Author Topic: Fixer upper - Fix it up or GET OUT?  (Read 2404 times)

youngatheart

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Fixer upper - Fix it up or GET OUT?
« on: April 04, 2017, 08:18:04 AM »
We purchased a foreclosure roughly 3 years ago.  It is a small 3 BR 1 BA on 3 acres with a basement and walk up attic that was built in 1950.  The main floor is the only livable space.  We could insulate the attic and finish the basement, but those are far down the list.  It needs a lot of attention including replacement of fascia, gutters, new roof on garage, new window trim, new well, bathroom remodel (not a preference, faucet coming out of the wall), various landscaping issues, etc.  Most of these things need immediate attention.  We have already replaced the oil heating system with a new heat pump (heat and a/c) and replaced portions of the septic system.  The winters are hard (no insulation and plaster walls, would need to completely remodel to add any).  We do have a wood stove in the basement that, if fed properly, will heat the house well.  All that said, we love the house, got a great deal and we have room for future expansion if we want it, but I want to make sure I'm being reasonable.

Some stats:

We bought the house for $75,000 in 2014.  We owe around $70,000 (hasn't been our focus).  Zillow currently has it $105,000, but I would expect quite a bit less if we sold it with all the issues.

My income was around $70,000 last year (17% of that was an annual bonus).  My wife is a SAHM to our 2 children (6 yo and 3mo).  We have no debt except for the mortgage and are comfortable, but don't have any significant savings and have not even started thinking about early retirement.  We have two cars that are older (97 and 04), but we really need a truck (for firewood) if we stay here. 

If we decided to take on these projects, we'd either have to prioritize, save money and hope we don't do more damage to the house in the process or take out a loan to address some of them now.  I'm not opposed to DIY, but can't learn everything in such a short time and the tools and supplies, while mostly a one time investment, aren't cheap themselves.

If we decide to put it on the market, there are still things that would need attention prior to selling it. 

I do commute to work (90 miles round trip x 5 days per week).  Ideally, we would move closer.  However, I work in a pretty wealthy area and live in a rural, LCOL one.  We couldn't expect to get anywhere close to our current mortgage payment or the acreage if we move any closer to work.

So... The question:

Should we stay here and continue to invest in the home or should we sell and look for something with lower maintenance?

Thanks all.






youngatheart

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Fixer upper - Fix it up or GET OUT?
« Reply #1 on: April 04, 2017, 08:25:42 AM »
MOD EDIT: Merged duplicate topics.
« Last Edit: April 06, 2017, 12:51:19 AM by arebelspy »

lthenderson

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #2 on: April 04, 2017, 08:32:03 AM »
I have always bought fixer uppers and fixed them up while living in them with the idea I may sell them someday in the future. I am on house number three currently.

To stay or go is really something only you can answer. Some people like me don't mind living in the middle of debris while fixing up a home over a period of years. Other's can't stand coming home to a single bathroom gutted down to the studs. I find it rewarding to figure out how to do things on my own and others get frustrated and stressed. I can't answer those for you.

I can say that out of the problems you listed, none really sound like an emergency unless the garage roof is currently leaking and there are stop gap measures you can do to stop the leak until you save up money for the roof. I wouldn't borrow money to do all those things unless it was an emergency. Instead I would concentrate on creating a monthly remodeling budget and tackling the projects one by one as you get the money. Since you also may lack the time to do things, waiting for money to accumulate allows you to work at a slower pace. I have spent many nights and weekends working on my house fixing it up back when I worked a day job. I enjoyed the work and turned it into family bonding time by getting the kids involved. Others may not enjoy doing it the same way.

Fishindude

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #3 on: April 04, 2017, 08:41:02 AM »
Sounds like you like the place and the location, and a $70,000 mortgage is about as affordable as it gets.
I'd stay put and fix the place up, pay as you go without additional borrowing.


historienne

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #4 on: April 04, 2017, 11:58:58 AM »
I would sell, for two reasons:
1 - it doesn't sound like you'd get much of a return, on the renovations.  If $105k is how much the house would sell for in *good* condition, there's a limit on how much money it's worth putting into it.
2 - 90 miles round trip commute.  I know some people are fine doing this, but that sounds like hell to me.  That's 7.5 hours or so in the car each week - equivalent to a full day of work!  I'd really be looking to move close to my job, unless you anticipate finding a closer job in the reasonably near future.

ysette9

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #5 on: April 04, 2017, 12:25:53 PM »
What does your wife think?

