Dream house or money pit?
March 30, 2012 9:39 PM Subscribe
Buying a fixer upper worth it?
I'm considering buying a very small, very old house. It looks just awful. The walls are a disaster. Half the wood floors need to be refinished and the other half of the house has super crappily installed new floors. Basically none of the finishing work has been done and there are various places with odd holes in the wall. It needs new windows and some other cosmetic stuff. The good news is it appears all the major systems have been upgraded. I would need to put in a new bathroom, but nothing structural. While people have been living in it, I do not consider it livable in its current state I would need to fix the walls, paint, the moldings, refinish and fix the floor, and redo the bathroom before moving in. This seems very daunting, but a lot of people are telling me that those things are relatively cheap and quick fixes.
That being said the location is fantastic and it will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach, to put it mildly.
I'm having trouble envisioning what it could be because right now it's a dark, ugly mess that looks slapped together. Assuming an incredibly thorough inspection came back clean, are these renovations really just a couple days each without much chance of complications? I would really like to hear people's experiences about whether it was worth it or whether it was a nightmare.
I'm considering buying a very small, very old house. It looks just awful. The walls are a disaster. Half the wood floors need to be refinished and the other half of the house has super crappily installed new floors. Basically none of the finishing work has been done and there are various places with odd holes in the wall. It needs new windows and some other cosmetic stuff. The good news is it appears all the major systems have been upgraded. I would need to put in a new bathroom, but nothing structural. While people have been living in it, I do not consider it livable in its current state I would need to fix the walls, paint, the moldings, refinish and fix the floor, and redo the bathroom before moving in. This seems very daunting, but a lot of people are telling me that those things are relatively cheap and quick fixes.
That being said the location is fantastic and it will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach, to put it mildly.
I'm having trouble envisioning what it could be because right now it's a dark, ugly mess that looks slapped together. Assuming an incredibly thorough inspection came back clean, are these renovations really just a couple days each without much chance of complications? I would really like to hear people's experiences about whether it was worth it or whether it was a nightmare.
Response by poster: If it doesnt I'll have provisions to get out of the contract. I'm not, I'll be hiring people. I do have a lot of friends with a lot of experience owning old houses in our area who have a lot of good contractors to use.
posted by whoaali at 9:47 PM on March 30, 2012
posted by whoaali at 9:47 PM on March 30, 2012
Unless you're planning to pay someone to do the repairs -- would this be the first time you are putting up walls, putting down floors, installing sinks and toilets and so on? -- the fact that you're asking these questions means you're probably not ready for a project like this. From your description, the people telling you that the fixes are "cheap and quick" either a) have absolutely no idea what they're talking about or b) have a level of expertise you probably do not, as you seem to be relying on their opinion and not your own, and therefore, what's cheap and quick to them probably will not be cheap and quick for you.
posted by griphus at 9:47 PM on March 30, 2012
posted by griphus at 9:47 PM on March 30, 2012
Get your friends' contractors to estimate costs for doing what's needed. If you're happy with that, and if the inspection doesn't find structural problems, go for it. It may take longer than you expect but it sounds like a place that puts off most buyers and thus could be a deal.
posted by anadem at 9:50 PM on March 30, 2012 [2 favorites]
posted by anadem at 9:50 PM on March 30, 2012 [2 favorites]
Response by poster: I won't be doing any of it, but I would obviously need to hire and manage the situation. My projections put the basic repairs, floors, walls, and bathroom at around 20k and then probably another 5-10k for the things I can put off. Everyone seems to think those numbers are high.
posted by whoaali at 9:51 PM on March 30, 2012
posted by whoaali at 9:51 PM on March 30, 2012
Are you paying all cash for this house? One thing I didn't consider when bidding on my "fixer upper" was the fact that my mortgage company would refuse to loan on the house in it's current state, and as it's a foreclosure, the sellers weren't willing to put any work into it. I'm actually glad I made my mortgage company do their appraisal before I hired an inspector. If we had decided to pass on the house, we would have only been out the $300 for the appraisal, as opposed to the $600+ for the inspection.
We ended up getting a 201k, and we close next week!
posted by dogmom at 10:10 PM on March 30, 2012
We ended up getting a 201k, and we close next week!
posted by dogmom at 10:10 PM on March 30, 2012
That sounds reasonable to me if you don't go high end and yeah those are all cosmetic fixes that are relatively easy and quick. you can still make the place stylish and modern by choosing colors and textures well in that budget.
Some numbers:
floor refinishing: $3-4/ sq foot. Get a GOOD refinisher, especially if the floors are uneven.
