Specialist · Woodbury, MN · Member since 2016 · 9 posts · 3 votes
Im looking at BRRRing a 1875 built single family home, structure seems to be built very solid, mostly interior cosmetic repairs needed. Does the old age limit the ARV for when I go to Refinance? Having trouble finding accurate comps that fit the bill for the age, size and updates that would be applied.
@Ben Beaudoin I haven’t BRRRRd one but I’ve flipped a 1910. It sold super fast and had a bunch of interest because of the character of the old house. There is a large group of people who love old homes. As long as it has good bones I don’t think you will have an issue with appraisals. With my 1910 most of the comps were much newer. If anything the age should help the value not hurt it because the fact that it’s still standing is proof that it’s built well.
@Ben Beaudoin I haven’t BRRRRd one but I’ve flipped a 1910. It sold super fast and had a bunch of interest because of the character of the old house. There is a large group of people who love old homes. As long as it has good bones I don’t think you will have an issue with appraisals. With my 1910 most of the comps were much newer. If anything the age should help the value not hurt it because the fact that it’s still standing is proof that it’s built well.
@Ben Beaudoin Yes but in NY, both late 1800's and early 1900's. But that is common where I am. I'd be careful if it is uncommon where you are. If you can't find good comps then expand your search. Find any old houses sales and find the comps for those. Did they sell for a similar price to newer homes if the same size and features? Adjust your ARV accordingly. Or heck call some appraisers and just ask them about older home values. It'll only take 2 minutes of their time.
@Ben Beaudoin I am assuming you will be getting an appraisal with your refi. The old age doesnt effect it as much as people think. Appraisers utilize effective age which is different from actual age. Its hard to explain without using appraisal terms but basically appraiser has to find a comp older and younger than the subject but if they dont or those homes arent similar due to not being renovated as much as yours, they dont have to use it. Instead, they go off of effective age. I can say a 100 year old home has a similar effective age as a 75 year old home or even younger (not new construction though lol). effective age is like an estimate of the age based on utility,physical wear, etc which is lower when properties are renovated. sorry for this long message that probably is hard to understand.
@Ben Beaudoin Our house had been updated at many different stages, so you never knew what you would run into. The electric panel had doubled lugging because there wasn’t enough room for more breakers in the box. The floors weren’t level. The plaster walls were cracked, patched then wallpapered for 5 layers (it was fun scraping all that off). There was a lot of wood touching dirt under the house, which caused termites to move in (luckily they didn’t do any damage). The biggest problem was the sewer pipes. The old clay pipes had tons of roots.