I am new REI in Houston TX and I am currently under contract for my first major rehab project.
Project: SFH: Its a 1400 ft2, non-flooded , single story ,3 bed 2 bath, 1983 built in clear lake TX area zip 77062. It is a hoarder house with 6 ft hole in roof. Seems like this house has been neglected for quite a while. Below are the details for house.
Purchase price : $80K
Major Rehab: $50 k
Rent : $1600/month
Rehab: Based on quotes I received from 3-4 contractors: new roof, foundation fix, sheet rock, new flooring, landscaping, new bathroom, kitchen, siding. Its a full rehab work.
Question : Since this is a hoarder home, its not possible to see walls. Is there a possibility of structural damage ( stud rotting) due to rain pouring in through hole in roof? 1 of the contractor brought it up.
Any other damage , which I am missing?
I would like to hear from someone who has worked on hoarder homes and/or big hole in roof.
Thank you in advance for help!
Lots of dumpsters and dump fees
Wow, definitely a hoarder house....Get rid of all that junk and you’ll have a better idea of what your dealing with! Make sure you have some extra $$ budgeted in for surprises...
Wow must be hard up to buy property in your area . You’d pay 80 grand for this ? An exposed roof left like that can destroy a house in short time . I’ve seen foreclosures like this before and it wasn’t pretty . The bank practically gave the house away . You think only 50 grand for rehab .. . It always costs more to rehab than you think it will . Even if your correct your only barely hitting the one percent rule which sucks anyways . Wouldn’t waste my time money and effort on this one .
This is a bad deal...you should try to get out of it asap.
This may be a complete scrape. No way to know until you get that junk out and some (or all) of the sheetrock off. I would not assume this is just a matter of a fixing the sheetrock. Your pictures show the sheetrock has fallen off the ceiling. That indicates significant water in the house. Water is deadly for structures. If there has been a lot of water in there its likely to have made its way inside the walls and damaged studs. If that hole has been there any length of time its very likely you've had significant amounts of water inside, given Houston's weather. Further, given the heat and continuing dampness its likely there's mold. Now, I think mold fears are overblown, but its a real issue when you go to resell.
If you're stuck with this house, get the garbage cleared out and start tearing off sheet rock and see how bad it is.
Thanks @Jon Holdman , @Jeph R. , @Dennis M. for your feedback. As a novice REI, I thought everything can be fixed for a right price. Before I put non refundable earnest money to whole seller, I got a rough estimate from GC for $50k, which also matched with whole seller estimate. I got 3-4 rehab quotes ranging from 50k - 75k. However, non of quote mentioned about structural issue.
I guess I ll walk away from this deal.
Question: Do any of you think, this property can be fixed and this will be tear down and build up from ground zero. The reason I am asking , if whole seller come back with counter offer (which is highly unlikely), is it worth considering it.
Anyway thanks again everyone and BP for providing feedback.
Are you able to do a careful inspection yourself? If you can move some of that garbage around and get a closer look at the walls you may be able to get a better idea of the extent of the damage. How long has the house been in this condition? If that hole has been there for weeks or months and you start pulling stuff away from the walls and water starts dripping out of the garbage you shoudl assume its soaked into the walls. If there's no rot, it is possible to pull out the drywall and insulation and dry the place out. That takes getting the roof fixed, the AC running and probably putting in some dehumidifiers and running them until the wood measures below a reasonable humidity. Local building inspectors can tell you what is reasonable in that area. This will take time, perhaps a few weeks. Then you can start rebuilding. You would also need to mitigate any mold.
Well It’s not that something like this can’t be brought back to life and turn out to be a great investment . But There has to be some good incentive though like it’s in a really hot area that’s appreciating off the charts or an oceanfront or a resort lake . There’s a guy on here that rehabbed one like yours and flipped it for several hundred thousand in profit . You are only able to muster up around 1600 in rent for such a house which tells me that it probably isn’t enough to warrant the time trouble and expense but I could be wrong
If you are paying "lot cost" for and still need to pay money to clear the lot....then you are starting out in the negative.
Not a good way to start.
The water from the huge leak in the roof is what will cause a lot of the problems. I'd also expect some subfloors to need replacing, potential mold remediation, and a lot of dump fees! I'd estimate $50-75K, just because the roof alone will likely be $10K because some of the frame might be rotten too.
I'm dealing with a similar hoarding situation now.... don't be afraid, just get to work! It's just stuff... stuff can be removed!!
This is a hell of a project you chose for your first.
Thanks @Linda D. and @Jon Holdman for your feedback. Last week, GC did structural inspection in living room (where roof hole present). He did three random spot check of studs by removing garbage and Sheetrock. All three spots were dry. GC feel confident with no structural damage.
As far as rehab budget, we have already included new roof, with some rafter replacement, new Sheetrock ,mold remediation, new flooring etc. We have budgeted for everything. More over this house is non-flooded home. I was wondering what is more detrimental to structural: standing water for couple of days or rain pouring in over months?
Is there anything I am missing in inspection to feel comfortable moving forward. Please let me know, I still have end of this month to close. thanks
Hello! Just wanted to follow up to see how your rehab is going? Did you end up closing on this property?
Not yet @Kalyanii K. . Its closer to end of this month. Its definitely a challenge. As 10X rules state that" its always take 10 time more effort than what you think" Will let you know, what I decided? thanks for checking.