First time rehab!!! Need help - Memphis TN

9 Replies

I'm making an offer on my first long distance BRRRR deal. I had a verbal walkthrough of the house from a licensed inspector yesterday and have to make an offer today.

There were limitations as the house had multiple inspectors and was owner occupied.

There was a general estimate of $30k in repairs from the owner.

NOTES based on my discussion with the inspector:

1500 sqft house 3/2

House is on a slab

Roof – 2x8 rafters 24 inch centers, several repairs already made and some that need to be made. Not a full roof replacement. 4 spots where there are torn shingles. One leak in the side front bedroom, but went to the attic and didn’t find anything.

AC – 23 years old but functional

Furnace – 23 years old but functional

Copper pipes – good, wrapped, insulated,

Electrical system – couldn’t look at it - single strand aluminum, not a bad thing – after 1972 the wiring got better.

Chimney – has concerns, black on the bottom portion of it. There maybe a Chimney issue. Use caution

Moss around the house.

No siding issues as it’s all brick except for peaks

Some rotten wood on the eave, under the window,

Aluminum windows – usually does not have problems with those types of windows. May replace screens. Assume that their all good.

There are grounded outlets but not GFCI protected.

Doors open and close.

Seems structurally sound.

House hasn’t been renovated from 1970s.

Lots of popcorn ceilings and only one with a stain in it.

MY ASK: does $30k still sound right? And anything here that should make me run the other direction? It honestly looks better than I expected.

@Kelli Loo

I would add Roof, Ac and Furnace replacement to the rehab. Looks like they are close to shelf life 

Since its owner occupied, some other issue may be there once vacant so budget for those. 

Hopefully you are paying 60 to 70% of ARV so it can be sold at a profit after BRRR is complete. Since its Memphis, where some neighborhoods have become hotbeds of turnkey activity, please do your due diligence to the location. ARV change by the streets in some neighborhoods. Make sure its at least a B class neighborhood.

A physical visit to memphis and understanding neighborhoods are critical to investing in that city.

@Kelli Loo to accurately asses what your budget would be we would need more information. Are you just addressing the items listed or are you doing a full scale renovation to include new kitchen, baths, flooring, fixtures etc!

I would definitely replace roof, and HVAC system!

@Kelli Loo

My suggestions:

1. Replace the roof and any rotten fascia, decking, soffit, corner boards, etc.

2. Have the flashing checked around the chimney

3. Put SPC flooring down (water and scratch resistant). It’s worth the investment.

4. Get an inspection on HVAC, it may just need. Yearly maintenance. However, with it being 23 years old I would go ahead and replace furnace and condenser. You either spend the money now to replace or end up with a lot of service calls.

5. Get GFCI’s installed in bathrooms and kitchen.

6. Have the electric panel inspected

Questions:

How is the water heater?

Is the power off or on? If power is off, I would get an electrical safety inspection prior to it being turned on.

I would have the roof inspected, a lot of home inspectors simply look at the roof to make sure it has life left in the shingles but they don’t always catch other issues. It’s inexpensive and can save you a lot of money down the road. I had one done at my last purchase even though the home inspector said the roof was good and was replaced less then 5 years ago. The roof inspector noticed the roof had been high nailed (improperly installed). The $125 roof inspection resulted in $2500 in seller credits at closing. 

@Kelli Loo Memphis is tricky,I live in Columbia Tn a couple hours East of Memphis.There are super cheap houses for sale in Memphis.It is trending up,back not crazy.The area that the house is in is the main thing.You have a local contractor that replied to you,I would def.reach out to them.I have a friend of a friend that is a local fire fighter,who gave me the low down on good areas and really bad areas.

While searching for my next project because I am just outside Nashvile which is a great market,I get tempted by the low prices in Memphis,then when I do my research I chicken out!Best of Luck!

Your HVAC system is already 23 yrs old, I suggest you should replace it and have a local contractor check the property as well.