We’ve all seen them…tiny little houses in disrepair…
Questionable foundations…no windows to speak of…particle board half covering points of entry.
With the temptation of low entry/purchase cost…(under $10,000)…am wondering how others have faired in turning these into habitable rental properties.
-Mike
Had a freind that took advantage of a couple of those in down town type area and wholesaled it bought for 5k sold for 12k etc… He figured better to whole sale a few and see if the buyer had luck with rehab and sale/rent. You may want to try that first
That’s an interesting approach. It might work best for a friend of mine who has the cash to pay for a place like that, but not the time to babysit subs or deal with tenants at this point.
I’m working on one of those right now…1400sf…Bought it for $4700 on Ebay after a property manager I was thinking of using drove by the property for me and told me it looked like a good deal…After I got into town I couldn’t believe how horrible it looked…Never wanted to go near it…The place had aisles to walk through in the house between all the trash…Spent $3000 to get rid of it all, plus a garage teardown and haulaway…It was filled to the rafters with nothing but junk…Got to know the neighbors pretty well and they told me the guy was the neighborhood packrat…Everybody would bring all kinds of things to him and he’d keep it…Anyway, after getting all the junk out, I noticed one wall on the side of the house was easily moved in and out…All the wood was rotted from a leaky roof over the years…Tons of wood rot around the edges of the house…
Bottom line…neighborhood is actually great…3 family members own the 3 houses up one side from me, all the neighbors know each other, etc., so the neighborhood’s fine…Spent a few days replacing joists (1st and 2nd floor), rebuilding one wall, laying new flooring…Not much money at all for that…Put on a new roof, new siding, new windows, and new doors…Place looks like a million bucks now from the outside…Now working on the inside…Carpentry’s all done, so now working on drywall, new flooring, etc…Can’t wait till this place is finished…It’ll end up being one of the best houses I’ve rehabbed…Took about an extra week and a half of effort than my normal rehab due to all the junk and rotted wood, but thankfully this one will work out nicely…
Have to admit, this house has taught me not to be afraid of too many houses…
buff…
How do you think it, (the former shack), stacks up with the other comp-sized homes in the neighborhood…it’s ARV comp value.
And with that…besides the 4700 how much else did you put in.
-Mike
I thought that was a typo at first! I know a guy who lives in a city with a lot of “shacks” like that. Not sure he can get them for $4700. Maybe $14700… Glad to hear it is working out. So what was the repair cost?
This is the second post I’ve seen this visit that sounds like an episode of My Name is Earl. :biggrin
Just curious on a few things:
What’s the ARV?
What was your total rehab budjet including the cleanup?
What was just the land worth if you knocked the place down?
I know in my area a tiny lot in the middle of the worst slums is worth triple that.
In answer to all your questions (and good ones!):
Houses in Buffalo can be bought for $1000 at times (one thousand - not a typo)…Plenty can be had for $5000 (five thousand)…Tons can be had for $10,000 (ten thousand)…
I’ll have about $35k into it when it’s all said and done (new roof, siding, windows, doors (interior and exterior), and complete new interior with cheap berber carpet from Lowe’s and ceramic tile everywhere there’s no carpet, 60 new sheets of drywall, all new electric, new plumbing, new furnace, new water heater, etc…the real value will be about $35-40k…I could have it appraised for $50k through my local loan officer here (he knows how to get it done) so the refi will refund all my cash…
Land value is about 3 cents (not a typo - three cents)…No reason to buy a vacant residential lot in Buffalo in anything but the more expensive neighborhoods…Housing here is typically the 2nd cheapest in America (I think Cleveland comes in #1?)…Most of the homes are the “craftsman” type built in 1890-1930…They’re really nice if you fix them up the right way but still will only appraise at about $25 (twenty-five dollars) per square foot or so when finished…But when you can buy them all day long for $1 (one bucko) to $10 (ten buckeroonies) per square foot, the market overall works out…
If this house were in Virginia Beach where I have my other houses, it’d easily be $150-$200k, but hey, this is Buffalo, baby!! :beer
Are you renting this one out?
If so, how much do you think you’ll get?
but hey, this is Buffalo, baby!!
Waitress:
“how do you want them wings?”
Hot and saucey…with an extra bleu cheese, please.
-Mike
Already had one firm offer of $500 rent from the daughter of a neighbor (too low)…Should bring in $650-$700 (with tenant paying water and taking care of landscaping)…I get $650-$675 for 3 and 4 bedroom units in duplexes, compared with $350-$375 other landlords get, due to the difference in neighborhoods (I don’t do warzones - mine are just average but livable), beautiful ceramic tile everywhere there’s not the Lowe’s berber carpet, nice paint job, nice closet touches (shelving, double pole hangings, lights inside), etc…All those extra touches cost me about one week of extra labor and somewhere around $1000-$1500 per unit…
I recently read an article that houses in downtown Detroit were up at auction for around 12k – and not selling. The auctioneer started joking that the sales did indeed include the land and that the 2x4s the house was made from cost more than what some of the houses were going for.
It’s a little different here in the South… :smile
Here $12k wouldn’t fetch a 1970’s dumpy single wide trailer with NO LAND.
“Blue, blue, my world is blue…”
LOL
Keith
Hey, at least I wasn’t born in Mass…
…and at least I was smart enough to be “from Mass…”!