I thought I was done with rookie mistakes

26 Replies

Homepath contract in hand... so happy.  I want this to be my dream home. Finally got 1 contractor to come in and say "sorry, you'll need 200K to renovate this house".  The next contractor wouldn't even come look. He just emailed me flat out "you can't renovate a 4,000sf house with a $125K".  It does need all new systems, it's 4,000 sq feet, really nice property. Comps support an extra $125K on top of purchase price.

I plan to stay in this house forever, but I only wanted to put in $125K. FHA consultant came in..... said, to bring the house up to FHA code will be close to $100K. I'm so sad right now. I don't want to give up this house.

I should have done better homework.  Would you purchase a huge house with the hopes you would do a complete renovation or should I just walk away.  It needs all new systems, structural work, etc.   SAD FACE!   2/3 of an acre.  What would you do?  Do you think another contractor would say the same.

https://www.zillow.com/homedetails/2612-Talbot-Rd-Baltimore-MD-21216/36628111_zpid/

4,000 square feet is a lot of house, the bigger the project the more unexpected rehab items you are bound to find along the way (especially in older homes)  If your intention is to buy it as an investment I would walk away.  If you intend to live in the house look at what you could get for purchase price plus rehab elsewhere and see if it comes close.  If it comes close or exceeds that price I would probably walk away from that as well.

I know this may be hard but I think you are too emotionally attached to the property. If the numbers don't work, it isn't a deal no ifs ands or buts. IMO the fact that the contractors and FHA consultant are saying the things they are saying should be a huge red flag. Stick to your gut and find a house that works financially and/or on a spread sheet. Especially since you are trying to do an FHA, I don't think you should pursue it any further, if you were going to put in 20% and do a live in flip situation the numbers might work, but that doesn't sound like that is what you want to do. Don't get so caught up on this deal, sometimes the best deals are the deals that you walk away from. Good luck!

Apparently you have not learned to estimate your cost break down. $30/sf probably takes care of flooring, painting. Until we read the inspection reports, structure engineer I would say more than 2X your budget without the appliance.

Take emotion out of the process .  Now its all numbers .  Thats a LOT of house .  It almost sounds like it would be cheaper to level it and build new .   Now if that house is in the city limits , the taxes would KILL you .  

We dont live in our "dream" house . We bought a blue ribbon school district , community pool with pier , slips and club house . The house is OK it serves our needs .  My dream house is a 4000 sq ft garage with a bedroom and kitchen 

@Kimberly H. Not to twist a knife but it looks rough in the pictures.  And pictures are usually a lot better than what things look like in person.  At least that's my experience.  From what it looks like, every...single...surface...floor...room...needs attention.  And it also looks like (on your same block) a decent condition - but smaller - home sold for $170K.  So if you're putting $125K-$200K into a large home it still means you have to basically be given the house for free for any back-of-the-napkin math to make sense.  Maybe a good next-step would be to walk over to 2702 Queen Anne road.  It's a dump that sold for $70K a couple of years ago.  Did the buyers to a complete gut rehab?  Or have them left it to wither and die?  

dream home

SAD FACE

I'm so sad right now

I don't want to give up on this house

If anyone makes these statements, it's clear they are making a more emotional decision than a financial one. I would walk away from any deal that I wasn't thinking clearly.

4,000 sqft!?! how are you going to make money? This is a ton of overhead.

Walk away....... if you think it will cost 125k, it will really cost 250k.....walk away.....

@Kimberly H.   Its been on zillow for  over 4100 days .  THERE IS A REASON FOR THAT .  

That would be a MONEY pit .   $200K would be cheap .  Run    Your heating bill would be over a grand a month .

@Kimberly H.  First, I want to say that I empathise with you 😞

To be succinct, I looked at this property, and I can tell that it's going to cost at least $150k, which I think is super low. We are rehabbing a  project in Patterson Park right now, and every project comes with surprises, which aren't cheap. Our project has its own surprises. 

Now, let's break this deal down a little bit, so let's assume, for a sec, that this was a new build, right? The  cost-to-build is between $100-$125/sq.ft., so this project, as a new build, would cost between $400k-$500k. Taking into consideration that the median house value in Windsor Mills, MD is $154,300. Obviously, your project isn't a new build, but this might be an approach for you to consider in some cases (especially if this project needs all new systems).

Moving from this deal into mindset; remember that you started (many never do), so all you have to do is find another deal and keep this momentum going, so please don't dwell on this property just keep going and try your absolute best not to make the same mistake again. You use as a learning experience/outcome. 

When we stop learning, we die.  

Hope this helps, Kim. Goodluck. Thanks! - Ola 

Thanks guys so much. I really appreciate you giving me your honest opinion.  I got the feasibility study back today and it doesn't look good.  The numbers don't make all that much sense to me, but again.. I'm emotional about it. My husband and I wanted a forever home and it really was perfect for us. In the city, 3/4 acre, largest house in Windsor Hill and the 3 blocks around it are gorgeous! 

