I bought a house for $11,500 and fixed it up over 3 years.

[Rotax]

I bought a house 5 years ago that was ugly as shit but that's why I was able to get it so cheap. It needed a ton of work but was well worth it to avoid having to pay a mortgage again. Here are some of the steps that worked for me.

1) Intentionally search for an ugly house. It takes out the competition. Houses that are perfect have the most people chasing after them and you can always beautify an ugly house.
2) Be a patient stalker to get an amazing price by submitting low offers on stale properties
3) Ask, what would I need to do to improve it. Can you add a window? Upgrade a window? Remove a wall? Redo the bathroom or kitchen?
4) Get discount supplies on Craigslist. This was how I kept my repair expenses well under the $3000 mark. I just bought left overs from other peoples jobs.
5) Put in some time and elbow grease. I know, I know everyone knows this but sometimes it's more work than expected. I had to work on my place for 3 years before I could move into it. I figured it was better to fix it for 3 years than pay on it for 30 years.

If you want more detail than this, I outlined the whole process here http://live-suburbantoolboxcom.pantheonsite.io/2016/08/04/hello-world/.

[pbkmaine]

Nice!

[guitarman4]

I bought a house 5 years ago that was ugly as shit but that's why I was able to get it so cheap. It needed a ton of work but was well worth it to avoid having to pay a mortgage again. Here are some of the steps that worked for me.

1) Intentionally search for an ugly house. It takes out the competition. Houses that are perfect have the most people chasing after them and you can always beautify an ugly house.
2) Be a patient stalker to get an amazing price by submitting low offers on stale properties
3) Ask, what would I need to do to improve it. Can you add a window? Upgrade a window? Remove a wall? Redo the bathroom or kitchen?
4) Get discount supplies on Craigslist. This was how I kept my repair expenses well under the $3000 mark. I just bought left overs from other peoples jobs.
5) Put in some time and elbow grease. I know, I know everyone knows this but sometimes it's more work than expected. I had to work on my place for 3 years before I could move into it. I figured it was better to fix it for 3 years than pay on it for 30 years.

If you want more detail than this, I outlined the whole process here http://live-suburbantoolboxcom.pantheonsite.io/2016/08/04/hello-world/.

Good job on the cheap house . I really admire your steller frugality . Most people cannot think like you I hate to say . Your one smart person that is very content .

[Rotax]

Thanks Guitarman. It was a bit of a journey for me. I never thought my quality of life would actually increase living in a "crappy" house but eliminating the stress of a large mortgage payment really was worth it, so I wanted to share. At the time, I actually saw 3 other places that fit the template above so I know there are still some diamonds in the rough for others who want to stop dumping their money into bill payments.

[MasterStache]

Good work. Houses like that around here are typically condemned. We actually sold one like that (inheritance). 

[Rotax]

Lol...mine may have been pretty close to that as well. One neighbor kept telling me he was hoping the city would bulldoze it. I just prefer to see it as 70% complete.

[MgoSam]

Great job! I love that you calculated the cost of your labor, I highly doubt many of us here are getting paid $141/hr tax-free so you definitely made good use of your time. I'd also add that you likely learned a ton of skills that will enable you to save on home repairs and maintenance (also you likely are a good friend to have).

[Rotax]

Thanks MgoSam! I can see I am talking to a like minded crowd! I was actually starting to doubt myself at the time so I ended up calculating to cost as a way of validating if I was on the right path. People are so quick to shorten your rope instead of lengthening their own sometimes. It's important that other people know that sometimes and not let it discourage them or stop them from taking calculated action. Best of luck to everyone else who endeavors to build a better financial life on here!

[Cassie]

Great job! WE did something similar buying a house 5 years ago for 60k that no one wanted due to all the things wrong with it. It was a 50's ranch that was really ugly. It had water leaks, rotten floor in bedroom, mold in one closet, etc. It took my DH and a helper working 50 hour weeks 4 months before  we could move in. Now we just finished everything and put 70k total including what we paid the helper for 4 months. Now it is worth 300k.

[Rotax]

Sounds like you got an awesome deal Cassie! Problem solving is always to the way to a good deal and it sounds like you made about 200k for solving that problem! Super excited for you!

[SwordGuy]

Great job!

[Toffeemama]

Wow, way to go!  I have to admit, buying ugly houses is pretty addicting once you've done it.  We bought our first home in 2008, in a high-demand area, for $141k.  It was a foreclosure which had flooded while it was sitting vacant, yada yada, you know the drill.  Over the seven years we lived in it, we fixed it up, albeit very slowly.  Sold it a year ago for $259k.

Now we bought another foreclosure in a cheaper area(which we greatly prefer to the crowded area we lived in before), for $145k.  It's estimated to be worth $182k so far, and has a detached apartment that we're fixing up to rent out for extra $$ every month. 

