I REALLY want to buy this house!!!!

scrappykatJuly 26, 2014

Hey All,

I've posted about this house in the Buy/Sell and Remodeling Forums, but I need your opinion now.

I put in an offer on a foreclosure 1935 bungalow and had the inspection last week. It was not pretty :( New roof, lots of damage from the old roof not being replaced, plumbing and electrical is all messed up (it is up to date electrical tho), leaky dishwasher, sink and shower, damage to attic rafters (sagging and splitting), not enough insulation, garage door is broken, but the big problem is the foundation.

Also there is an old well in the basement. I cancelled my offer at this point but the bank had an estimate done for the foundation and well--$15-20K to fix the foundation and ~1K to take care of the well.

The bank said i could submit a lower offer but the inspector basically said this house is a "money pit" :(

Its on a lake and has a great yard and the neighborhood is ok---I still want it but am scared about all the work that needs to be done.......

any advice??

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worthy

Land value only.

    Bookmark   July 26, 2014 at 1:54PM
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scrappykat

Oh, and there are also pest issues in the basement and the hot water heater is rusty :(

Land value per tax assessment is $27,100---doubt the bank would go for that :(

    Bookmark   July 26, 2014 at 2:06PM
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totsuka

Run away..it's an old home that was never maintained. It should be pushed over and demolished.

    Bookmark   July 26, 2014 at 2:15PM
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lazy_gardens

It's past the point of repairable - spending 20K to fix the foundation under a rotting structure makes no sense, because it's still falling apart.

Unfixed leaks cause damage that can't be fixed if they go too long, because there's not enough sound structure to tie the repairs into.

The only fix for that much damage is a demolition permit and a bulldozer.

    Bookmark   July 26, 2014 at 5:16PM
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enduring

I agree that the house is a disaster. You have went through every thing that is important in a dwelling and it is ALL bad. If you want to live there, tear it down and build something new. Make the offer for the land. It will cost you to tear it down too so there is more money to account for in your offer. If the neighborhood is only "ok" why put yourself through all of this? Find something else.

Listen to your gut, walk away now!

    Bookmark   July 26, 2014 at 5:48PM
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Trebruchet

It depends. Can you make it habitable long enough to build next to it? There are lots of individual circumstances that make this more complicated than just "tear it down."

    Bookmark   July 26, 2014 at 5:54PM
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renovator8

Find a vacant lot and save the removal cost.

    Bookmark   July 26, 2014 at 7:41PM
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Suzi AKA DesertDance

It's really sad when you love the location, but unless you have unlimited funds, you will be sorry you bought. This IS a money pit! Like others have said, it's a tear down. Great location.

So, why not buy it, tear it down, and buy a really nice new manufactured home to stick on the lot. You will be much happier for sure.

I know, nobody wants a mfg home, but they are cheap, well built, electrically up to code, and new!

Suzi

    Bookmark   July 26, 2014 at 7:49PM
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renovator8

Make offers to adjacent property owners. Just because the properties are not listed doesn'tt mean the owners will not sell.

    Bookmark   July 27, 2014 at 8:03AM
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scrappykat

yes, i know you all are right, it's just that finding something i can afford on water is next to impossible. My gut is telling me the house is bad---damaged.......i guess i could make an offer for the land----any idea on the ballpark cost of a small (this house is only 880 sq. ft/2 bedrooms, 1 bath and i am good with that) manufactured home?

What about tear down costs? Any rough idea?

I really appreciate everyone taking the time to comment and reinforce what my gut was telling me---thank you!

    Bookmark   July 27, 2014 at 9:01AM
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lucille

Old pier and beam homes are sold all the time, companies that specialize in transport and setup can move the house onto your property. It is somewhat expensive (but often cheaper than getting a home built) and you have to research local ordinance and so on, but it might be the right answer for you.

    Bookmark   July 27, 2014 at 9:49AM
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worthy

Land value per tax assessment is $27,100---doubt the bank would go for that :(

It costs nothing to make an offer.

BTW, some excellent ideas upstream.

    Bookmark   July 27, 2014 at 11:13AM
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Suzi AKA DesertDance

I'm not sure which state you are in, but it's easy to find out the costs of mfg or modular homes. They come in many styles and sizes.

