchen is outdated and appliances are ancient 9the stove is1950’s).
All in all, I am looking at 9-12 months of solid work to rehab this wreck. So, should I buy it?
Hey, buddy, this is not a general question. I am sure a mod will be along at some point to move this into IMHO, since you are requesting opinions. That said, whether or not you choose to buy this depends on your ability to effect the repairs, cash reserves and willingness to do so, and the amount the house is discounted versus normal market value due to its condition. This is in addition to the normal range of questions which one would ask when buying real estate, stuff like: Why are you buying (to live in it or as an investment)? Is this the location I want? Is it a good value for the neighborhood? Do I want to live here? Is the community a good fit with my lifestyle? Do I like this house? Can I resell the house if I want to? ad nauseum
Good luck!
The answer depends to a large degree on your financial situation. I’m sure you don’t want to give detailed info about that in this public forum, so I would say the question is unanswerable.
Whatever you do, get a professional home inspector to inspect the house. It shouldn’t cost more than $200 and he or she may find a large problem that you have missed. You can often use the inspector’s report to get a lower price on the home.
Haj
Some thoughts:
[li]If the house is priced right, buy it. That means if they’re selling it for what it’s worth, not for what it would be worth if it were all fixed up. How do you know if it’s priced right? Have a licensed inspector inspect it so you know what’s wrong with it (maybe you’ve done this already, maybe not, but it’s the step to take).[/li][li]If you have the time, money, and ability to do the repairs, then don’t let it phase you that they need doing. If you lack any one of those, you’re at a greater disadvantage. If you lack any two of them, give up now. You’ll wind up flushing whatever money you put into this house right down the toilet.[/li][li]Prioritze. Fix first what needs fixing first. Old appliances? OK, but do they work? If so, they can wait. I’ve watched enough This Old House to know that you don’t refinish the floors and put in new appliances until the foundation and structure are sound.[/li]
Hope this helps. Good luck!
I have done what you are contemplating twice. The real trick is to figure out if your sweat equity will result in a profit.
Normally, I do not do such a deal unless the problems are cosmetic. A crappy bathroom and kitchen make a house almost unsellable to most people and you can fix them yourself for a reasonable sum.
When you get into rewiriring and rotten exteriors, you are talking about real money and very little bang for the buck.
You need to figure out what the house would sell for in fixed condition, get a GOOD estimate of the cost and then assess.
IT sounds like you are going to put at least $60,000 into this house if you do it yourself.
What is your estimate and what is the price?
One more thing. If you have a sig other, you may want to consider how he/she will handle you living in a crappy, torn up house with a partner that spends every spare moment working on projects. It takes a VERY strong relationship.
I agree with pretty much everything that’s been said above, and let me add the following:
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Make absolutely sure that the structure of the house is ok. It’s really difficult to fix structural elements in a house because the rest of the house is in the way. If the exterior is rotting, there’s a good chance that the owners didn’t adequately protect the interior structure over the years.
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As other people said, make sure you’re getting a deep discount.
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Depending on your local economy, it may be difficult to line up tradesmen to do the necessary work.
One more thing, part of the equation is the intrinsic value of the house as an historical object. For example, if it has well carved mahogany hearths and banisters, nice built-ins, etc. then restoration can bring reward.
However, if it is a run of the mill house without any special features that will make people go crazy and buy it for over market, then it does not have the potential.
I bought an 1899 Italianate home once. It had fir floor and this ornate oak hearth with a mirror. People went nuts over it. This alone drove the value way up.
My current house is a bungalow with only one built-in and a mild arts and crafts style. IT will not make people go nuts, so I had to make sure that it was way under market.
I bought it for $118k, put in 3 months and $12k and it was appraised at $160,000. But, it only needed paint a new kitchen and new bathroom. Simple stuff.
This is not a General Question.
I’ll move it to IMHO
DrMatrix - General Questions Moderator
Lot’s of good advice above. I’ll just add one thing:
Make sure they can be refinished. Hardwood floors can only be refinished a finite number of times before the wood gets too thin. You don’t want to find out they’re too thin to refinish again after you’ve bought.
I heartily agree with comments on “structure”, but would expand that to “infrastructure”.
The plumbing in this house is undoubtably galvanized steel. It has a useful life of less than 60 years. After that, it will have corroded inside enough to effectively cut off the water supply to the fixures. Replacing this is no fun.
The waste system, if septic, is how old? You may be forced to update it. If it doesn’t have a drainage field adequate for today’s standards and it fails, you may not be able to update it. If it is on city sewer, the main pipe to the street is probably clay pipe or cast iron. Both of these allow roots to penetrate them. Plan on replacing this pipe.