Laminate or pre-finished wood installation: Home Depot or Lowes run deals on installation all the time and will bargain with you $200+ carpet is a $50-100 a room give or take.
Bathroom fittings: you can buy all the fittings for under $1000 easy, installation is 4-5 days if there's a lot of tiling or plumbing needs redoing, a matter of a day or two if not. You can install a toilet and vanity by yourself even if you've never done it before in an afternoon with a couple hand tools as long as you have standard fittings.
Drywall: a good crew of two can re-drywall and mud the entire house in 2-3 days. this is highly recommended over trying to patch it if there's a lot of damage.
Paint: $500-700 for the interior of the house. This you can do yourself. Figure $1-2K for the exterior if it's small and one story and you pay someone.
Trim work: this is tedious and time consuming but a handyman type can do it so you can save some money there.
What will kill your budget stone dead is asbestos or lead abatement so check for those during the inspection. Test anything suspicious like mastic or insulation, the tests are about $20/each. Also wiring. Make sure it's safe. re-wiring a small house is $5-10K, depending if you need a new box and how hard it is to access stuff.
Assume you'll spend 50-100% more than your budget. If you don't then yay but the odds of not finding any additional problems are low. For example, if the shower was leaking you might have to replace some wall studs or replace some window casings or windows even if they leaked at some point or are warped. Windows are heap, installing and trimming them isn't. Also if you are redoing the drywall you may as well may sure the insulation is as good as possible so that's a possible budget item too. A general contractor will be able to make these additional repairs pretty easily as they come up and won't overcharge but be aware that tearing into walls in an old house is a crapshoot at best.
posted by fshgrl at 10:15 PM on March 30, 2012 [6 favorites]
Some numbers:
floor refinishing: $3-4/ sq foot. Get a GOOD refinisher, especially if the floors are uneven.
Laminate or pre-finished wood installation: Home Depot or Lowes run deals on installation all the time and will bargain with you $200+ carpet is a $50-100 a room give or take.
Bathroom fittings: you can buy all the fittings for under $1000 easy, installation is 4-5 days if there's a lot of tiling or plumbing needs redoing, a matter of a day or two if not. You can install a toilet and vanity by yourself even if you've never done it before in an afternoon with a couple hand tools as long as you have standard fittings.
Drywall: a good crew of two can re-drywall and mud the entire house in 2-3 days. this is highly recommended over trying to patch it if there's a lot of damage.
Paint: $500-700 for the interior of the house. This you can do yourself. Figure $1-2K for the exterior if it's small and one story and you pay someone.
Trim work: this is tedious and time consuming but a handyman type can do it so you can save some money there.
What will kill your budget stone dead is asbestos or lead abatement so check for those during the inspection. Test anything suspicious like mastic or insulation, the tests are about $20/each. Also wiring. Make sure it's safe. re-wiring a small house is $5-10K, depending if you need a new box and how hard it is to access stuff.
Assume you'll spend 50-100% more than your budget. If you don't then yay but the odds of not finding any additional problems are low. For example, if the shower was leaking you might have to replace some wall studs or replace some window casings or windows even if they leaked at some point or are warped. Windows are heap, installing and trimming them isn't. Also if you are redoing the drywall you may as well may sure the insulation is as good as possible so that's a possible budget item too. A general contractor will be able to make these additional repairs pretty easily as they come up and won't overcharge but be aware that tearing into walls in an old house is a crapshoot at best.
posted by fshgrl at 10:15 PM on March 30, 2012 [6 favorites]
Do you have enough cash to pay for it in full? No lender is going to approve that loan, even if your credit is stellar, and you'll have a hell of a time getting the underwriter to sign off on it even if you find a lender who might be willing to work with you.
posted by halogen at 10:53 PM on March 30, 2012
posted by halogen at 10:53 PM on March 30, 2012
What are fixed-up houses of the same size in the same neighborhood going for? That's probably what you'll end up paying in the purchase and with the repairs. I'd walk through with a licensed contractor who isn't a friend. Assume it'll take twice as long and cost twice as much as the estimate. It's also so easy to upgrade. Sure, you can get a decent faucet for $X, but you can a really beautiful one for $2X. It all adds up fast.
How's the kitchen? Kitchen and bathrooms can be really pricey.
There's a saying I think seems to hold true:
Cheap, fast, and good: pick two.
I'm currently two years into owning a fixer-upper that has taken way longer than we expected because we haven't been able to throw tons of money at it. And my husband is actually a professional carpenter and contractor, and we've built one house and fixed up another already.
posted by bluedaisy at 12:01 AM on March 31, 2012 [3 favorites]
How's the kitchen? Kitchen and bathrooms can be really pricey.
