"Unapproved Addition" - Posted by Magister (MI)

Posted by Tommy T on June 12, 2006 at 01:56:35:

Water damage is always fun. I’d get some contractor inpection/bids
and use them to negotiate the purchase price, and also of course to
get another opinion of just how much this might end up costing your
bottom line. Worst case scenario could be dry rot all the way down
through the floor joists. Some nice color photos of the damage along
with the bids usually help convince the seller that they need to
discount big-time and get out (although it sounds like you’ve got a
great price already on this one). Don’t forget a bid on correcting the
roof problems!

As for heat, you might want to get bids on some Cadet electric wall
heaters installed/wired in the extra space, they are suprisingly efficient
these days. Another option if you have gas to the property is a high-
efficiency wall-mounted room heater that vents right out through the
wall, but that will set you back more than the electric units. Or, is the
furnace rated high enough to heat the extra space? There may be a
way to add ducting to that room, may be an economical fix.

Another concern is that when you have your electrical work inspected
when completed, they may have an issue with the addition not having
been built with proper permits, and require that it be brought up to
code, although in some places the electrical inspectors pay no
attention to anything but electrical issues. That kind of thing can get
ugly. You’ll have to be creative to avoid running into that problem.

Sounds like it’s potentially a good keeper, good luck!

“Unapproved Addition” - Posted by Magister (MI)

Posted by Magister (MI) on June 11, 2006 at 13:39:37:

Hi! I’m currently looking at a house that has (what I believe to be) an ?unapproved addition?. I know I’ve read about this a couple of times in the last six months that I have been reading the site, and was hoping if a few of you experienced investors could give me your two cents.

The roofline of the addition forms a ?T? to the main part of the house. There is a sewer exhaust pipe in the valley (of this ?T?) which has caused some leaking. Although the roof is only about 5 to 10 years old, you can see where they have tarred this one valley on repeated occasions. Roof is a low pitch (3/12 or 4/12). I have not had access to the roof yet, and there’s no interior access to the attic which would allow me to see the underside of the roof. There is damage on the inside of the house next to this exhaust stack, which has rotted the King and Jack studs as well as the fascia boards of the entrance between the original part of the house in the addition. I would suspect additional damage here, but I will not know how much until I start tearing out drywall.

The other concern, is that there is no heat ducts running into the addition. The addition is only about 12 by 16, and the original house is less than 800 square feet. The “doorway” from the original house into the addition is approximately 6 feet wide, which will allow some air movement, but I question if this will be adequate in our colder lower Michigan winters.

The house is a REO that I can pick up for about $7000 and rent out for $400 per month. Positive cash flow is my goal, not rehabs or flips. ARV will be around $30,000 but if I really wanted to sell it I would expect more likely around $20,000. There is a large difference between what houses list for (and die on the vine waiting for that one buyer) and selling the house and 4-8 weeks.

Looking forward to your two cents and TIA!