The electical service will probably have ungrounded 2-wire circuits and a service of about 60 amps. Todays houses run from 100 - 300 amps. Interior electrical work can’t be approved until the service is upgraded. That’s everything from the pole to the breaker panel. Then you will face rerunning circuits in walls etc.
Unless this house has some intrinsic value as mentioned in Mr. Zambezi’s post, and you are exceptionally handy and have resources ($, tools, cheap labor, relatives, friends, knowledgable sources of info) to draw on, I’d recommend something newer.
Look on the toilet right under the tank. There should be a part that sticks out on the side in the shape of a goose neck.
There is no valve. (this is hard to describe). The flush causes water to drain from the tank into the bowl. When the water level gets higher than the higest point in the gooseneck, water flows over the hump in teh neck. On teh other side of the hump is the sewer line. As water pours down into the sewer line, it pulls the remaining water out of teh bowl through cohesion and pressure differential.
While this is happening, the water from teh tank continues to drain into the bowl at a slow rate. Once the bowl is drained, the drainage pipe has no more suction /low pressure/cohesion to drain the bowl so it continues to fill up to a certain level.
I imagine you understang teh floater shutoff so I wont drone on.
And I would add to make sure they’re thorough. The guy who did our inspection spent three or so hours going over everything with a fine tooth comb. But I’ve heard horror stories where some joker spend 30 or so minutes, pronounced the house A-OK, took the money and ran, leaving the poor buyer with a house in which the roof leaked, the floors sagged and the basement/crawlspace was riddled with termites.
Since I work for a termite/pest control company, please heed this advice. Call a licensed, certified termite treater or company to arrange for a Wood Destroying Organism Inspection. While many inspectors know their stuff when it comes to the engineering, electricity, plumbing and heating, many of them are woefully ignorant when it comes to spotting termites, powder post beetles or carpenter ants. Here in New York, you have to take an 8-hour course given by the state, then pass a test in order to become certified 7C (allowed to treat structures for termites and PPB). And since it costs money, a lot of inspectors don’t bother. I’ve come across a lot of misinformed reports from inspectors who thought they knew what they were talking about, but didn’t. So have a specialist look at it. A lot of companies don’t even charge for the inspection (although a clearance letter is often available for a fee).
This is also important, because, as haj pointed out, it could save you money in the long run. Most banks won’t issue a mortgage on a house with an infestation. Once it’s treated, it’s fine. And I believe most states require the seller to fix the problem. Find out what laws apply in your state. But if termites are there, and they’re missed by the inspector, and you find out about them a couple months after your closing, guess what? Your house, your checkbook, buckaroo. Too bad you didn’t know about it before you bought the place.
I bought a house two years ago. A bigger than my old house house. It was a deal. I paid 100k for it, and it has just appraised for 160k.
If I add up the work I did to make it liveable again, and I did little but paint and clean, no new anything anywhere other than a few electrical outlets, I just about break even.
Upside is, this is a nice home in a nice neighborhood with good neighbors. The value of the house to us, in looks, size, niceness of the neighbors, quality of construction, etc. is well worth all the money and more.
I have to agree with basically everything Mr and Mrs and Mrs Zambezi say; confirm structure first. Get (minimum)two private contractors to come by and give estimates on the entire rehab, from plumbing to electricals to siding to roofing to gutters to rotten wood replacement and bath and kitchen.(and basement/crawlspace repairs if required) If the repair estimate + the cost of the home is not AT LEAST 20% below the retail value of the house once rehabbed, don’t bite. If it is, buy it, have contractors fix what is daunting (plumbing, electricals, roofing, siding) and save the do-it-yourself stuff like kitchen, bathroom, etc. These are simple areas where the DIY person can get a lot of return for little investment in time and money. A DIY kitchen is usually 40-50% of the cost of a contracted kitchen. Same with bathrooms. And it CAN be a lot of fun, if you and your S.O. are handy and like working together.
OBTW, what DAVEW is saying is true, it’s very hard to get a loan on a pile of crap. Maybe that’s the first thing you need to learn, whether any bank will actually loan you the money to do the job. Give them the rehab estimates, too, see if you can get a loan for the entire job, you might find that easier.
b.
Good Luck!!!
You’re asking us if YOU should buy it? How would we know, we can’t see it, don’t know where it is, etc etc.
Get a contractor & estimate on all that stuff to do & then do a cost analysis.