I live in a 1950s uninsulated house in a very mild environment and I HATE the fact that the house is so often uncomfortable for lack of insulation. We spend a relative fortune in the winter to essentially heat the outdoors through the single pane windows and still the floors are always cold. With a little one that especially sucks because they spend all of their time down on the floor. Money aside, I say lack of easy ability to insulate plus your insane commute = sell and find a better solution. Personally I would prefer to rent a new-ish apartment with all the comfort that comes with that than an old house.

south of 61

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #6 on: April 04, 2017, 12:35:39 PM »
I was all in for fix it up - until I got to the 90 mile commute part. I couldn't do it. But if you can - I would fix it up (just do it gradually, rather than getting into debt to do it all at once)

MountainFlower

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #7 on: April 04, 2017, 12:47:43 PM »
How does your wife feel about staying home with 2 kids in a construction zone.  I, personally, did it for the first 8 months of my daughter's life and it was hell to me.  Of course, we had been in construction for the previous 10 years, so that certainly factored in.  But the kid thing just made it all a lot harder.

The problem with this scenario, and I speak from experience, is that the house is ALWAYS THERE hanging over you.  You never feel like you can do anything fun because you HAVE TO WORK ON THE HOUSE.  That's fine if it's just you and your wife, but you have two kids who need to see dad.  Factor in the commute, and you'll see very little of them between work and working on the house.  I would sell and move closer to work. 

We completely gutted a house and built a house.  I also have a 70 mile round trip commute, but I don't go 5 days a week, more like 3 or 4.  However, my husband has amazing DIY skills and tools....and it was still crazy hard, time consuming, and expensive not to mention just soul sucking to live in a construction zone for months/years on end.  I propose you move on and seek something closer.  I work in Boulder which is crazy high COL.  That's exactly how we ended up with the fixer-upper an hour away.  However, we did most of it before kids.  Even in the crazy market that it is around here, I'll bet that we could today go find something reasonable within 15 miles of Boulder.  Your situation might be different, so who knows.

redbird

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #8 on: April 04, 2017, 01:00:16 PM »
I was all in for fix it up - until I got to the 90 mile commute part. I couldn't do it. But if you can - I would fix it up (just do it gradually, rather than getting into debt to do it all at once)

This.

To add on to that, I notice you only have 1 bathroom, and it's one that needs renovations. If you plan to do those renovations yourself for money savings/badassity reasons, then with your work and commute schedule, that bathroom renovation will be slow. Your wife being a SAHM and having 2 young children... it may be hard to deal with an underconstruction house but especially that bathroom, since might be unsafe for the 6yo to go into at points. If you decide to stay, you might want to think about the renovation plans carefully.

youngatheart

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #9 on: April 04, 2017, 01:41:29 PM »
What does your wife think?

I live in a 1950s uninsulated house in a very mild environment and I HATE the fact that the house is so often uncomfortable for lack of insulation. We spend a relative fortune in the winter to essentially heat the outdoors through the single pane windows and still the floors are always cold. With a little one that especially sucks because they spend all of their time down on the floor. Money aside, I say lack of easy ability to insulate plus your insane commute = sell and find a better solution. Personally I would prefer to rent a new-ish apartment with all the comfort that comes with that than an old house.

I'm blessed with a supportive wife.  She is willing to stick it out or sell if that's what we decide to do.

Same for the winter situation here.  We either spend a fortune with traditional heating or I have to use what little free time I have to keep us in firewood.  Even then, it's still at times, not what I would call comfortable.  We would miss the yard with an apartment, but we wouldn't miss the power bill.
« Last Edit: April 04, 2017, 01:43:40 PM by youngatheart »

youngatheart

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #10 on: April 04, 2017, 01:51:39 PM »
How does your wife feel about staying home with 2 kids in a construction zone.  I, personally, did it for the first 8 months of my daughter's life and it was hell to me.  Of course, we had been in construction for the previous 10 years, so that certainly factored in.  But the kid thing just made it all a lot harder.

The problem with this scenario, and I speak from experience, is that the house is ALWAYS THERE hanging over you.  You never feel like you can do anything fun because you HAVE TO WORK ON THE HOUSE.  That's fine if it's just you and your wife, but you have two kids who need to see dad.  Factor in the commute, and you'll see very little of them between work and working on the house.  I would sell and move closer to work. 