I simply googled "Cost of manufactured homes" and many sites came up. I linked to a small one below.

If you add your state into google search, you should be able to see many options.

Here is a link that might be useful: Costs in Wisconsin

    Bookmark   July 27, 2014 at 11:38AM
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emmarene

It is a lemon. Forget you ever saw it.

    Bookmark   July 28, 2014 at 4:22AM
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mdln

Sorry, I do not recall the exact amount, but discovered tearing down & removing a house was not as expensive as I thought. Also, your local fire dept may be willing to cover the cost of teardown - if you let them use it for training first. Have a chat with the fire chief if you decide to go that route.

At least make an offer on what you think the land is worth.

    Bookmark   July 28, 2014 at 9:42AM
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scrappykat

thank you for all your valuable input! I have heard the fire dept. might be interested in burning things down as a training exercise-----not sure about hauling away all the crap.......i have pretty limited funds so am not sure about even being able to afford a manufactured home (lots of hidden costs i've heard----preparing a foundation, cost to transport, etc etc)

i wouldnt want a trailer and am not even sure i'd be able to put one there....

    Bookmark   July 28, 2014 at 1:28PM
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rmtdoug

Location, Location, Location.
Is this the worst house in the whole area?
Is the area desirable to live?
Is the lake nice enough for swimming, boating, fishing, or year-around use?
Nearby amenities?
Good school system?
Good fire and police protection?
Good job base locally?

If yes to all these, and if you are young enough to wait until you have money to rebuild, and can stand living in a dump in the meantime, and can get it for $27k, go for it and start honing your building knowledge and skills. You will need them even if you pay someone else to do the work.

    Bookmark   July 28, 2014 at 5:30PM
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scrappykat

the location is great and the neighborhood is fine but i pulled the plug---i don't want to live in a dump and am not that young lol , i might put in a bid if it doesnt sell by its auction date , otherwise i'm going to keep looking---i just don't have enough money to either fix this place up or tear it down and start over :(

if it doesn't

    Bookmark   July 28, 2014 at 8:04PM
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rmtdoug

Wise decision. You will live to fight another day :)

    Bookmark   July 29, 2014 at 12:59AM
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scrappykat

ty rmtdoug and everyone else, for your wise council!

    Bookmark   July 29, 2014 at 4:45PM
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scrappykat

UGH!!!! I'm *still* thinking about this house------here's why:

Bank just dropped minimum bid to ~$55K, so i put $20K into the foundation, ~$7K into a new roof, $1K to remove the well, $2K into plumbing, $1K into electrical, $1K into new hot water heater, $5K to fix the water damage, attic beams, (all approximate costs except the foundation and well---got estimates for those and $20K was on the high end of the estimate)

I would have a pretty nice house for less than $100K in a pretty nice (working class) neighborhood on water(!).......what am i missing here???

Other improvements like adding a second bath to the laundry room, possibly converting garage to a family room/3rd bedroom, etc can wait........

Talk to me lol

    Bookmark   August 5, 2014 at 4:48PM
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mdln

Are you young, with the time to invest in the project, and the money/financial situation (e.g., stable, well-paying job) to take the risk?

While there are many of the same type of programs - Have you watched an episode of HGTV Flip or Flop and seen all the surprises that happen to this couple who obviously has the finacial resources and expert help available?

Am not trying to discourage you, Nicole/Rehab Addict is my hero, just hoping you make an informed decison.

Here is a link that might be useful: flip or flop

    Bookmark   August 6, 2014 at 12:53AM
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Mags438

"i don't want to live in a dump and am not that young lol , "

"-i just don't have enough money to either fix this place up or tear it down and start over :("

Inspections usually only cover what can be 'seen'. EXPECT more than can be seen, especially if water damage exists...It will prolly cost you more money and time than you estimate. It always does.

    Bookmark   August 6, 2014 at 1:03AM
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scrappykat

Yup---you guys are right again :) I'm over it-----moving on.....ty again for being the voices of reason!

