What are the main concerns when rehabbing 120 year old houses?

Rehabbing & House Flipping
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What are the main concerns when rehabbing 120 year old houses?

Daniel Vernon
Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes

Looking into a deal on a house built in 1899. 3 bed 1.5 bath for $155,000, tons of value add potential, and right in the middle of a rapidly growing western Colorado neighborhood.

Wondering if anyone has any insight on a deal like this?..

Thanks!

- Daniel

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Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
5y

I invest in these old houses.  Look at the foundation and wood.  The old wood turns hard as iron---if it is not termite damaged, then it can turn to sawdust!  

Look at the foundation, flooring joists to see if they are ok or can be sistered if they are not.  Know that sometimes the roofs are not typical, 2 of mine did not have a plywood type of layer on the surface.  The roof was made up of 1 x 3's.  If multiple story, look at the walls and see if any fell.  It is not unusual for a wall to slip. They are hard to put back up on jacks.

Look at what the electrical system is made of, all of it.  Its not unusual for someone to update apart but leave a section of old aluminum wire, etc.  

Do not expect to be able to put HVAC duct work in the house if it has a series of add ons--the attics and crawl spaces will have areas that are blocked.

Asbestos and lead based paint will be throughout the house.  Be able to recognize what things have asbestos so you do not expose yourself to it or cause it to fray.

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  • Bryan Balducki
    Real Estate Agent · Denver, CO · Member since 2019 · 161 posts · 176 votes
    5y

    @Daniel Vernon I am an investor in Denver and know the West side very well as I have a couple properties located there. The main concerns with a house built before 1900 would be structural and sewer. I’ve had to terminate due to both issues on an older house built around the same time. If you have experience with a full rehab and curing structural issues, could be worth it for that price. May I ask what area it is located in?

    3Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    I invest in these old houses.  Look at the foundation and wood.  The old wood turns hard as iron---if it is not termite damaged, then it can turn to sawdust!  

    Look at the foundation, flooring joists to see if they are ok or can be sistered if they are not.  Know that sometimes the roofs are not typical, 2 of mine did not have a plywood type of layer on the surface.  The roof was made up of 1 x 3's.  If multiple story, look at the walls and see if any fell.  It is not unusual for a wall to slip. They are hard to put back up on jacks.

    Look at what the electrical system is made of, all of it.  Its not unusual for someone to update apart but leave a section of old aluminum wire, etc.  

    Do not expect to be able to put HVAC duct work in the house if it has a series of add ons--the attics and crawl spaces will have areas that are blocked.

    Asbestos and lead based paint will be throughout the house.  Be able to recognize what things have asbestos so you do not expose yourself to it or cause it to fray.

    8Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Bryan Balducki

    Its in my home town. Its walking distance from a part of town that is being heavily developed with new restaurants hotels and big office/warehouse buildings so I see really good potential. New sewer, new roof and its been on the market for quite awhile so they're probably motivated to sell..

    0Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Lynnette E.

    I'll all of that in mind, thank you very much!

    0Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Bryan Balducki

    Do you have any advice when it comes to creatively financing this kind of project? I'm 22 and only have one property under my belt using FHA.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Daniel Vernon that is actually 132 years old. This list of potential problems is long. Building code didn't exist, so you could end up with major structural problems. People assume "it is been there 100 years so it isn't going anywhere". The problem with that logic is every 100 year building that ever had structural issues, was fine for 100 years. You won't know what you will find until you open the walls. You also have to worry about what people did over the years. I had a duplex built in 1880 and when we took out the bath tub, we found that two floor joist were cut out for drain pipes. Under a tub that is very dangerous. It also had a rubble foundation that was falling out on one side of the property. I would never buy another property that old.

