Author Topic: Fixer Upper Purchase for Newbs?  (Read 2150 times)

asiljoy

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Fixer Upper Purchase for Newbs?
« on: September 22, 2015, 09:01:04 AM »
We're looking at a house way below our budget with the layout we want in a location closer to the location we wanted than we'd ever thought we get. It's within walking distance to all 3 good schools my kid would go to, a nice grocery store, a movie theater, a coffee shop, a couple of restaurants/shops, and about a half mile to a lake with a bandshell/walking paths. We could easily sell our second car and never miss it.

The problem is it's been neglected and needs quite a bit of work: replacing sad looking fiberboard on the outside of the house/garage, tearing down a non-permitted 3 season porch, putting in an egress, replacing water damaged ceiling tile/paneling (and who knows what we'll find behind that), gutting a bathroom that's got a funky smell and some really rundown fixtures, fixing up wood floors, and a buttload of landscaping.

We'd be able to get the house around $270,000 and we're estimating $50,000  for repairs from back of the envelope math. It's neighbors are going for $400-500,000 if their older, or $700,000 on up for teardown/rebuilds.

The question is, how much is too much for newbs? We've never tackled a project of this scale and I'm worried since so many of the issues can be attributed to water damage, that the issues are just going to cascade when we start opening up walls and it's going to turn into the money pit a la Tom Hanks style.

waffle

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Re: Fixer Upper Purchase for Newbs?
« Reply #1 on: September 22, 2015, 09:22:56 AM »
I'd take your repair estimate and double it. if there is unrepaired water damage then get ready for mold behind those walls which means mold mitigation and replacing most of the drywall plus whatever else you might find. If its the right house for you and your comps are accurate then it might still be worth it, but it is risky and there's probably a reason why more experienced flippers/investors haven't jumped on it already.

Telecaster

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Re: Fixer Upper Purchase for Newbs?
« Reply #2 on: September 22, 2015, 10:38:44 AM »
Double the cost, triple the time, is my rule of thumb.

My other rule of thumb is that virtually all home projects are doable by the noob, as long as you don't feel any time pressure to finish.   You'll hit a million tiny snags in each project, and as long as you just take the time to work through them, you'll be fine.   

ShoulderThingThatGoesUp

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Re: Fixer Upper Purchase for Newbs?
« Reply #3 on: September 22, 2015, 10:50:06 AM »
If a new build would go for $700,000, why hasn't a builder bought it? What's lot value?

asiljoy

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Re: Fixer Upper Purchase for Newbs?
« Reply #4 on: September 22, 2015, 12:03:05 PM »
If a new build would go for $700,000, why hasn't a builder bought it? What's lot value?

My realtor's guess was either the builder who has been working the neighborhood (it's mostly the same one) is already over-extended, or ran into permitting issues given the size of the lot. The new builds are monster 5 bed/4 bath homes and this is a 3 bed, 1 bath house. But I really don't know.

Double the cost, triple the time, is my rule of thumb.

My other rule of thumb is that virtually all home projects are doable by the noob, as long as you don't feel any time pressure to finish.   You'll hit a million tiny snags in each project, and as long as you just take the time to work through them, you'll be fine.   
We're fine handling cosmetic stuff; tiling/light fixtures/laying flooring/etc. Basically anything where if I mess up, it means something looks wonky, but my house won't fall down.

I'd take your repair estimate and double it. if there is unrepaired water damage then get ready for mold behind those walls which means mold mitigation and replacing most of the drywall plus whatever else you might find. If its the right house for you and your comps are accurate then it might still be worth it, but it is risky and there's probably a reason why more experienced flippers/investors haven't jumped on it already.

This is exactly the kind of advice I was looking for, thanks.  My realtor just recommended if we're serious to have an engineer come out and look at the foundation as she thought it looked like it was crumbling in places. This is probably more house than we can chew on.

Playing with Fire UK

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Re: Fixer Upper Purchase for Newbs?
« Reply #5 on: September 24, 2015, 10:20:48 AM »
How much time do you have? How many hours do you work? My house work was mostly done over weekends, but as I could be there in the evenings lots of little/planning/prepping activities got done which brought the move in date forward considerably.

Will the seasons impact you? Being without heat and power in a warm climate and long evenings is totally different to through the winter. Will you be living there and could you afford to move out for a year if there were delays?

The foundations would be my biggest concern, followed by the water. Anything else and it's unlikely that you'll cause it to fall down. If that is worse than you think could you lower the purchase price? I'd get an engineer to look at it. Sounds like it could be a really fun project for you!