    Bookmark   August 7, 2014 at 9:49AM
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lucille

I don't think there is a right or wrong, I agree with mdln, that what is important is an informed decision.
I'm a senior, bought a fixer-upper a few years ago. Like Mags438 said, expect the unexpected, there were unforeseen expenses other than what the inspector found, and I'm still working on it.
But I like the house, it is perfect for me. If I could go back in time, I'd buy it again.
You have to weigh what is important to you. If the house can be made habitable with a small investment, could you have another small home moved onto a property?
Tax assessment or no, 55 for a lakefront situation if the house could be made habitable may be a good deal for someone.
This house may or may not not be the right home for you, the decision you make will be the right one for you if it is an informed decision.

    Bookmark   August 8, 2014 at 5:16AM
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scrappykat

Great advise Luciille. I am just torn because of the unknown----water damage is the main thing right now---what's going on inside the walls? Mold?

I am going to ask my Realtor what the status is on the house and go from there because you're right---$55K for waterfront is a steal

    Bookmark   August 11, 2014 at 5:57PM
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bordercolliesrule83

Ask your realtor what the land is worth. Just the land. Also, has the house been condemned? Sounds like it might be with all the problems.

    Bookmark   August 11, 2014 at 6:55PM
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lucille

"What's going on inside the walls?"

It never hurts to ask for something you want, the worst thing that can happen is a denial. Citing your concern about mold, ask your realtor to request permission from the seller to open the walls in a couple areas, describing exactly how large the opening will be (would an opening from a large drill bit be enough? I don't know). Get with your inspector or ask a mold expert exactly what needs to be done, a swab and test kit? See what it would cost to find out if there is mold.
Again, the worst that can happen is that you are told no.
It is perfectly OK to just walk away from all this if it seems more than you want to take on right now. But it is also OK to ask for a little more info.

    Bookmark   August 12, 2014 at 6:32AM
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party_music50

Just don't do what a former co-worker did! He bought a run-down "house" (camp?) on a lake, then immediately tore it down to build his dream house. He didn't realize that he wasn't allowed to tear down a house that the bank held a mortgage on! He had to scramble to pay off that mortgage *immediately*, leaving him no money to build, so he now owns a nice piece of empty property on the lake. :p

    Bookmark   August 12, 2014 at 8:43AM
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scrappykat

this is a foreclosure and the bank has a minimum opening bid/offer of $55,500 (lowered from $68,700 after all the problems my inspection turned up).

If the house doesn't sell by the end of Sept. there will be an online auction (again with a minimum opening bid of $55,500).

I think I will wait and see what happens at the auction and go from there (if I don't find something else in the meantime ;)

    Bookmark   August 12, 2014 at 1:54PM
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edlincoln

Does the house have any historical significance? Any "old world" Victorian detailing that would be hard to do today? Is it solid brick? Do you have the time and skill set to put in "sweat equity"? If the answer is yes, that could change the answer.

    Bookmark   August 28, 2014 at 2:33PM
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hairmetal4ever

It is my experience that banks usually place unrealistically HIGH asking prices on these types of properties. About half end up going to some poor sap who overpaid for it (based on condition moreso than market). The other half do end up going for a fair price, but only when it has been on the makret a long, long, long time.

While it's understandable that a bank, like anyone or any entity, would try to maximize what they can get for the property, they are often short-sighted when they have situations like this.

I wouldn't pay $55k for that house even if the walls were filled with gold ingots.

    Bookmark   August 28, 2014 at 2:40PM
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anntn6b

How many walls have you replaced, rewired, resheetrocked, floated, painted?

How are you at nailing things above your head?

Do you bounce gently when you fall off of a ladder?

I think my husband and I could handle that house; we've rebuilt one house, and done two others totaling over 5000sq ft from the studs out, (and replaced studs where needbe.)

It costs more and takes longer to rebuild than to tear down and start from scratch.

Reasons to rebuild: some communities give fairly major tax advantages to older home. Doing less than 10% a year might let you avoid someof the permits that some places require you buy before you do anything at all.

If your best friend, who for the sake of this conversation we'll create as barely able to nail a 3" nail straight and unable to repair a toilet, were looking at this house, what would you tell him or her? Repeat that while standing in front of a mirror.

    Bookmark   August 28, 2014 at 2:52PM
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