There's a saying I think seems to hold true:
Cheap, fast, and good: pick two.
I'm currently two years into owning a fixer-upper that has taken way longer than we expected because we haven't been able to throw tons of money at it. And my husband is actually a professional carpenter and contractor, and we've built one house and fixed up another already.
posted by bluedaisy at 12:01 AM on March 31, 2012 [3 favorites]
Assume it'll take twice as long and cost twice as much as the estimate.
I endorse this statement 100%. A good general contractor can generally keep it under control, but shit happens. Remember that you're on the hook for anything that gets revealed during the project. Everything has be up to code, no matter how much extra work that entails.
I won't be doing any of it, but I would obviously need to hire and manage the situation. My projections put the basic repairs, floors, walls, and bathroom at around 20k and then probably another 5-10k for the things I can put off. Everyone seems to think those numbers are high.
Has 'everyone' done anything like this before? Have you? I would be extremely cautious getting into something like this if you don't have personal experience with that kind of work, or at least a contractor you have complete faith in. And by that, I mean someone you trust and who has personal experience doing the work endorses them. The problem is that these kind of projects can go bad very quickly. There are some things that you just can't find until you start ripping back the surface and by that point it's too late to change your mind. The issues you describe should be fairly quick fixes, but what worries me is what might be underneath. You don't typically cover quality wiring and plumbing with crap, and a house that old may be due for some structural work as well. Again, anything you touch probably has to be brought all the way up to code. Depending on your area, there have been some pretty big changes over the years.
I'm not saying you should run away, but make sure you do your due diligence very, very carefully. Get estimates and opinions from a few different contractors. Ask a lot of questions and be thorough. Plan for a worst case scenario. Can you handle it costing twice as much as you expect or taking twice as long? A fixer-upper done right is pretty awesome and can save you a pile of money, but a bad one is a hell you get to live in. Make sure you know exactly what you're getting into.
posted by vohk at 12:55 AM on March 31, 2012
I endorse this statement 100%. A good general contractor can generally keep it under control, but shit happens. Remember that you're on the hook for anything that gets revealed during the project. Everything has be up to code, no matter how much extra work that entails.
I won't be doing any of it, but I would obviously need to hire and manage the situation. My projections put the basic repairs, floors, walls, and bathroom at around 20k and then probably another 5-10k for the things I can put off. Everyone seems to think those numbers are high.
Has 'everyone' done anything like this before? Have you? I would be extremely cautious getting into something like this if you don't have personal experience with that kind of work, or at least a contractor you have complete faith in. And by that, I mean someone you trust and who has personal experience doing the work endorses them. The problem is that these kind of projects can go bad very quickly. There are some things that you just can't find until you start ripping back the surface and by that point it's too late to change your mind. The issues you describe should be fairly quick fixes, but what worries me is what might be underneath. You don't typically cover quality wiring and plumbing with crap, and a house that old may be due for some structural work as well. Again, anything you touch probably has to be brought all the way up to code. Depending on your area, there have been some pretty big changes over the years.
I'm not saying you should run away, but make sure you do your due diligence very, very carefully. Get estimates and opinions from a few different contractors. Ask a lot of questions and be thorough. Plan for a worst case scenario. Can you handle it costing twice as much as you expect or taking twice as long? A fixer-upper done right is pretty awesome and can save you a pile of money, but a bad one is a hell you get to live in. Make sure you know exactly what you're getting into.
posted by vohk at 12:55 AM on March 31, 2012
Are you paying all cash for this house? One thing I didn't consider when bidding on my "fixer upper" was the fact that my mortgage company would refuse to loan on the house in it's current state, and as it's a foreclosure, the sellers weren't willing to put any work into it.
Yes, this exactly. I had excellent credit but couldn't get a conventional mortgage to buy my house, which needed what I considered to be fairly minor repairs (patching some siding, replacing the water heater, plumbing issues from it having been vacant for years). I had to get a renovation mortgage, which ultimately closed, but the process was a nightmare: we were in escrow for over three months, Wells Fargo was a nightmare to work with and had no concept of timeliness, the seller almost walked away (and I almost lost the house) because the closing kept getting extended, and even more crap which I won't go into here. It was absolutely horrible. If I'd had the cash to buy it outright, I would have. My experience is not unusual, sorry to say.
Getting a renovation mortgage also meant that the bank mandated certain repairs that I would not have prioritized: the required the burglar bars be removed, for instance. You have to do it the bank's way and on their timeline.
I'm having trouble envisioning what it could be because right now it's a dark, ugly mess that looks slapped together.
