tnrkitect: (Default)
Now that we have determined that we personally can not make the numbers work for this investment, I will share with others.

There is a house in our neighborhood that has been for sale for a good portion of the last year. It is a cute, stick framed house, with a sizable porch on it built in 1899. see? Property Listing with exterior photos  It is a 3 bedroom, 1 bath house in a walkable neighborhood close to downtown and the university. From looking at the layout of the house, it was originally configured as a 2 bedroom with a kitchen, dining room, living room and a back porch, with toilet facilities via an outhouse in the back yard. However, previous owners had enclosed the back porch in to a bathroom and galley kitchen, making the previous kitchen a dining room, and the dining room a 3rd bedroom. This means that the 3rd bedroom has a very nice built in hutch beside the fireplace. The house does have electric central heat and air conditioning.

It is a repossession and as the year has progressed, the price for the house kept dropping. It is now only $35,900 for a 3 bedroom, 1 bath house which the city appraised this year for $66,600.

3 bedroom, 1 bath houses RENT for around $750 - $800 in this city, Which is equivalent to a monthly mortgage payment on a $100K + house at current rates.

On the surface, this looked like a good opportunity, so we decided to investigate further.

We asked a friendly local Realtor, Suzy Trotta, to show us the house earlier in the week so I could assess what sort of work was needed to get it to a rentable condition.

Upon entering, we discovered that the original wood floors had all been covered over with a brown shaggy carpet. 
action item 1: pull up carpets. assess condition of floors and either refinish or re-carpet.

Previous owners had also lowered the original 10 ft. ceiling to 8 ft. by installing a 12"x12" acoustic tile drop ceiling into the space. It is in fairly good condition, needing only 1 tile replaced near the light fixture that was hanging from the hall ceiling.
action item 2: replace ceiling tile, repair light in hall.

At some point, the previous owners had installed (cheap) wood paneling over the existing plaster and lathe walls in all the rooms, and painted over it in most rooms. Although I and my wife personally prefer the look of the plaster, for rental purposes the paneling was adequate. A coat of paint would suffice to spruce things up.
action item 3: paint or repaint the paneling in all the rooms.

The house has a total of 4 fireplaces connected to two chimneys. They are located in the living room and all three bedrooms, however they have the metal inserts to close them off from use, and previous owners had used Great Stuff liquid expanding foam insulation to "caulk" the cracks. There would need to be a little clean up of the sloppy use of the Great Stuff, but for the most part nothing else.
action item 4: trim back the foam at the fireplaces to not be so messy and noticeable.

There is a dining room with linoleum tile for flooring, but the refrigerator and washer and dryer connections are located in there. Also floor is weak in the middle of the room.
action item 4: repair / replace floor and needed floor joists, replace finish floor material.

There is a very narrow galley style kitchen, with a dishwasher and double bowl stainless steel sink in a counter top with matching cabinets above and a tile backsplash that needs repair along the exterior wall. The hot water heater is under a countertop along the interior wall hidden by a curtain, beside the stove.
action item 5: repair backsplash, reconfigure kitchen to be more useable.

The bathroom is small, but efficient, with a claw foot tub with shower bar that is in very good condition. There is not much that needs to be done in here from what I can tell.
action item 6: clean bathroom.

The house sits on a brick foundation that looks to be in good shape, however there are no foundation vents. The crawlspace is about 3 feet high, and looks to be dry, but there is no vapor barrier down, nor is there any insulation in the floor. The plumbing has been updated, with copper supply and PVC  waste pipes. The Heating and Air ducts are routed in the crawlspace and are insulated.
action item 6: service heating and air unit.
action item 7: either: a - insulate the floor and the plumbing. or b - insulate the perimeter foundation walls, keeping the crawl space as "heated" space to keep the pipes from freezing.
action item 8: put down a vapor barrier.

The electrical box is mounted on the exterior of the house by the kitchen and dining room. It is still the old bus fuse style box, most likely a 60 amp service.
action item 9: upgrade the electrical to a modern 100 or 200 amp service with circuit breakers.
action item 10: check wiring to insure that it is not in dire need of updating.

The back yard has a wooden privacy fence around it, and there is a small metal shed for garden tools. The fence has a drive through gate at the rear on the alley. All of the shade is from neighbors' trees, though there are some ornamental bushes along the side of the house that are overgrown and need trimming.
action item 11: trim bushes, and clean up yard.

The roof is in good shape, so no work needed there. I have no clue as to the amount of insulation in the walls or attic, as the only attic access I saw was a tiny 18" x 18" hatch in the top of one closet, and I am a bit larger than that.

We feel we could accomplish all of the action items listed above (except updating of the wiring if it needed it) for about $12,000. That is contingent upon doing most of the work ourselves, and hiring out the electrical. If someone were to hire a contractor to do it all, the price would be higher. This would have included reconfiguring the kitchen and dining rooms along with the end of the hall to make the space more open and useable. if someone was interested in the property, I would be happy to put together a building permit codes submittal package (for a fee of course. ;-)

As you can see from the above, there is quite a bit of work needed to get the house rentable. Knowing what needed to be done, we were not able to make the numbers work out to our satisfaction, but someone else may be able to do so.

If you know someone who is interested in flipping or fixing up for rental, feel free to share the link with them. For now, we will pass.


tnrkitect: (Default)
tnrkitect - Musings of an Unconventional Mind

June 2011



RSS Atom

Most Popular Tags

Style Credit

Expand Cut Tags

No cut tags
Page generated Oct. 23rd, 2017 04:08 am
Powered by Dreamwidth Studios