The numbers aren't as impressive as yours, of course, but we're getting there!

[Rotax]

ToffeeMama,  That sounds like an awesome deal! It doesn't take much to see the difference finding just 2 deals like this can make in your financial life. Especially, when you factor in the rental income. I'm actually a little bit jealous. Nice work!

[Toffeemama]

ToffeeMama,  That sounds like an awesome deal! It doesn't take much to see the difference finding just 2 deals like this can make in your financial life. Especially, when you factor in the rental income. I'm actually a little bit jealous. Nice work!

Thanks for the kind words!  I think the craziest thing is that we didn't get our first house "deliberately".  Husband's parents were pressuring us to find and purchase a house in their town(because you can't be a real family unless you own your own property, apparently), and we were too naive to know better.  We had no idea what we were in for; we moved in with a 3-week old baby. 

We had to pay for a company to remove all the mold before they moved in, which meant they took the kitchen cabinets, downstairs flooring, and most of the drywall with them.  In-laws paid for new carpet and paint in two bedrooms, so we would have a place to sleep in our new house.  And the stupidest part was, even if the house had been in tip top condition, I didn't even like it!  The layout was all wrong for our lifestyle, the neighborhood and city was just awful, sprawling suburbs of DC, and the whole move actually made husband's commute longer!

I like to tell people that house was almost the worst decision we ever made.

[Rotax]

Yeah, when the neighborhood is rough and the commute robs all of the time from your life it's hard to enjoy it. Too much crime is one thing that seems like a deal breaker to me as well, especially once kids start growing up. My neighborhood is lower income but fortunately there is very little crime. So glad to hear things are going in the right direction now!

[Toffeemama]

Yeah, when the neighborhood is rough and the commute robs all of the time from your life it's hard to enjoy it. Too much crime is one thing that seems like a deal breaker to me as well, especially once kids start growing up. My neighborhood is lower income but fortunately there is very little crime. So glad to hear things are going in the right direction now!

My brother-in-law lives in that same neighborhood; he installed a security camera on his front door.  Last week, he caught two guys at his door at 1 AM, standing around his car which was parked in front of the house, packed for a road trip.  You can hear one of the voices saying the phrases, "Oh shit, there's a camera.... get away from the car... don't touch it, it's a setup."  Police were called and shown the video, they said the guys were suspects in a string of break-ins in the area.  They've also heard screams coming from the wooded area behind their house, in the middle of the night....

We had a bunch of break-ins when we lived there too, mostly cars and sheds broken into.  It finally got better for our street when a couple guys from the "bad" house on the block assaulted my husband in our front yard.  Police came, and those guys moved out like a snap.

And my in-laws now say they're worried about our neighborhood.... :P

[Rotax]

Geeeze! That is horrible! Someone said in another post that the most expensive thing to buy is peace of mind. It's hard to feel content when you have to deal with stuff like that going on on a daily basis. I can deal with some small petty theft but once crime swings to home breakins and violent crime it just doesn't seem worth it. On a similar note, crime has no address but there are some cool crime maps out there that will show just what a neighborhood is like compared to another in a heat map.

[Toffeemama]

Neat, I'm going to have to look that up!  It'd be cool to compare my old town with the new one.  I guess it really is true that location is the most important factor.

[CU Tiger]

I live in a really small house in a nice neighborhood with big fancy houses. There is a little strip four houses built in the 1950s, and I live in one. One next door to us was lived in for years by the biggest bunch of trash you can imagine. They spent about 350k to buy it and renovate it at the height of the market, like 2003-2004. They proceeded to slowly destroy their property's value. It was like living next door to the Kallikaks. Their yard was a wild jungle, they never, EVER cleaned up after their large dog, so it was a poop minefield. They did not do anything to maintain the house or property, so what had been a cute little home started looking worn and shabby.

After the couple split, they left their mentally ill, drug addicted adult son in charge of the house and moved away. Son lived there off two more years and completely destroyed it. He and his equally addled girlfriend let the power get cut off. They broke the windows, destroyed the furniture and sprayed graffiti over the walls. After they were finally tossed out by the repossessing bank, we peeked in. It looked like they had just been using the floors as toilets and the walls were covered in pen and spray paint...and possibly various bodily fluids. The bank paid a company to come out and remove all the junk and deal with the health issues...like toilets full of unflushed waste. They boarded up the windows, and there it sat.

It sat empty for over a year. Last summer someone bought it for 80k. Slowly, this husband and wife are bringing this place back to life. They are doing most of the work themself with their kids, while living somewhere else. When they are finished, they will have a nice small home, in a nice neighborhood. Even if they spend $100k fixing it up, it will be a bargain. But with all their sweat equity, they will not spend nearly that much. It is great to see someone using hard work and frugality to buy a crack house and turn it back into a decent family home. We are also happy not to have to live next door to the neighborhood scandal anymore!

