I was waiting to make my second post based on whether or not my offer was accepted on a complete gut job. I either needed to find some hard money lenders OR learn how best to handle a foreclosure where almost everything needs work. Well, the bank accepted my terrible offer on their terrible house so now I need some help on what I should do next...
It was listed for 32k and I bid 25k. We wound up at $27,500 and after closing, etc. I should be able to buy the monstrosity for around $29,000 total. The comps in the area are between $110,000 and $130,000 but I plan on a live-in flip where I'll live in it (once livable) for at least a few years and then see where the market is to decide to sell, rent or get a roommate. It needs between $35,000 and $60,000 of work depending on many factors. That wide range is because certain things are in such bad shape (leaky roof) it's not clear how bad the damage is throughout until I can get some estimates. Chattanooga, TN isn't an expensive town so I'm hoping a number of the things I budgeted for will be cheaper than I expect but it could go the other way too.
All of it. The house needs a new roof, new/replaced electrical, new HVAC, new kitchen, new flooring throughout and so much more! I can do all interior work myself excluding anything that must be permitted (this ain't my first rodeo) but this is an overwhelming amount of work that I need to prioritize what comes first and what work is best contracted out. It still has good bones or I wouldn't have bid on it at all. I also wouldn't have minded not getting the house :P but the math checks out so it's not a bad deal. Just a TON of work.
In the case of the live-in flip where I'm not in a huge hurry to finish the house, what should come first? I'm paying cash so there's no carrying costs and minimal utilities/insurance/taxes ($250 or less). The roof is a must since its leaking in several places but after that it's kind of up in the air. What can/should I do and in what order? What things should I let a contractor manage? What kinds of things would you guys do to efficiently get this thing "live-able"?
I guess my priority is to save money so advice like 'HVAC work is cheaper in the fall' (I have no idea if this is true) might be something useful to know. Or 'don't do any plumbing yourself or the inspector will eat you' would also be nice to know.
What do you guys think?
We are doing a live-in-flip total gut, but we have a carriage house where we're camping out until the main house is livable again. Definitely do roof first so no further damage is done. Are you bringing it down to studs or keeping existing drywall/plaster? If you are going down to studs, all your M/E/P will be less expensive because they have full access. But then you have to drywall the whole place. If you have drywall skills, then that's great. But, I'd do all that stuff first, then work on cosmetics. To get it livable, all you need is working and safe MEP, a roof, and some drywall on the walls. If you can finish drywall, you could literally just hang it, and move in. Finish it room by room. Not a fun way to live, but that gets you in the house fastest. Without knowing the complete list of what you need to do, that's the best advice I can give.
You both have solid points. It's somewhere I would be willing to live but the idea of 'making it better and reselling it' is something I hadn't really considered. Passing the property onto a more qualified house flipping investor after I've made it more solid (it needs that roof yesterday) might be a good idea. Every time I go over there I see more work. All of which is doable and the numbers still work but the time it would take me to get it livable just keeps getting extended and that's no fun.
The main reason I was looking at it as a live-in flip is because of all of the effort it would take if I wanted to save money by doing the work myself. I don't have the benefit of a house on the property (that's awesome Raven, I'm jealous) so I'm just staying with friends and family. I'm sure we'll all get tired of my being a vagrant before the house is ready.
I think I'm probably looking at $20,000ish to get it either livable or ready for resell and I'm not entirely sure I'd make my money back on a quick resell. However, I'll have been in there working long enough to know if I actually want to keep hacking away at it.
I've definitely got some more to think about on this one. I appreciate the great advice!
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