Rehabbing Older Homes

13 Replies

Hello BP Community - I am a new investor looking for fixer upper deals. I have found a few older homes built in the 70s while driving for dollars, and today just found something on the MLS built in 1936 that I may investigate. Is this too old, or worth exploring?

I am curious to know: how do you feel about older properties? Is there a general threshold you go off of for how old of a property you would consider? Any other insights/experiences about this would be greatly apppreciated. 

Let me start off by telling you that I live in Pittsburgh PA, where we have houses built before the Civil War. The older houses have some added challenges, like knob and tube wiring and terracotta sewer lines, but the age of the house is irrelevant.  It is the the relationship between you all in cost (purchase, holding, and renovation) and the sale price that matters. Dont overlook the old houses, investigate them and see what the math tells you. 

I have remodeled many of Pittsburgh’s older homes. They can be challenging. Knowing what you are getting into is a great help. The demo process with plaster lathe is filthy and produces a great deal of debris. The older plumbing can just disintegrate in your hands at the slightest touch. Running new wire to replace knob and tube, cotton jacketed, or NM can be tiring. Oh, and the terra cotta pipe. All these obstacles can be opportunities. I always have a sewer camera inspection done before I buy. If they look bad I ask for a reduction in price. The other stuff requires planning and if you have a contingency budget in your rehab plan everything will go fine. 

I personally like to older homes in worse condition or homes with structural problems. I have a background in construction. Those larger scopes of work are profit makers for me in the ARV.

@Brian Sylvester - seems like we have similar housing stock - Milwaukee has expanded a lot in the 1920s and in the 1960s and houses have been built very differently in both periods.

1920s homes are usually beautiful with tons of architectual details and curb appeal. The basements were often hand dug and therefore shallow, basement walls made from brick, stone and concrete, sometimes a mix and usually damp, no sump pump, old electrical and hard to work on, old plumbing system, plaster walls with cracks, only one bath, tiny closets, smaller bedrooms, tons of millwork - sometimes original, often with 5 coats of cakey white paint, doors and windows often built on site and custom sizes, so you can't go to HD and pick up a new door, it won't fit. Rehab tends expensive, especially if done well and true to the style.

1960s built homes have the curb appeal of shoe box (just not pretty), but they are every easy andcost efficient to work on. Cinderblock basements with a sump pump, modern style electrical and plumbing, more closet space, larger bedrooms and more open layouts, standard size doors and windows, 2X4 wall construction and drywall instead of plaster. Rehab is a lot easier and cost effective.

I like BRRRR-ing SF homes and have done that for over a decade; all of them were built in the 1960s, most of them the same floor plan and layout, so we have prettyb much a system and a material list that we use for the majority of the work, which really cuts down on planning, picking and choosing - fewer decisions to make.

I prefer properties in the 60's and newer.  But I have done a few deals that were built in the early 1900's.  You will just need to budget more for expenses and expect to pay more for rehabs.

Originally posted by @Josh Caldwell :

Let me start off by telling you that I live in Pittsburgh PA, where we have houses built before the Civil War. The older houses have some added challenges, like knob and tube wiring and terracotta sewer lines, but the age of the house is irrelevant.  It is the the relationship between you all in cost (purchase, holding, and renovation) and the sale price that matters. Dont overlook the old houses, investigate them and see what the math tells you. 

Thank you for this advice, Josh. Wow- pre-civil war :). You said what my gut feeling was, that I shouldn't overlook something based solely on the age of the home. 

 

@Marcus Geiser great insights and many thanks for sharing. I'll keep that in mind about the sewer camera inspection. I have no experience at all in construction but slowly learning. But I do see the potential profits with the places that nobody wants. 

Here is a picture of the oldest house I ever worked on. It was a basket case. The were 7 layers of roofing. We tore the roof off the house and demo’d the entire structure to the facade you see here and 8 feet on each side. I poured the new foundation for the addition of 2500 SF in the rear, framing, layer some block, and other work for the first half of the project. The place turned into a Mexican War Streets beauty. 

Here is a link to the finished project when the investors I worked with on this one completed the project.

https://www.zillow.com/homedetails/110-Sampsonia-Way-Pittsburgh-PA-15212/11388591_zpid/?

Oh, if you look on the Allegheny County assessment site you can see the home sold for $45,000 and later for $355,000. This is how I began to analyze deals. Work for investor. Look up info on house and see the bought and sold price, factor in my work as contractor, and I could see the profit potential. 

I live in a house that was built in 1846. In the Pittsburgh area market, as Josh had mentioned, most structures in Pittsburgh were built in the early/mid 1900's and that leads into why investing here is a no-brainer. You can easily buy low, and rent high in comparison to other cities. Granted with older homes, typically meaning more issues, but that does not mean that they are to be overlooked. When looking at these older homes, look at the structure rather than the finishings. Look for caving walls, water damage, old wiring, old HVAC systems (typically boilers in this area/age range) and a solid roof. 

Originally posted by @Brian Sylvester :

Hello BP Community - I am a new investor looking for fixer upper deals. I have found a few older homes built in the 70s while driving for dollars, and today just found something on the MLS built in 1936 that I may investigate. Is this too old, or worth exploring?

I am curious to know: how do you feel about older properties? Is there a general threshold you go off of for how old of a property you would consider? Any other insights/experiences about this would be greatly apppreciated. 

 Regularly deal with 100 year old housing stock out here in Cleveland. It's the norm so nobody thinks twice about it. What's the norm in your hood? I'd probably avoid buying older than the norm.