We completely gutted a house and built a house.  I also have a 70 mile round trip commute, but I don't go 5 days a week, more like 3 or 4.  However, my husband has amazing DIY skills and tools....and it was still crazy hard, time consuming, and expensive not to mention just soul sucking to live in a construction zone for months/years on end.  I propose you move on and seek something closer.  I work in Boulder which is crazy high COL.  That's exactly how we ended up with the fixer-upper an hour away.  However, we did most of it before kids.  Even in the crazy market that it is around here, I'll bet that we could today go find something reasonable within 15 miles of Boulder.  Your situation might be different, so who knows.

I definitely feel as though the projects are ALWAYS there.  I can never relax, but hey, that's adult hood.  I am not the most handy person, but am willing to learn.  It'll just take time.  Thanks for your input.

frugaliknowit

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #11 on: April 04, 2017, 02:04:53 PM »
I would do some serious soul searching regarding your commuting costs, both monetary and numerous other costs.  90 miles per day is a HEAVY cost.

CptCool

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #12 on: April 04, 2017, 02:25:11 PM »
I won't comment on whether you should live in it or not as that is largely a personal decision. However, if you stay here's what I'd do to keep costs low and make it a nice living environment. This assumes you're doing it today (i.e. winter is far away now).

1. Hire out someone to do the bathroom. Hiring it out means it can get done in 2-4 days, whereas it'll likely take you at least 2 weeks if doing it DIY. You can't live in a house easily without a bathroom available.
2.If landscaping issues mean that you are getting water in the basement, then get that fixed next. If it's just cosmetic save it for later
3. Replace anything rotten. This includes plaster that got wet, exterior fascia/trim, subfloors, etc. Anything that shows signs of rot need to be replaced. Use pressure treated wood or non-organic things for the exterior.
4. If the roof on the garage is leaking, temporarily patch it up rather than replace the whole thing. Save up for roof replacement next year
5. Air seal the attic & basement, then add blown-in insulation to the attic. I know you mentioned it as a maybe, but absolutely do this. The payback is only a couple years if you're completely uninsulated, plus you get a tax credit for 10% of the materials costs. It also vastly improves the liveability and comfort in the summer & winter. I personally would hire this out as they'll do it in 1-2 days, will do the job 100% with proof using a blower-door test, and are generally quite cheap
6. Attach new gutters on an as-needed basis
7. Fix the other nice-to-have items & cosmetic issues one at a time when you have the funds/time

paddedhat

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #13 on: April 04, 2017, 07:48:26 PM »
I'm a retired builder and my son is currently house shopping in an area a few hours away.  He started his search by sending me listings, and detailed photo albums of several homes that are very similar to what you own. We would then spent time reaching the same conclusion. The process went like this.

Yes, it's cheap, maybe even a bargain. Yes it needs a ton of work. Unfortunately, the work falls into two categories. A lot of the work you will potentially be doing, roofing, soffits, plumbing/electrical upgrades, septic, grading, driveway, insulation, heating etc.. fall into the "functional adequacy" category. Since appraisers, inspectors, and buyers expects to see these systems in functionally adequate condition, they will deduct for issues that need to be addressed, but not pay extra since it has a functional roof, septic system etc.. So you spend $30K to make the place functional and another $20K to paint, renovate the kitchen and bath, and put all new floor coverings in the place, assuming a lot of DIY labor and low cost finishes.

That leads to a few questions. Are you qualified, experienced, and "tooled up" to tackle a whole range of major projects. Are you willing to sacrifice the majority of your free time  and put at least 25-30 hours a week into the project for months (years) on end, until the whole place is renovated. Does any of this pencil out.? If you end up spending $50K and put 1000 hours of your time in, will you easily get your money back since the market is strong enough to make it worth your effort, or will you end up with a house that's worth $30K more than you paid, and you lose $30-40K after closing costs, essentially handing all your hard work to the next owner?

My son caught on pretty quick, and decided that he wanted to avoid the whole fixer up end of the market.

Your path can be pretty clear here, just gather all the information first.

!. What is a the current market value of the place without repairs and upgrades? Drag a few agents through the place and get a couple of opinions.
2. Since disclosure and inspection will reveal issues (roof, well, etc...)  what are the realtors take on this info. Is the house even marketable, or will you be forced to correct, or discount for these problems.
3. What are the costs involved with restoring the place to functional adequacy. Well, roof, soffits, etc....  Get bids on the work.
4. what are the cost of renovations to make the place the kind of home you want to stay in, new bath, flooring , paint, kitchen etc....
5. what is you realistic skill level and desire to tackle any of this work, will you realistically put the time in to take each project through to completion.

