First rental purchase, $100k renovations needed

[Elizabeth Bower]

We have sifted through many homes and found one that the numbers make sense. However, it needs a LOT of work to bring it up to snuff to bring in worthy renters. It’s a highly desired area so the market is naturally more expensive in this area. 

The home is a foreclosure picked up by Fannie Mae listed at $259,000. We estimate $100-$115k in renovations. This includes some professional labor for the roof, siding and electrical(whole house- has some knob and tube, minimal outlets, needs hardwired fire alarms).

 The rest is cosmetic maintenance that was never completed... old cast iron tubs with worn caulked seams, peeling and cracking tiled floors, floors that have been wet and need new sub floors, some roof truss work as well as some floor joist work where the previous owner cut two of the joists to plumb the tub. It also needs about 50% of the floors replaced, windows, some drywall, paint repair, new porches and egress stairs attached properly and/ or replaced. 

I’m a bit nervous for our first house as there isn’t a single unit that can be rented immediately. We could have 1 rented after a couple weeks of work, then a second unit after about 8 weeks from the time of purchase. The 3rd and 4th wouldn’t be able to be rented until 3-4 months after the purchase of the house. 

My fear is how much we can afford vs how long this will take to complete. We want to offer $180-$190k but I don’t even know if Fannie Mae will consider our offer at that price, but that’s the price I’m comfortable with considering the amount of sweat equity it’s going to take to bring all of these units back to code and in good condition. 

Should we run? Should we invest? Is this too much work to take on for a full time working couple to bang out on the weekends? 

Last note, anyone have pointers on how to get rid of animal urine smell from concrete. It’s horrid in the basement of this house! 

Thank you for your help and advice in advance!