aka I've got cold feet.....
SFH in pre-forclosure, not bank-owned
Owner is asking 55K
Roof is newer, foundation and house are in good shape. Needs a huge cleanup - see my cat pee post - and everything needs to be painted. This is a historic house and personally, I like to keep them as true to form as possible so I have no intent of making it open concept, exposing beams and all the "fad" stuff I see nowadays. That said, it is not in a historic district so it will not be subject to their regulations if I need to deviate somewhere. But it will be solid and clean.
Kitchen and bath need work. It will need all new appliances. Heating system works great but is old and I'd want to replace it. We don't need central air in this area so I don't think I'd go through that expense. Plumbing probably needs to be looked at and I'd probably re-do the kitchen layout anyway. Kitchen floor is linoleum and that and the plywood will need to be removed to make sure there isn't any cat pee on the original floor underneath. Yard is tidy, no trees need to come down.
I somehow blew away the spreadsheet I made last night based on a blog I read here but here's what I remember:
Appraisal from last year states a MV of $120K, which is supported by sales in the area in the past year. There are some slightly bigger houses on the street that have gone for over 200K. Good area, close to highway and shops, but a quiet street.
Insurance $125 (wild guess for non-owner occupied in CT, my own house is $75/mo)
MAY need flood insurance, it is on the edge of the zone and I haven't called to check on pricing. I had it on my own house for $400 but that was in 2011. River, not ocean.
If this is a rental, I can probably get $1200 without a problem (have talked to landlords in the area). Tenants pay utilities except for water.
If I flip, I should be able to get 120K at a minimum.
To cover utilities while working or vacant, I'd estimate electric $40, gas heat/hw $75/mo winter, $35/mo summer.
I have 20K in a LOC
I have a CC with 35K and another with 25K but cash advance fees are crazy if I were to use part for purchase.
I can do cleanup and paint myself but may need to sub out plumbing and electrical. I have run plenty of network wiring in my old life though, so maybe I can run it if I have an electrician finish it off at the panel? Oh and the heating, I'd definitely need someone to hook that up as I'd like to switch it to gas.
So, am I crazy? It's ok, I've been called that before! I don't know what's scaring me more, the money, cat pee or electrical and plumbing! Thanks!
<edit> I wonder if I can also use Historic Tax Credits. I know that program was restructured last year and will need to contact my state office for info.
I will not even consider it unless the insurance agent checks out the flood zone for exact condition.
I will order a more detailed inspection rpt. Estimates from contractors based on sf. A neighbor spent $125K on a modern kitchen, not to mentioned their 4 aging bath, flooring all need upgrade. Went broke and unloaded it at loss. You need to be exact on what additional improvement you plan to make and cost.
What about interest, tax, brokerage cost .....
I could not even fathom spending 125K on a kitchen. I sure hope it cooks and cleans up for them!
OK, how do I get contractors estimates based on sf? Is that an estimate based on them knowing the area or do they need to physically be inside to look?
Floors will be painted which I will do. Kitchen to be painted or recovered based on condition when old linoleum is removed.
You also need to consider lead paint/dust. There is a 99-100% chance you have it in the house if it is as historic as you say and if you're going to redo the floors/kitchen, you're going to disturb it. You'll need a contractor certified in handling lead paint to deal with it. Check your state laws for requirements. Also, some states have requirements to check for lead paint/dust every time there is tenant turnover if you rent out a house that has lead paint in it (even if it has been mitigated). Those inspections cost money, take time to schedule, and are generally a headache...especially when it's summer and you're in the peak of moving season. You should know all of these details for a rental and how the laws differ for a flip, if you're going to do that.
If you're going to run electrical...confirm with the electrician that they are okay with you running wire. They are on the hook for the work so not sure if they are good with you doing some of that work.
If this place is anywhere near a flood zone, I would not keep it as a rental.
Thanks @Russell Gronsky . If the kitchen floor is not currently painted I think I will be OK. There is a wood floor under the linoleum but it is probably very worn and if that is the case I have the option of replacing it or just re-covering it. If it has a cat pee issue like the front rooms, I will need to treat and Kilz it, and then paint or re-cover (or replace). I don't plan on removing any walls. And I have not seen anywhere that you need to check for lead dust on rental turnover but will double check that - that would be a pain! I am really on the fence on it as a rental, the lure of a flip is tempting.
It's a 500 year flood zone, which is what my own house is in. It has not flooded since the 1930s hurricanes. So hopefully not again for a couple hundred years. Knock on wood
@Diane Dib , you don't need to remove walls to disturb lead paint. Removing old cabinets and installing new ones will require you to drill holes in the walls. Also, unless you have a clear shot from where you want to terminate your electrical, all the way to the break box, you'll probably have to cut holes in the walls to help you fish the lines through. I'm not sure what work you'll need for plumbing but that might need holes in the walls as well, depending on what it is.
No cabinets currently! No lie. It's a very old sink unit with built in storage and there is a pantry. But there will need to be outlets added and lines fished and cabinets installed, so yes, holes.
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