Posted by Brad (CA) on August 15, 2003 at 23:04:21:
But you’d have to transport it to San Diego, and by that point I couldnt afford to rent it anymore!
I love old houses! Have fun and dont get money trapped.
Do only fools rush in? - Posted by DeeDee
Posted by DeeDee on August 13, 2003 at 21:56:16:
Need advice…
I’m a Newbie about to purchase (38,000) a 94 year old 5 bed Victorian house where I end up with 5,000 at closing (8/20/03).
The previous owner died (elderly lady who lived in the house for a while). Her son got it as a part of her estate and he is working with a mortgage rep I know on getting out of it (The son lives out of state and doesn’t want to pay for property management) and is selling it to me as is. He’s taking a second out on it.
The structure is sound, so my plans are to do cosmetic work and rent it out for $650. I know I can do a final walk through before closing, but how do I check the electric and water. The utilities are not on. The electric box looks good.
Roof has 2 layers maybe three.
Dry basement (which looks like an asylum, lots of doors down there).
New radiators recently installed.
No water damage, fairly new gutters
I’ll have to replace a bedroom’s walling b/c the walls are plaster and there’s a hole in it.
Needs fresh paint and some darn good elbow grease.
Not in the best of neighborhoods, but not the worst.
My note on it as far as mortgage is 500 including tax and insurance.
50% rental properties in the area.
Comps for the area is 45,000 to 50,000.
Final thing I currently live under a lease option (2 yrs). I couldn’t get approved (92,000) for this house now even with the discount/credit the owner was giving (5000.00). Lenders only willing to approve 85% LTV. I have no money to put down.
Owner of the house I reside in is a big real estate investor in the community. My option is up in May 2004. I’m considering doing land contract on where I’m staying where I pay $750.00 a month.
Is the forecast cloudy and stormy for me?
Re: Do only fools rush in? - Posted by Ron M
Posted by Ron M on August 16, 2003 at 01:06:52:
I have purchased 4 properties in this era and in my opinion unless you are an expert in remodeling, I would suggest a complete home inspection from someone with good credentials. Additionally, if there is time after the inspection have a few reputable contractors quote the necessary repairs, and plan on it costing 10% to 15% more than the quotes, because old houses always have surprises.
BTW, if the roof has 3 layers, most municipalities will require on replacement that it be completely stripped and re-sheeted. This can be quite expensive, so be sure you don’t have to do this as figures of $8,000 - $12,000 are not uncommon.
The neighborhood is critical to either reselling the property or getting “good” tenants.
For $150 per month above the rent, this one sounds like it could be an expensive proposition to me.
Good luck,
Ron M (WA)
I’ve been one of those fools… - Posted by Anne_ND
Posted by Anne_ND on August 14, 2003 at 07:56:01:
…but I had resources to deal with the fallout.
Are you getting an inspection? How certain are you that the structure is sound? Will you have any cashflow after you factor in maintenance and vacancy? When was the house replumbed? Never- then plan on doing that.
I manage several homes in this age group and I suggest you need at LEAST $5K in reserves for the kinds of unanticipated expenses that will come up- roof, hot water heater, leaking plumbing, old appliances dying, new paint, etc.
Be sure to give your tenants the lead-based paint pamphlet.
Look in the archives for posts by michaela-atl.
good luck,
Anne
Re: Do only fools rush in? - Posted by qstaff
Posted by qstaff on August 13, 2003 at 23:21:58:
To check the electric and water, usually the utility companies will arrange to turn them on for you to check. Call them and see. It’s really hard to go wrong on any habitable property under 40K. Big old houses do not make the best rentals because they are high maintenance and also utility costs can be mad high ( atenant pays $650 rent and $500 in utilities. If it’s got a working fireplace, you may want to consider putting in a wood stove and ceiling fans to keep heating costs down in the winter. If the integrity of the house hasn’t been tampered with, you might can get it designated as historical, which means they’ll give you rules of what you can and can’t do, but I think you may get low interest loans with that, too, but then forget ever getting replacement windows. You shouldn’t have more than 2 layers on a roof. As long as the house only needs cosmetic work, like I said, under 40K, take a chance. Besides–there are always lots of people who want to rent big houses.