We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
October 05, 2022, 10:46:36 am
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
October 05, 2022, 10:46:36 am
Home Help Search Calendar Login Register

Author Topic: Rehab with risk  (Read 2381 times)

Offline IRO

  • Member
  • *
  • Posts: 41
Rehab with risk
« on: November 02, 2011, 12:00:32 am »
I have an offer in on a property and I want to know if I am taking on too much risk.

The building will cost 70K with a down payment of 15K.  Seller carry IO 55K for 5 years at 9%.

The building is 70 years old, with an original square footage of 500sqft.  Additions have been made to increase the size of the building, with one 40 foot length of  foundation being earth to wood contact, with the sill plate right on the ground.  There is no evidence of termite infestation, but I will inspect and treat as necessary, then build a stem wall for that part of the foundation.

All utilities are at the site.

This is a large lot, the back of the lot is 30 yards away from a railroad.  There seems to be an old, buried sidetrack that goes right up to the back of the lot.

ARV is 135K.  I believe that I can rehab this place for 30K.

If Iím right, I can flip it for 35K profit, or buy and hold for an ultimate cash on cash between 10 and 15 cap.

What are the environmental risks involved with railroad sidetracks (Iím thinking repair and refueling, possibly herbicides or cargo)?

Does anyone have experience with this kind of  termite code violation?
Steve
Independent Rental Owner

Offline Gold River

  • Member
  • *****
  • Posts: 2329
Re: Rehab with risk
« Reply #1 on: November 02, 2011, 04:21:04 am »
Hi,

    How confident are you of your rehab estimate and of handling the new section of stem wall footing? Will you acquire a permit for the stem wall and work performed? Is the additions done with quality and were they designed to make the structure look like one building or are the additions lean too's at the sides or back of the original building?

If it looks cut up or chincy it might make it hard to sell!

I take it with additions the house is larger than 500 sq. ft. and something like a 3/2 which is rentable or sellable?

As for the rail road tracks I think you say the rail spur comes up behind your property, not on it? So this should not be a problem as the chances of contamination are probable very small with a very old spur your describing! To be buried over is an indication of a line that has not been used in over 50 years as it takes time for erosion and vegetation to rot and bury it!

If you have concerns you can take some soil samples and look on line for a environmental test lab that do soils! The test can be done in a couple of weeks and will tell you about carcinogens, asbestos, mercury, fuels, etc. if they exist and the parts per million with guidelines as either exceptable or high toxisity!
A couple of samples can be tested for around $150 bucks or so with you grabbing and shipping the samples!


                        GR

« Last Edit: November 02, 2011, 04:25:17 am by Gold River »

Offline IRO

  • Member
  • *
  • Posts: 41
Re: Rehab with risk
« Reply #2 on: November 02, 2011, 09:55:48 am »
Thank you for your reply.  I appreciate your feedback and advice.
Steve
Independent Rental Owner

 




SMF 2.0.15 | SMF © 2017, Simple Machines