I dunno, I kind of think if it's the right house for you you'd love it and see its potential even in its current state. When I was looking I saw several absolutely beautiful, crumbling wrecks of houses that I passed on not because I didn't think I could love them but because, practically speaking, the work they needed was beyond (sometimes WAY beyond) what I felt capable of dealing with.
posted by Violet Hour at 1:02 AM on March 31, 2012 [1 favorite]
Yes, this exactly. I had excellent credit but couldn't get a conventional mortgage to buy my house, which needed what I considered to be fairly minor repairs (patching some siding, replacing the water heater, plumbing issues from it having been vacant for years). I had to get a renovation mortgage, which ultimately closed, but the process was a nightmare: we were in escrow for over three months, Wells Fargo was a nightmare to work with and had no concept of timeliness, the seller almost walked away (and I almost lost the house) because the closing kept getting extended, and even more crap which I won't go into here. It was absolutely horrible. If I'd had the cash to buy it outright, I would have. My experience is not unusual, sorry to say.
Getting a renovation mortgage also meant that the bank mandated certain repairs that I would not have prioritized: the required the burglar bars be removed, for instance. You have to do it the bank's way and on their timeline.
I'm having trouble envisioning what it could be because right now it's a dark, ugly mess that looks slapped together.
I dunno, I kind of think if it's the right house for you you'd love it and see its potential even in its current state. When I was looking I saw several absolutely beautiful, crumbling wrecks of houses that I passed on not because I didn't think I could love them but because, practically speaking, the work they needed was beyond (sometimes WAY beyond) what I felt capable of dealing with.
posted by Violet Hour at 1:02 AM on March 31, 2012 [1 favorite]
I am in a nightmare fixer-upper. Is it worth it? It may work out great for you, but in my case, it has not been worth it.
One thing people talked about but that I didn't understand was "risk." They'd say, "this could be great, but by buying this place, you're taking on a higher level of risk." That was too nebulous for me to grasp at the time. "Risk," it turns out, is the X% chance that things will go extremely wrong. I hope for you that everything will go fine. But what happens if everything goes wrong? How likely is that? The least you can do is manage your risk by looking for risks and trying to rule those possibilities out.
Here's what I mean about looking for risk. You write, "the other half of the house has super crappily installed new floors." Well, what is beneath these new floors and why are they so crappily installed? Are they crappily installed because the installer sucks at installing? Or, are they bouncy and uneven because your subfloors are uneven, becase the joists below are a cobbled-together mess? Is that because the foundation on one side is crumbling? Might you have to redo not just the finish flooring but the subfloors, floor joists, and/or foundation?
You write, "basically none of the finishing work has been done." Well, that's interesting. Why did the seller run out of money halfway through fixing it up and sell it / rent it to people willing to live in a place that you wouldn't? And why are they selling it now instead of renting it or fixing it further? Leading up to that decision, did they take any shortcuts? "The good news is it appears all the major systems have been upgraded" .... by the same people who can't even install flooring. I would want to see all the records of that work: the contract, the contractors' license history, the permits, the notices of correction. Seeing all that could be hugely informative.
And why was the bathroom not finished? If they managed to upgrade all the major systems, why could they not slap down some vinyl flooring and buy one of the many bathroom fixture combo deals at Home Depot? Is it because the rough plumbing doesn't work either? Is it because the sewer line can't handle two working bathrooms without backing sewage up into the downstairs tub? Either one of those problems could be $10k or more.
"It will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach, to put it mildly." To me, this is a red flag. Why haven't all the other smart contractor types bought this house yet? Your angle on the situation should not be "what is the upside?" but "what are the risks? how likely is that? how can I be sure that this risk will not happen to me?"
"I would need to fix the walls, paint, the moldings, refinish and fix the floor, and redo the bathroom before moving in. This seems very daunting, but a lot of people are telling me that those things are relatively cheap and quick fixes." Those things are, in fact, relatively superficial (if by "walls" you mean "patching holes in the drywall"). Windows, though, aren't trivial and can cost $10k+ or even more. But the scary part is that you might find out that you have to do more than this. This is actually fairly likely. When you say, "I'm considering buying a very small, very old house," I think "there is no way there aren't structural deficiencies." You may not have to fix them yourself. It really all depends on how the construction goes.
"Assuming an incredibly thorough inspection came back clean." Yes, this is one critical step. How are you going to get this incredibly thorough inspection done? There are numerous potential inspectors, and many won't give you what you need here. Do you have that question figured out? The other critical step will be figuring out what it will cost to do all of that, maybe by having a few contractors out to give bids.
