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Foreclosure...cheap but in bad shape

Posted by mcmarsh (My Page) on
Wed, Jun 15, 11 at 12:49

I've been lurking around this site for a while.

Last week this house came to my attention.

http://www.sokyrealtors.com/template39/nextpage.asp?mnu=175503

Sorry if I've posted this link incorrectly. Hopefully you will be able to follow it.

It is in a wonderful neighborhood and I feel has great potential. We went to look at it. It has been trashed. It's filthy and windows have been broken out. It's in a general state of disrepair.

We are also first time home buyers. I'm not sure if this might be too much of an undertaking for us. I have no idea where to even begin in the process to see if this could work for us. We are not DIY people...not for lack of effort but more from lack of knowledge. We would for sure need the help of a contractor.

With financing...do any of you have experience with buying a house like this with enough in the loan for repairs/reconstruction? The real estate agent mentioned at 203k loan and referred me to a mortgage broker who hasn't responded to my email as of today.

Any advice would be greatly appreciated.

Here is a link that might be useful: House


Follow-Up Postings:

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RE: Foreclosure...cheap but in bad shape

the link isn't working. trashed as in filthy is good because it cleans up but people can't picture it. trashed as in copper ripped out, air conditioner miss, duct work stolen (!! it happens) is another story. with these kind of houses you need to plan on spending $1000-$3000 on inspections alone. a top-to-bottom HVAC, electrical, plumbing, roof/attic, basement/foundation inspections are musts. you need to go into this eyes wide open.


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RE: Foreclosure...cheap but in bad shape

Ditto on the link not working.

Without the pic, or more information, I'd have to say no--unless you are willing to learn the skills to do the easier jobs.

More information on the house is needed than just 'filthy'...does it require major plumbing and electrical, roofing, etc. If the neighborhood is good, then that is a plus, but give us more to go on.


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RE: Foreclosure...cheap but in bad shape

Try this one.

There is only one picture of the house. When we visited we walked right in (since the door was wide open and windows busted out).

Obviously, only seeing it once, I have no idea regarding plumbing/electricity etc. Those would be things I would for sure discuss with an inspector. I really just didn't want to even start looking into this without knowing I could get the financing for it. And again...not sure how I even go about this process.

We are absolutely willing to learn how to do the small things. My husband actually stays at home with the kids and we have the ambition and the willingness to learn how to do the small things. Be we for sure aren't diving into electric/plumbing/floor support, etc.

Here is a link that might be useful: House Link


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RE: Foreclosure...cheap but in bad shape

Here's a link from the BUYING AND SELLING HOMES forum. Some smart people over there - they can be tough but you can find some good info/advice.

I hope this link works!!!

http://ths.gardenweb.com/forums/load/realestate/msg0512043220747.html?12

Here is a link that might be useful: 203 Loan info


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RE: Foreclosure...cheap but in bad shape

around here if the door was wide open and the windows busted out, there wouldn't be a scrap of copper left inside. really impossible to tell what kind of work it needs but i'd venture to guess it is more than "little things." new roof for sure.

think long and hard if you want to take something like this on as first time homebuyers. you'll need a last a few thousand cash on hand, with the possibility that you will lose this money if inspections and things turn out too badly.

honestly, unless you are very financially secure and have plenty of time, i would save something like this for your next house.

if you REALLY want to move forward, I would, ASAP, find an inspector willing to walk you through it for $300 or $400. have him give you a sense of what needs done and even what other inspections are needed. talk to people you trust about the inspector. you need someone who can do a lot more than test the faucets of a 1985 suburban townhouse. get tuned in with local historic preservationists - they know this kind of thing.

FINALLY, it is a BEAUTIFUL house. the shutters are even mounted right.

the gist of the 203k program is most lenders can swing 35 thousand for repairs and roll it into the mortgage. technically you can get more money but it gets a lot more complicated.


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RE: Foreclosure...cheap but in bad shape

I love the quotation at the top of this forum......

Old houses mended,
Cost little less than new before they're ended. - Colley Cibber

It's a truism. This has been a lovely, and likely grand old home in a setting surrounded by like homes. In the time-frame when it was built, it was likely owned by affluent people. I could fall in love with it easily.

Most of the folks on this forum have bit into renovations, because it usually comes with the territory of old homes. You can buy them 'cheap' and renovate them or buy them already renovated but they won't be cheap. There's a reason for that. And.......we buy them because there is something about them we covet, and are willing to make an investment in them. I can't speak for anyone else, but as much as I love the old house I am in now, we could have bought a new-build, and a nice one, for less than what we have invested in this one over the years. So I guess what I am saying is unless you have a very good handle on the cost of bringing a home up to safe and even liveable, you might be treading on thin ice.

I've seen a lot of partially renovated old homes go up for sale or foreclosure where a party has simply run out of that 'repair fund' before they ran out of repairs. Think of it this way........if you add 35K (you mortaged additionally for repairs) to the price of this home in your locality.......what house could you then afford to buy, already in good repair as a starter home.

It all boils down to know as best you can what needs to be done, price the repairs as best you can and then add a cushion to it because they're always more than you anticipate. Then add on what you'd like to do to the house eventually and then decide if you are comfortable with that dollar amount. Just go into it with your eyes open and good luck.


