Posted by MichaelR (NoVA) on January 07, 1999 at 13:36:40:
Doris,
It’s all a function of the local market. Northern Virginia is significantly higher than the nation average when it comes to cost of living and home sales.
It’s all relative.
Michael
I bought the property to rehab - now what? - Posted by Pup
Posted by Pup on January 05, 1999 at 18:24:28:
I recently purchased a single family home in need of repairs. Nice older home that had its ceilings dropped and 60’s paneling added. I’ve removed all of that crap and need to put in a new kitchen, bath, roof, and some TLC. Contractor figured another $40,000 would have it as good as new…and it should appraise for at least $80k. So for $50k total investment, I’ll have a nice home to sell or rent. My bank told me I’m ‘collateral rich’, but cash flow poor, so they don’t want to loan the $40k. I need a reputable mortgage broker in MD who would do a 50% loan to potential value with ‘no docs’ or proof of income. Any takers? - Pup
Re: I bought the property to rehab - now what? - Posted by Pup
Posted by Pup on January 07, 1999 at 09:27:28:
I guess I didn’t explain the amount of rehab. It’s a circa 1860 Federal Style home. 4 bedrooms. Approx. 2500 sq. ft on two floors. Frame construction. Additions had been added on to the rear of the house over the last 100 years or so, and the foundation was crumbling under the weight of the additions. The demolition team tore off all of the additions and the large front porch that was not original to the property. So I’m back to the original structure that has a solid stone foundation, but it also has a back wall that needs to be leveled and covered. Door openings that previously led to the additions that need to be filled. Radiators that were cut off and need to be moved back into the old structure. And since the bathrooms and kitchen were later additions (and now in a landfill), add 2 new bathrooms and a kitchen. And you can add the following:
New electric system
Upgrade heating system
New plumbing
Build parking terrace for off-street parking
New roof, spouting, soffit, and facia
20 new windows
2 new stoops, doors, and entryways
New siding
Drywall areas where plaster and lath were removed - about 3 rooms need new ceilings.
Remove old wallpaper and replaster any cracks, etc.
This could be a job for “This Old House”…where’s Norm?
Since it’s in the historic district, the city didn’t want me to use the vinyl siding, but it would be cost prohibitive to try and replicate the existing wood clapboards. So they have approved replacement windows and vinyl siding.
My estimate of value after repairs is conservative. The homes in this neighborhood have sold anywhere from $75k - $140. I sold a home near this one last year for $115,000, after investing $55k in the home and rehab. When I renovate, I like to add a little ‘sizzle’ - nice carpeting, wallpaper, new appliances, etc. So a prospective buyer doesn’t have to do a thing. . .except sign on the dotted line.
I had found this property and contacted the owner and offered them $10,000. They wanted more, but said they’d think about it. 3 months pass, and in the mean time, I had committed to buying another home (to live in) when they contacted me accepting my offer. So, there you have…the rest of the story.
- Pup
Get another bid - Posted by Jason-DTX
Posted by Jason-DTX on January 06, 1999 at 22:14:58:
You need to get a few more repair bids. I’ve rehabbed several houses and $40k of repairs on an $80k house is outrageous. You didn’t state what needed to be done but even if you had to do everything - replace 2x4 skeleton, wiring, plumbing, insulation, sheetrock, major foundation repair, new roof, all new kitchen and baths, siding and everything else you should’nt have to spend $40k. Did you use Joe Kaiser’s contractor? I can see how you can get a bid that high, but you should be able to get it done alot cheaper. An 80K house shouldn’t be larger than 2000 sqft and you should be able to totally gut and rehabb 2 houses that size for $40k.
You didn’t give a lot of information on the house or repairs needed so I may be wrong, but it wouldn’t hurt to get some more bids.
Jason
Re: I bought the property to rehab - now what? - Posted by DJ
Posted by DJ on January 06, 1999 at 08:43:59:
If all else fails, sounds like you’ve gotta a good
Flipper. Sell it as a handyman special. Find a buyer
who can get new financing. Hell, if you sold it for 50k, you’re still making out like a bandit! Good Luck!
DJ
Re: I bought the property to rehab - now what? - Posted by SCook85
Posted by SCook85 on January 05, 1999 at 22:19:53:
Pup,
Give me a call, I can help you (410) 517-0851.
Steve Cook
Re: I bought the property to rehab - now what? - Posted by karp
Posted by karp on January 05, 1999 at 18:54:51:
There is so much missing info here I don’t know where to start.
Forget it, lemme just ask you this. You bought the house for 10K right?
Thanks.
karp
Re: I bought the property to rehab - now what? - Posted by Doris - Va.
Posted by Doris - Va. on January 07, 1999 at 12:51:29:
Hi Pup - Love your “This Old House” story but your selling price ARV sounds way off to me. In my area an historic beautifully restored house like that would sell for upwards of $200,000. to $300,000.
If you are comparing other houses in the area that sold for 100 to 150K - those sound like just ordinary mid-level homes that are a dime a dozen.
I am just a newbie but if I were you I would check into other old historical homes that have been restored as well as yours will be. Maybe you could get a lot more for this house and since you would have a hefty profit margin you could still price it on the low side for a faster sale.
Also - take pictures or video of the before and after and all the work inbetween and document all the renovations emphasizing the historical features. This would help it to appeal to the right kind of buyer.
Just my 2¢. It sounds like you do a great job of rehabbing. Doris
Re: I bought the property to rehab - now what? - Posted by Pup
Posted by Pup on January 05, 1999 at 19:25:45:
Yes, I bought the property for $10k.