Originally posted by @Ola Dantis :

@Kimberly H. First, I want to say that I empathise with you 😞

To be succinct, I looked at this property, and I can tell that it's going to cost at least $150k, which I think is super low. We are rehabbing a  project in Patterson Park right now, and every project comes with surprises, which aren't cheap. Our project has its own surprises. 

Now, let's break this deal down a little bit, so let's assume, for a sec, that this was a new build, right? The  cost-to-build is between $100-$125/sq.ft., so this project, as a new build, would cost between $400k-$500k. Taking into consideration that the median house value in Windsor Mills, MD is $154,300. Obviously, your project isn't a new build, but this might be an approach for you to consider in some cases (especially if this project needs all new systems).

Moving from this deal into mindset; remember that you started (many never do), so all you have to do is find another deal and keep this momentum going, so please don't dwell on this property just keep going and try your absolute best not to make the same mistake again. You use as a learning experience/outcome. 

When we stop learning, we die.  

Hope this helps, Kim. Goodluck. Thanks! - Ola 

Thanks so much for this.  "When we stop learning, we die". :)

@Kimberly H. ,

Hi! I am an "old house" person and I love that house too. But. I wouldn't buy that unless I had a partner and both of us had very strong handyman skills and we were looking at that as a twenty year committment.

Both my husband and I grew up with parents that were DIY renovators (and of course they pressed all us kids into service)-- so we are both very handy. My parents redid an old 1880's era house throughout my entire childhood; it still wasn't finished when I moved out! I can competently and without assistance paint, lay tile, finish drywall (if forced), strip and finish wood work, and  wire up outlets and light fixtures. In addition, with instruction, I can do many other things and my husband is WAY more skilled than me. (Shoot! My 74 year old mother just helped us out on a renovation and she is better at hanging trim than many "trim carpenters")

Having said all that, that is an AWESOME looking house and if I was thirty and my partner  thought it was the perfect house too, I'd consider it.

I don't think it would ever be cost effective to hire out that reno. Carefully consider what you LIKE to do and if you want to spend most free moments doing "home improvement." Most of my friends think I'm crazy.

Without reading the other replies I would suggest getting creative. It's a beautiful home. One that your kids and grand kids would love to comeback to when they get older and possibly take over. 

It may not be much of an asset, but you can trying renting spaces to friends and relatives to limit the liability of it in the long run. Seems like a huge place :)

Hope that's some encouraging words

Duane

Originally posted by @Duane Smith :

Without reading the other replies I would suggest getting creative. It's a beautiful home. One that your kids and grand kids would love to comeback to when they get older and possibly take over. 

It may not be much of an asset, but you can trying renting spaces to friends and relatives to limit the liability of it in the long run. Seems like a huge place :)

Hope that's some encouraging words

Duane

 Thats exactly why we wanted this place.  3 grands and just a beautiful location.  House on the hill.

Originally posted by @Jill F. :

@Kimberly H. ,

Hi! I am an "old house" person and I love that house too. But. I wouldn't buy that unless I had a partner and both of us had very strong handyman skills and we were looking at that as a twenty year committment.

Both my husband and I grew up with parents that were DIY renovators (and of course they pressed all us kids into service)-- so we are both very handy. My parents redid an old 1880's era house throughout my entire childhood; it still wasn't finished when I moved out! I can competently and without assistance paint, lay tile, finish drywall (if forced), strip and finish wood work, and  wire up outlets and light fixtures. In addition, with instruction, I can do many other things and my husband is WAY more skilled than me. (Shoot! My 74 year old mother just helped us out on a renovation and she is better at hanging trim than many "trim carpenters")

Having said all that, that is an AWESOME looking house and if I was thirty and my partner  thought it was the perfect house too, I'd consider it.

I don't think it would ever be cost effective to hire out that reno. Carefully consider what you LIKE to do and if you want to spend most free moments doing "home improvement." Most of my friends think I'm crazy.

 Well said Jill....the project is not for us. 50 and ready to enjoy life, not tackle a life long proeject. It saddens me, because it could be a great house. So much potential. 

@Kimberly H. , at what price does this home make sense? Run your numbers and make an offer based on those numbers. 

But before you do that, watch the movie The Money Pit with Tom Hanks and Shelley Long. 

What a big, beautiful house! If you do want it that bad, can you do half of the work to make it livable and then do the rest later? Would you really have to use the 3rd floor or much of the basement? Can you leave those for later? How much of the work could you do yourself? I live in a 100 year old house similar to that, and one big concern for us is lead paint. That would be a concern if you are working in it later while also living in it.

Originally posted by @Jennifer Rysdam :

What a big, beautiful house! If you do want it that bad, can you do half of the work to make it livable and then do the rest later? Would you really have to use the 3rd floor or much of the basement? Can you leave those for later? How much of the work could you do yourself? I live in a 100 year old house similar to that, and one big concern for us is lead paint. That would be a concern if you are working in it later while also living in it.

Two contractors will not touch it for 125k. Thats what I originally proposed. 2 floors only, blah blah!! Losing all hope.