My wife is killing me!!!

Hello all

I am closing on my first property on Tuesday and the anticipation has my wife in fits. She is a worried we are going to loose our skins on this deal and wants me to carpet with wrapping paper and redo the kitchen in Mills Pride (ick)

I just wanted to run the numbers by you and get your perspective to reasure her (and myself) As they say, if the Misses aint happy, no one is.

Neighborhood is trendy with a slew of fassionable bars and shopping with in walking distance. Most all of the homes are 55-90 years old where most have been updated and there is a high percentage of rentals.

The house is a 2bd/1br, 900sq ft, full basement, 2 car garage and fireplace. It has solid bones and the plaster is in great shape, but it needs a lot of updateing. Comps are 135k - 160k.

Purchasing the house for 94k with 3% concessions, no down payment, no points, stated loan at 7.75% budget for repairs are 20K and includes new furnace, waterheater, kitchen, bath, windows, siding and refinished hardwood floor.

We are aiming for the 160K mark in regards to quality of product and design and will probably list it for 150. Maple cabinets, solid surface counter, new appliances and all the fixings.

We are doing 90% of the work ourselves and have good connections with the furnace and windows. I have a lot of experience in home improvement and in most areas in MI I would be putting in the mills pride and american standard. But I believe this market warrent the upgrades.

Am I on track?

IMO, it’s a lot of work for $20K.

What about your holding costs? If you’re doing 90% yourself, this will be a fairly long drawn-out process.

How long do you expect to take?


“new furnace, waterheater, kitchen, bath, windows, siding and refinished hardwood floor.”

Don’t skimp on the furnace, water heater or windows. If you get all energy efficient products your property will qualify as energy efficient. Buyers can get an EEM mortgage. It will allow more people to purchase the property because of a 2% DTI Stretch. You can also market the property as “energy efficient”, “with low utility costs”.

Bust your butts on getting the work done ASAP.

Get the bad boy back on the market before winter and market, market, market.

Good luck.

We are hoping 45 days working nights and weekends. The longest jobs will be the siding and the floors. We are pussing to beat the first snows.

20k does not include the carring costs. Right now my prices are as follows.

Furnace installed 2400.00
Windows installed 5000.00
Kitchen with appliances 2800.00
Bathroom 600.00
Water Heater 250.00
Siding 2000.00
Floors 400.00
doors 1100.00
Lighting 500.00
Landscaping 500.00
Misc. 2500.00 Wiring, plumbing, incidentals
total 18050.00

All figures are rounded but have been priced out and/or quoted.

payments are 725.00 month first one due dec 1. Seller assumed taxes for 2005 and will not be due again until 7/2006. Interst is 50.00 monthly.

Furnace is 90%, windows are low-e, not sure about the water heater. Also updating electrical and plumbing. Not a tough job since its a ranch with a basement and a kitchen and 1 bath back to back.

I will be spending 4 nights a week there and devoting every weekend until done. Thank god for Congical visits.

Speaking of marketing, I was thinking of putting upa FSBO sign up about 2 weeks before finish to generate interest, but not show it til its completed. Is that wise?

sounds like a good enough deal as long as you have your repair costs and time estimates right.

is the sales market good or soft? do you think you’ll be able to sell it quickly once you’ve got it on the market?

I think you are right on as far as the numbers go.
Do you have another exit strategy if for some reason it does not sell right away?

Average time listed is around 60 days. My exit stratagy? Pray. We want to avoid renting if at all possible, but its an option if nothing else.

Not sure what other options I will have. Market aggresively. Try FSBO initially for a month. List with an agent there after.

Tankless water heater is the way to go. Definate added value.

Praying is good :slight_smile: you also might want to think about marketing it as “Rent To own” and do a Lease Otion. Just remember to get a non refundable Option Fee. See the Sub2 and Lease Option forum. They have some great ideas too.