Now run all the possible scenarios and see what makes sense to you.  Personally, I would bail on the commute, bail on a house that needs years of constant DIY and $30-60K  or more of investment, and find a way to make some other living arrangement work, a hell of a lot closer to my job, but that's just me. Good luck. 

kendallf

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #14 on: April 04, 2017, 09:05:18 PM »
I echo a lot of paddedhat's thoughts here.  The biggest factor is whether you will really work on the place yourself.  IMO you have to be committed to doing this, and living with the interim discomforts, and also committed to the other downsides of your housing choice like the crazy commute. 

If this is the case, start with small and/or urgent projects; just do one step at a time and don't let future work daunt you.  None of it's rocket science, and you don't need a master craftsman's tool arsenal all at once.

If, as it sounds, you are questioning these choices, figure out if you can actually sell the place at all and minimum costs to do so.  At least as important, look at the choices and compromises you might make for closer housing (less space?  apartment/condo?  schools?)

Personal anecdote: I owned a house for many years that my daughters grew up in; it was run down and in need of extensive repair, and I still had a relatively large mortgage on it.  If I sold it as-is it would not have qualified for a normal mortgage without doing a lot of those repairs. 

I spent a good chunk of the last two years working 20-30 hours a week on that house in addition to my normal job.  I am a very experienced DIYer and I still learned a bunch of "new to me" skills during the process.  It was fun sometimes, draining often, and I was thoroughly sick of it by the end. 

It sold for a good price; I had spent over $20k in materials (I did all labor) and my (unprovable) estimate is that I received ~3x that in ROI at the sale.  I still don't know if I want to do that again.  You need to enjoy the work, have the time, and be able to buy materials as you go.

Fishindude

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #15 on: April 05, 2017, 08:34:28 AM »
A 90 mile round trip commute is a pretty routine thing in many parts of the US and many don't give it much thought or consider it a huge inconvenience.
Sacrifice an hour and a half on the road five days a week in order to earn a good income and be able to live in the peace and quiet of a rural setting more economically than in a metro area.   Lot's of folks around here do it.

ysette9

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #16 on: April 05, 2017, 09:08:55 AM »
Quote
Lots of folks around here do it

(I have to: "lots", not "lot's")

Yes, lots of people do it, but we here on the MMM forums exist to snap people out of thinking that this is a desirable or smart choice to make in life. Commuting long distances like that has huge downsides. Not just time and money on fuel and wear/tear on the vehicle, but lost time with the family, lost time you could use to remodel the house, and negative health implications. As a personal anecdote, when we moved closer to work I got such a boost of joy in my life by not spending a bunch of time on the freeway. I couldn't put a dollar value to that but it was huge.

Fishindude

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #17 on: April 05, 2017, 09:38:12 AM »
Yes, lots of people do it, but we here on the MMM forums exist to snap people out of thinking that this is a desirable or smart choice to make in life. Commuting long distances like that has huge downsides. Not just time and money on fuel and wear/tear on the vehicle, but lost time with the family, lost time you could use to remodel the house, and negative health implications. As a personal anecdote, when we moved closer to work I got such a boost of joy in my life by not spending a bunch of time on the freeway. I couldn't put a dollar value to that but it was huge.

Many of us live rural and love living rural.  However, the best paying jobs require that we travel into a more populated area every day to work.  There simply aren't any well paying jobs within a few minutes of home.   The higher pay covers the vehicle fuel, wear & tear and the only real downside is time, 7.5 hours per week on the road.  Depending upon how you are wired, this time isn't entirely bad.  You get some down time to yourself, relax, drink coffee, listen to music, maybe make a phone call or two, etc. so it's not all negative.

Also, if we moved to the metro area where that work is, our housing money wouldn't go near as far, our kids wouldn't be able to attend good, small public schools, and we couldn't pee off our deck :)
 

ysette9

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Re: Fixer upper - Fix it up or GET OUT?
« Reply #18 on: April 05, 2017, 12:00:17 PM »
Being able to pee off your own deck: priceless

:)

Just for the record, my husband sometimes pees in the back garden and we live in a normal neighborhood with 5000 ft^2 lots. The key is mature landscaping.