Hoarder house first deal
Hey everyone! It’s been a long time since I’ve posted on the forums. I’m wrapping up my first deal to put on the market.
How I found this deal: I posted an ad on Craigslist targeting a local area for back taxes, foreclosures etc.
I got a reply from a distressed seller who was about to lose his house in 10-14 days due to back property taxes. The sellers owned their house outright.
They had bad credit and couldn’t just get a loan to pay off their taxes. The sellers said they had the title in hand but weren’t able to find it. So now a title had to be built which can take up to 7-14 days or so depending on different scenarios (I’m not an attorney or a title company, so check your local regulations) So now I had to get creative to buy time. I have a hard money loan for this deal. I talked to my lender about lending them enough money to pay their taxes to buy us time to complete the transaction. He agreed that would be possible so he had his attorney draw up paperwork and paid the back taxes and made the loan subject to the house being sold to me. Title came back after a couple weeks and then we went to closing at my hard money lenders attorney office. The sellers were having a hard time finding a new place to live in such short notice that I offered them ten days after closing to be able to move.
I took possession of the house. OMG! They left everything! Let the cleaning begin! This house was packed full in some rooms that you couldn’t open doors. I started on Day 1 by myself. It was overwhelming!
So this house is in a smaller town in Iowa. (It’s about a 40 minute commute for me one way to drive here. ) I called around to the waste management company’s and none of them had a big dumpster (40 cubic yard)for at least a week or two. So I had a smaller one (4 cubic yard) delivered to get started on tackling this mess. That took no time to fill. I hired Craigslist help to help clear the mess. Until the dumpster arrived I told them to pile it in the back yard (p.s this won’t make your city happy, but if you’re nice to them, they will play nice back)
I filled up the 40 cubic yard dumpster easily and kept the smaller dumpster and have had that emptied several times.
Eventually with enough help from friends and Craigslist help I got it cleaned up.
Next I put in a new Electrical panel. I’m an electrician. So I pulled permits with the city.
Then I removed all the knob and tube and reran everything in Romex. That task wasn’t very easy. As you might guess, this house is old. 1914 old. Plaster and lathe still everywhere. I wall fished a lot of romex and coax. I subbed out some things. Flooring in the kitchen is LVP. Painting is a must to sub out. I didn’t sub out drywall for the ceilings. I hung 30 sheets of drywall (4’x8’x 1/2”) on the main floor ceiling with a drywall lift by myself. I mudded, taped and textured everything. I can do it but this was the first time doing it at this scale.
I reran a lot of plumbing with pex for the main floor through the basement.
Throughout the house is small strips of oak flooring. Main floor has quartersawn oak and upstairs has regular oak. I used a drum sander and sanded what I could. All the boards were cupped. Old Shellac and wax finish that I sanded off. Lots of hours sanding. Then I distressed the floors using vinegar/ steel wool mixture. Take one gallon vinegar and some heavy gauge steel wool and mix them together. Let them react for overnight. It really depend on how dark you want the distressed to be. I let it sit for 8 hours or so before I wiped it on the floors. When it dries it gave a greyish tint. If you let the mixture set for 3 days then you will have a charcoal color of flooring. Then polyurethane. 2 coats of polyurethane.
I have spend many hours working on this house. I have put a ton of sweat equity into this property.
I have tons of pictures uploaded to my Facebook- Kharmarelic Investments. Please check them out. I haven’t updated my website in awhile. So I will get a blog posted on there. Start updating stories.
Purchase price is $38,500
Rehab is $35,000
Hard money loan points
Insurance is $1600 for the year
Electric, gas, water bill was $1000+
Property taxes- $2,600
Arv $160,000
Profit- TO be determined
Lessons learned- priceless
My first deal is about to be under my belt.