[Rotax]

I live in a really small house in a nice neighborhood with big fancy houses. There is a little strip four houses built in the 1950s, and I live in one. One next door to us was lived in for years by the biggest bunch of trash you can imagine. They spent about 350k to buy it and renovate it at the height of the market, like 2003-2004. They proceeded to slowly destroy their property's value. It was like living next door to the Kallikaks. Their yard was a wild jungle, they never, EVER cleaned up after their large dog, so it was a poop minefield. They did not do anything to maintain the house or property, so what had been a cute little home started looking worn and shabby.

After the couple split, they left their mentally ill, drug addicted adult son in charge of the house and moved away. Son lived there off two more years and completely destroyed it. He and his equally addled girlfriend let the power get cut off. They broke the windows, destroyed the furniture and sprayed graffiti over the walls. After they were finally tossed out by the repossessing bank, we peeked in. It looked like they had just been using the floors as toilets and the walls were covered in pen and spray paint...and possibly various bodily fluids. The bank paid a company to come out and remove all the junk and deal with the health issues...like toilets full of unflushed waste. They boarded up the windows, and there it sat.

It sat empty for over a year. Last summer someone bought it for 80k. Slowly, this husband and wife are bringing this place back to life. They are doing most of the work themself with their kids, while living somewhere else. When they are finished, they will have a nice small home, in a nice neighborhood. Even if they spend $100k fixing it up, it will be a bargain. But with all their sweat equity, they will not spend nearly that much. It is great to see someone using hard work and frugality to buy a crack house and turn it back into a decent family home. We are also happy not to have to live next door to the neighborhood scandal anymore!

What a story! As I was reading this, I caught myself cringing just a little bit at the mental picture your were painting.Then I reminded myself that that's how you get a great deal. That house sounded like exactly the kind of place than becomes almost impossible to sell which is exactly where you can get an exceptional deal like the family you described that bought it. It's just counter intuitive. It would be a project for sure, but you only need 1 or 2 deals like that in a lifetime to really change your financial picture. Thanks for sharing this story. I can definitely relate.

[C40]

wait, am I understanding right - were your total repair costs only $3,000? So you have only $14,500 into the house? Holy freaking moly!

[SwordGuy]

Kudos to all of you who have picked up a house cheap because it needed work.

We picked up 3 rentals for $33k to $38.4k and renovated two of them for $7k and $13k.   #3 looks to cost us about $10k to $12k.     

#1 rents for started renting for $750 and is now at $765, #2 was renting for $800 + $20 pet fee, it will be up to $850 to a new renter in January.  :)   We expect to get $800, maybe better, from #3 when we get it done.

The two fixed-up ones are both worth about $80k now that they are fixed up.   #3 will be worth the same or a bit more.

So not only did we get a bunch of new rental income but we also got a sizeable net worth increase too.

Nowhere near as awesome as a fully functional home for less than $15k, though!   I'm in awe!

[ChpBstrd]

In my low-cost area, it's hard to justify fixer-uppers. The end price you get is usually at or less than what it takes to fix them up.

I bought a 1200sf at auction for $4300 back in 2004. After 5 years of DIY replumb, rewire, rewall, refloor, siding, windows, and HVAC, I sold it for $53k, a $20k gross profit. HOWEVER, that 20k is what I earned for 5 years of weekend labor. In other words, for dealing with asbestos, roaches, and a toilet that had mysterious barnacles on it, I made less than if I had taken a weekend shift at McDonalds. It was a disasterous move, based on me underestimating the time that kind of project takes, especially for a non-professional.

Worse, it delayed my decision to get a master's degree, after which my earnings finally took off.

Now if I lived in L.A. and bought a crack house for $430k, I could just pay $100k to have it fixed and still sell for a $100k profit.

[JLee]

I'm really impressed. I tried buying a lower-end house in Phoenix in 2013 and ended up buying one that had already been remodeled because cash buyers were buying everything so fast I didn't have a chance!

[Dicey]

Kudos to all of you who have picked up a house cheap because it needed work.

We picked up 3 rentals for $33k to $38.4k and renovated two of them for $7k and $13k.   #3 looks to cost us about $10k to $12k.     

#1 rents for started renting for $750 and is now at $765, #2 was renting for $800 + $20 pet fee, it will be up to $850 to a new renter in January.  :)   We expect to get $800, maybe better, from #3 when we get it done.

The two fixed-up ones are both worth about $80k now that they are fixed up.   #3 will be worth the same or a bit more.

So not only did we get a bunch of new rental income but we also got a sizeable net worth increase too.

Nowhere near as awesome as a fully functional home for less than $15k, though!   I'm in awe!

These numbers make me weep!