    1Reply
  • Forrest Williams
    Real Estate Agent · Chicagoland · Member since 2018 · 314 posts · 199 votes
    5y

    I would check out the wiring for sure. It could be copper (good), aluminum (not great), or knob and tube (terrible). If it's knob and tube you'll probably want to replace it. If you are thinking about adding AC or other modern amenities, you'll be spending a lot of money. The walls may be plaster as well, which you can repair and touch up yourself, but it is a lot of work and not very feasible. Better to hire a pro.

     @Daniel Vernon If possible, can you live in the house while you flip it? That's a great way to get access to properties with a lower down payment aka House Hack. I've done several, and it's my favorite way to build skills and value.

    1Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    I could write a book on concerns regarding an 1899 single family in the Pittsburgh area, but I'm not sure I'd be as useful writing about a property of a similar age in western Colorado.

    0Reply
  • Dena Puliatti
    Property Manager · Huntsville, AL · Member since 2017 · 302 posts · 246 votes
    5y

    I LOVE old houses.  Definitely budget for new plumbing in the coming years, and check the electrical. I had a house that was knob and tube, and I couldn't insure it until electrical met code.

    1Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Forrest Williams

    Definitely good insight on the wiring, thank you! I know some pros and have dealt with the dreaded plaster and lath a couple times before 😂

    0Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Forrest Williams

    Well I'm trying to find a deal for my uncle currently. I'll earn a little sweat equity on this one but im already house hacking a tiny tri-plex!

    2Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Dena Puliatti

    Your enthusiasm motivates me!

    Thank you, I'll keep that in mind!

    0Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Jim K.

    Its a pretty dry climate so the bones are usually good, the studs are usually better then the modern ones! Foundation and financing are my main concerns..

    0Reply
  • Forrest Williams
    Real Estate Agent · Chicagoland · Member since 2018 · 314 posts · 199 votes
    5y
    Originally posted by @Daniel Vernon:

    @Forrest Williams

    Well I'm trying to find a deal for my uncle currently. I'll earn a little sweat equity on this one but im already house hacking a tiny tri-plex!

     Then you're off to a great start already!

    1Reply
  • Brett G.
    CO · Member since 2018 · 69 posts · 52 votes
    5y

    @Daniel Vernon

    At only $155k in Ouray, and has been on the market for a bit, I would definitely want to know a little more about the condition of the house. I would get a thorough inspection of the property to see if it is worth my time, effort, and investment.

    Things that 'may' need repaired or replaced on an old house: Everything. Inspect it and walk it with your contractor.

    With older houses, you have to do a little more due diligence before you make your final offer or close.

    1Reply
  • Daniel Vernon
    OP
    Contractor · Montrose, CO · Member since 2019 · 12 posts · 4 votes
    5y

    @Brett G.

    I will definitely keep that in mind, thank you.. My bad on the location clarification, its actually in Montrose lol that would be outrageously low for Ouray forsure! 😅

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    5y

    We just canceled a contract on a home built in 1910 for a plethora of issues including windows, roof, nesting animals in the attic, deck about to fall apart, Garage roof unable to inspect - looked terrible from outside, sagging gutters, not-obvious water intrusion, sagging ceilings, outdated electrical.

    Get a home inspection.

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    BiggerPockets
    1Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Daniel Vernon running out of money...that and ghosts.

    937-979-7000
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  • Paul Skikne
    Flipper/Rehabber · Los Angeles, CA · Member since 2015 · 14 posts · 11 votes
    5y

    Expectation of buyers in the area as it pertains to the condition of the foundation when you resell. In my area, I have bought and resold older homes with minor foundation repair/upgrade because thats what buyers in the area are willing to accept in relation to the charm and character of an older home, however in other areas where older homes like this are not that prevalent, buyers will have completely different expectations as to foundation condition and you could be looking at major upgrades to repair foundation including replacement, or adding sister walls. I am in Los Angeles with a lot of old/period homes with masonry or brick foundations. Either way you could be in for an expensive line item. If you are not experienced I would steer clear of homes that old.   

