Historic Home; Should I or Shouldn't I?

Question

So, I haven't yet acquired a deal for Buy/Flip; yet I have come across a pre-foreclose that is a part of the city of Tualatin's Historical Society. It was built in 1890. Talk about a difficult home to conduct a Comp on for an ARV! (especially for a newbie).

I have attached the photos. I am trying to debate even taking the time to walk through tomorrow afternoon.

My question to all experienced investors: would you recommend trying to acquire this property as a first time investor? (ask is $234K, median sale price in the city is $416K)

Thanks!

Tyler Resnick · Answer

Absolutely not! You need to do a search on BP and read some of the disasters people have posted regarding restoring historic homes. They can be a horrific nightmare that can sink you all because someone on the commission is drunk with power, inflexible and/or unrealistic with their expectations. Please be careful, really careful, before you pursue this.

Shelley F. · Answer

Well (putting on my armor plate and picking up my bow) Im going to have to disagree with most of you. Especially about older houses. These are my forte (Got my primary residence this way). This doesnt look like its on the register so discard that...and its interior has been 'updated' ...I would go for it. In my experience these older California houses were build out of redwood...and tend to be 'overbuilt" . Depends on the state of the wiring and the plumbing. Me? would buy this in a heartbeat...trick it out...buyers love this old stuff and you just cant duplicate it new. Feel free to pm me...Loading up my flamethrowers now...

Ryan Murdock · Answer

@John Williamson I think a little more info is needed here. I'd find out what the actual restrictions are versus what you intend to do with the property. Many times historic preservation committees are only concerned with the exterior appearance of the building, meaning you may not be allowed do things like add onto the structure, use vinyl siding, and you may be limited on the style of doors and windows that can be installed, etc. I've also seen them take issue with the attempted placement of propane tanks (only allowed so long as they are not visible from the street - that kind of stuff).

If the existing restrictions don't interfere with anything you plan to do anyways, no big deal. If you're obligated to get historic committee approval for interior modifications that's a whole different animal but judging from the pics the interior has been updated already so I doubt that's the case here - but make sure.

Regardless, do your homework BEFORE you purchase so you know - with absolute certainty - what you'll be up against.

Mike Reynolds · Answer

It depends on if the  house is listed on the register. Do you plan on keeping it there? If so then not a chance. If it's not on the register then it's like any other house.

Sam Shueh · Answer

I call it a tear down.  Value lies with the land not the home in CA.

Brandy Summerlin · Answer

I wouldn't touch it. Most historical societies use the Sec. of Interior guidelines as their gold standard. The historical society  can dictate structural work, paint colors, things that change the appearance of the front of the home (including new energy efficient windows, etc), and in some districts even the landscaping. Run fast and far, my friend.

Tyler Resnick · Answer

Hell on Earth: Flipping in a Historical District

By @Alex Simon is a must read forum post for anyone considering buying a historic home. Be warned, this is not a easy read for a Investor. It is like watching a prolonged torture scene in a movie.

Annetta B. · Answer

Actually looking at the picture again I think it looks better then I thought. You'd really have to get an inspection done and figure out if that old wood is rotten. Lots of surprises in older houses that you can't see even with an inspection. I still think historic houses should be fixed by people who just love old houses and for their personal project.

Annetta B. · Answer

I'm no expert but I am in the middle of renovating a house that was partly over 100 years old. Houses built over 100 years old were sometimes built very well but sometimes they were thrown together as sort of temporary houses for workers and built from scraps they could salvage. This house in your picture looks small and not intended for the long run I don't think. I'd want to see whats under the dry wall at least. The stairs look pretty good and the foundation ok but the roof looks weak. Are there any crooked walls or sagging?

I don't think historic houses make good fix and flips. They end up costing the same as an average new house. In the long long run some of the well built ones I think are worth it but not the little "worker" houses. It also really depends on location. If the location is worth the fix then it might be worth it in the longer run. But also i don't think anyone should cheap it on a historic house.

If its officially designated historic that can get very complicated in some locations.

Historic Home; Should I or Shouldn't I?

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