Looking around for houses to Wholesale . Came across a boarded up place and was able to track down the owners ,Who basicly want to get some cash and be done with it . Got permission to go into house , While it NEEDS lots of work Not sure what to do
house built around 1890"s
Stone Foundation * Has some settling and cracks
2 of the 4 sills need replacing * due to dry rot
one fireplace * interior stone lining shows some cracks
roof has 2 sagging trusses
last set of shingles was put on in the 60’s
interior plumbing * pipe and lead fittings Very little PVC
Electric is 60 Amp service
interior walls wire lathe no insulation
needs a new septic system and drainage
CHOICES :
Jack up the house up
put full foundation in
replace all sills
Literally Gut the house Walls Plumbing ,Electric etc;
Pull off old shingles and replace
jack the roof trusses and replace as needed .
new furnace and hot water heater * vent and duct work as needed
OR
For a $1,000.00 donation the local Vol fire dept will come in and burn the place down * they need the practice
Zoned as 5 acre minimum homesite
going rate for house lots $ 6,000.00 Acre Tetail would be $30,000.00
House now is about 1400 Sq. feet 3 bedrooms 1 bath
Spoke with county Bldg Inspector If re-habbed must be in compliance with "BOCA Code "
the 2 sisters live in Fla . Literally have walked away from it ,Can’t even pay the taxes this year .
Brief Question :
Which way would you go ?
Is this TOO MUCH work for a Re-habber ?
Where would you start to make an offer price wise ?
The sisters don’t have a clue
Sounds very similar to house I just looked at. Bad area of town. Porch rotting, never been upgraded since being built in 1910. I think I can flip it for 15K, some of my rehab guys wud slap a few dollars on it and rent it like it is. If I got the house for free it wud cost more to rehab it than its worth. I asked the owner what kind of price was she thinking? she says fifty, I said, thousands? I told her if the house was in move in condition it wud be worth about 45K She then asks me, what were you thinking? I’m thinking $2500 Her 16 yr old Grandson says, my car cost more than that.
When wer leaving I ask, so, wud u consider a quick $2500 for the house?
I’ll have to think about it.
I may double my offer.
Bill, I’m still new, haven’t done my first deal yet. But my gut instinct was to also say pass. I was wondering if you’d go into your thought process and break it down for us. How much WOULD you be willing to pay? WHY did you say pass in the first place? Your input would be much more scientific than my “gut instinct,” Thanks.
It depends. What is the area? What do local buyers want? How much trouble and expense to subdivide (major miserable expensive headache in my area) Can the land be subdivided and the house fixed, both? What is immediately around it?
How much for a decent used mobile home? Are mobile homes accepted in that neighborhood?
I bought an historic house. Second house ever built in that area and built by the original settlers. It cost as much to fix it as it would have cost to raze it and buy a brand new manufactured home. But in this area, old historic homes can bring a premium and, after all, who wants to live in a trailer?
It needed everything. New foundation, new insulation, new roof, new windows, new wiring, new paint, new flooring, blah blah blah. Already had drop dead gorgeous views.
Bought $21,000. $30,000 repairs (not including my labor), sold for $125,000 and I took $80,000 timber off the land.
So… give us some more figures before anyone can tell you what to do with it.
When you start completely renovating an old house, you have to be prepared for additional problems/costs. It is not uncommon to start on one project only to get sidetracked by a $10,000 “repair.” It looks as if your profit margin is extremely tight here. I personally would not chance it.
If you really like the investment, then I would wait to see if it ever goes up for a tax sale. You should be able to get it for much less than $50k.
Pete, I do not think that would be a practical approach. If the asking price is $50k, why in the world would the seller take $5k. You could throw out the offer, but in all likelihood it will be a no go. Better to just walk away and find a better deal elsewhere.
As to burning down the place. In many places, even the fire department will not torch a house for practice. There is just too much liability concerning environmental contamination. Any demolition costs would need to be considered as an expense against the resale value of the land.