    0Reply
  • Janet Behm
    Accountant · West Jordan, UT · Member since 2017 · 182 posts · 95 votes
    5y

    Daniel, 

    We just moved a tenant into a full gut remodel on an apartment in our 1921 ( 100-year old building) duplex over the weekend.

    You can not know all of the problems that may arise. Our building had dropped about 4" on the east side so our contractor had to raise the floor (like raising the dead) to make it level for the Luxury Vinyl Tile.

    The final deal was over double our original budget.  In for a penny, in for a pound.

    Oh, BTW, the apartment is beautiful, fresh, and nice.

    Good Luck, Janet

    1Reply
  • Mike B.
    Rental Property Investor · Madison, WI · Member since 2020 · 91 posts · 71 votes
    5y

    From my experience the home building industry didn't really become standardized in any way until after WW2, so that homes built prior to that can vary wildly.  Homes of that age in my area tend to have stone foundations and many that I've seen have the joints crumbling which needs to be addressed. I'd also keep an eye out for how the house was framed.  One of mine is "balloon" framed, and while there's nothing wrong with that method per se, it led to some issues with sagging and bowing of walls, floors and headers.  Sometimes you can tell by noticing little gaps or separations at stairs, baseboard trim, door framing etc

    0Reply
  • Jon Goehring
    Bloomfield, NJ · Member since 2020 · 3 posts · 0 votes
    5y

    @Daniel Vernon

    Plaster, a lot of plaster.

    0Reply
  • Mohammad Nur
    Member since 2019 · 51 posts · 18 votes
    5y
    Originally posted by @Mindy Jensen:

    We just canceled a contract on a home built in 1910 for a plethora of issues including windows, roof, nesting animals in the attic, deck about to fall apart, Garage roof unable to inspect - looked terrible from outside, sagging gutters, not-obvious water intrusion, sagging ceilings, outdated electrical.

    Get a home inspection.

    You are pretty much describing the current house that I am under contract. We did negotiate some repair cost but I have a feeling that I will have to spend a ton to fix all the issues. 

    1Reply
  • Michael Ablan
    Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Daniel Vernon  - We rehab these types of houses all the time (upstate NY).   I'm just going to make a list

    1. 1.) Knob and tube wiring in the walls.   All of your exposed wires in the basement/attic might be updated and new, but there's likely junction boxes hidden all over the house.  There's nothing worse than having an electrical issue thats sourced to a junction box buried behind sheetrock (which spiderwebs to 4 different rooms in the house).

         2.) Old cast iron drain lines.   These are usually at the end of their life and require replacement (make sure to have someone send a camera to see the health of the underground sections)

         3.)  No insulation in the walls (all the blown-in has settled to the bottom of your wall cavities)

         4.) Old wooden windows that have been leaking for years (resulting in rotten frames, walls, ect)

         5.)  Foundation issues that were saved too late (resulting in sloped floors, making everything in the room off square).

    I could go on for awhile.   Just assume your rehab numbers are off by 15-20% and your timeline is 1 month too short

    3Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    @Daniel Vernon - we deal a lot with this in Milwaukee, which had a huge boom in the 1900-1920s. For the most part these houses were very well built and have great bones, but there are exceptions and I can usually tell right away when I walk into a bad one.

    What can kill you on a project like this is the length of your to-do list. Everything is fixable, but at a cost. Ever walked out of a grocery store and wondered what you bought for $160? Nothing expensive, just many items. 

    You can look at a house the inverted way: what are the things I don't have to fix? What is good and newer? Roof, windows and siding are new? That's great, because that might be 40-50k right there.

    If the house is bad, but the location is good, it might be worth it to bulldoze and build a new one in it's place. In this case look at land value minus demo. We start to see this in some of our top neighborhoods, where the best lots were sold in the 50s and people built small houses on them, but it's usually not easy to buy it cheap enough as long as they are habitable.

    1Reply
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