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RE: Foreclosure...cheap but in bad shape

There is so much more than repairing an old home then most people know! DH and I have tackled 3 really old house in need of much repair, we're on the fourth (feeling my age). There is ALWAYS more work than you see, or even your inspector sees, it goes with the territory, and it will ALWAYS be more money than you think! It can get overwhelming times, and stressful. Our last restoration was 10 yrs ago, and I SWORE never again. Since that time, we have built 2 new houses... but it really is our love of old homes, the history, the character and the challenge of restoration... but if you realize this and still want to move forward, good luck, it's a beautiful old house from the exterior!


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RE: Foreclosure...cheap but in bad shape

To the OP:

Just for "scale", our renovations for a 1912 home will easily be twice the listing price of that house and we are doing much of the work ourselves.

"we for sure aren't diving into electric/plumbing/floor support, etc. "

Well, you really need to understand how much that is going to cost then. If you start paying people to redo all the electrical, plumbing, heating etc, you can easily run up a $50,000 bill. That is before you even start fixing all the things you can actually see.


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RE: Foreclosure...cheap but in bad shape

Just a picture is not enough to tell how much work is required.

"We are not DIY people...not for lack of effort but more from lack of knowledge. We would for sure need the help of a contractor."

Expect to pay a LOT if you are not willing to learn and do the work yourself.

In some places even finding anyone who can repair plaster (as opposed to the 'tear it out and drywall' remuddlers) can be almost imposable.

How much will the place be worth after it is repaired/renovated?

Old houses are NOT for the faint of heart (or wallet).


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RE: Foreclosure...cheap but in bad shape

Hi,
I noticed that there are also a couple of other older neighborhood houses on the sidebar of the listing page. They appear to have much higher prices. I would do a little math. Say the object house is selling for $35/sq. ft. Say the comparable move-in ready houses in that neighborhood are selling for $80 sq.ft. That would mean you have a budget of $45 sq ft to rehabilitate before you price yourself above the market. Can you get the place livable for that amount? If you can renovate for even less, you gave yourself a cushion of built-in potential profit. If it would cost more, then it's bad business, but it still could be worth it to you based on other values that are less intrinsic and don't show up on the spreadsheet.
Casey


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RE: Foreclosure...cheap but in bad shape

The listing didn't say what the sq footage was but I'll give you my numbers so you have an idea. DH and I bought a 4000sqft victorian house that was also in forclosure. We have spent about 105K in getting the electric, plumbing, roof, furnace,fireplaces, kitchen and 1 bath done. We did ALL of the work except for the roof ourselves. We could have gotten away with spending about 5-10K less but we went for higher end appliances and such. We had the time and cash for the project and this is the 4th house we've redone. Take your time and carefully consider if this is for you. It does have the potential to be really beautiful. HTH!


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RE: Foreclosure...cheap but in bad shape

Square footage is for buying flooring or commercial space.
It does not mean very much for SF housing.

Kitchens are painfully expensive on a SF basis, while open rooms (LR, DR, hallways) are very cheap.

Even on appraisals SF is only used to adjust for minor variations.


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RE: Foreclosure...cheap but in bad shape

The house looks in very bad condition on the outside. I'd hate to see the inside.

We were first-time buyers too and bought a 100 y/o house that had been extensively rehabbed.

It still requires work, stretches our budget, and can be overwhelming.

If I were you, I wouldn't purchase a house like this as you first house. It can be extremely overwhelming having a house to begin with for the first time, let alone the considerable money and time spent in renovations on top of that.


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RE: Foreclosure...cheap but in bad shape

So with 2 little ones your hubby is going to try to figure out how to "do things", while the kids are taking a nap? Down with flu or cold? Sanding? Any allergies in family? As a newlywed we moved into a $60 rental house with wonderful landlady. The lady that had lived in house for years had died. House had not been painted or anything done for at least 20 yrs. Not up to our standards that is for sure. I spend hours washing down walls, sanding & painting as it was a well built 1920-30's house & I wanted it to look like new. The ceramic tile was 1 in squares on bathroom floor, I can not even tell you the hours I spent scrubbing the grout but it sure looked great after it was done. Same with kitchen countertops. I used Tilex back then & windows open as could smell fumes, not good for kids even tho products have improved. You don't say ages of kids but you can't put a paint can down & go out of room without kid managing to stick their hand in it or worse if they are under 3 yrs old. So unless dad is superdad & great at whipping up lunch with a paintbrush in his hand you are heading for trouble in your marriage. Later we bought a new home but just painting or getting new carpet was a hassle & a half with 2 kids underfoot.I removed all the old carpet & horsehair pad myself(very allergic to it) No money for sitters so kids were underfoot & of course as these things happen, it rained that day so furniture was slacked on covered patio & covered with tarps. Things go wrong a lot on this forum so unless your marriage is super strong & you both love,love, love old homes this could be a fast track to a divorce, especially when money gets short. Buy or borrow a few tools & make a picnic table & benches & see how talented you really are at getting angles right, etc. I've done a lot of things & can refinish old furniture beautifully but I can not put together a simple birdhouse for the life of me!! If you can't do simple things you probably will wish you hadn't gotten into this house. It is very attractive(from a distance). Try replacing glass in an old window someone has around & see how much fun that is. After the picnic table & a window or 2 you may have some idea how it will go. Best if wife & you work on these 2 projects together. If you end up yelling at each other or have a ball doing it that will tell you somewhat what is ahead, as far as your emotions go. Good Luck!


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