I say all this not to be paranoid or harsh. I just want to point out some of the negative possibilities that you might seek to rule out. If in doubt, I wouldn't do it.
posted by slidell at 1:09 AM on March 31, 2012 [25 favorites]
One thing people talked about but that I didn't understand was "risk." They'd say, "this could be great, but by buying this place, you're taking on a higher level of risk." That was too nebulous for me to grasp at the time. "Risk," it turns out, is the X% chance that things will go extremely wrong. I hope for you that everything will go fine. But what happens if everything goes wrong? How likely is that? The least you can do is manage your risk by looking for risks and trying to rule those possibilities out.
Here's what I mean about looking for risk. You write, "the other half of the house has super crappily installed new floors." Well, what is beneath these new floors and why are they so crappily installed? Are they crappily installed because the installer sucks at installing? Or, are they bouncy and uneven because your subfloors are uneven, becase the joists below are a cobbled-together mess? Is that because the foundation on one side is crumbling? Might you have to redo not just the finish flooring but the subfloors, floor joists, and/or foundation?
You write, "basically none of the finishing work has been done." Well, that's interesting. Why did the seller run out of money halfway through fixing it up and sell it / rent it to people willing to live in a place that you wouldn't? And why are they selling it now instead of renting it or fixing it further? Leading up to that decision, did they take any shortcuts? "The good news is it appears all the major systems have been upgraded" .... by the same people who can't even install flooring. I would want to see all the records of that work: the contract, the contractors' license history, the permits, the notices of correction. Seeing all that could be hugely informative.
And why was the bathroom not finished? If they managed to upgrade all the major systems, why could they not slap down some vinyl flooring and buy one of the many bathroom fixture combo deals at Home Depot? Is it because the rough plumbing doesn't work either? Is it because the sewer line can't handle two working bathrooms without backing sewage up into the downstairs tub? Either one of those problems could be $10k or more.
"It will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach, to put it mildly." To me, this is a red flag. Why haven't all the other smart contractor types bought this house yet? Your angle on the situation should not be "what is the upside?" but "what are the risks? how likely is that? how can I be sure that this risk will not happen to me?"
"I would need to fix the walls, paint, the moldings, refinish and fix the floor, and redo the bathroom before moving in. This seems very daunting, but a lot of people are telling me that those things are relatively cheap and quick fixes." Those things are, in fact, relatively superficial (if by "walls" you mean "patching holes in the drywall"). Windows, though, aren't trivial and can cost $10k+ or even more. But the scary part is that you might find out that you have to do more than this. This is actually fairly likely. When you say, "I'm considering buying a very small, very old house," I think "there is no way there aren't structural deficiencies." You may not have to fix them yourself. It really all depends on how the construction goes.
"Assuming an incredibly thorough inspection came back clean." Yes, this is one critical step. How are you going to get this incredibly thorough inspection done? There are numerous potential inspectors, and many won't give you what you need here. Do you have that question figured out? The other critical step will be figuring out what it will cost to do all of that, maybe by having a few contractors out to give bids.
I say all this not to be paranoid or harsh. I just want to point out some of the negative possibilities that you might seek to rule out. If in doubt, I wouldn't do it.
posted by slidell at 1:09 AM on March 31, 2012 [25 favorites]
Look at recent comparable sales in the area to get an idea of what similar properties are worth after they're fixed up to the level you'd fix this one up to. From that guessed-at future value, subtract:
1. The cost of the house as it is.
2. The cost of all apparent necessary repairs and improvements, doubled to cover the ones that aren't apparent.
3. The amount someone would have to pay you for your time to research and understand all these repairs, to find service providers and coordinate the work.
4. The cost of maintaining a separate residence while waiting for the initial work to be done before you can move in.
5. The amount someone would have to pay you to live in a dusty, noisy, unfinished and less than fully private place for the duration of the work that's done after you move in.
Since you don't have experience doing this sort of thing, be especially conservative with your estimates. Assume the fixed-up value will be lower than you want to believe it will be. Assume all the costs will be higher and the inconveniences more annoying and longer-lasting than you imagine. If you do this calculation and find that you're not coming up with a strongly positive number, then the costs probably exceed the benefits and you should not do this.
the location is fantastic and it will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach
This 'diamond in the rough' idea is usually a fantasy. If this property has been on the market for longer than five minutes, other people who know more than you do will have looked at it and decided it's not a good deal. If it were going to be so easy to fix the place up and come out on top, someone else would probably have already bought it.
posted by jon1270 at 3:02 AM on March 31, 2012 [3 favorites]
1. The cost of the house as it is.
2. The cost of all apparent necessary repairs and improvements, doubled to cover the ones that aren't apparent.
3. The amount someone would have to pay you for your time to research and understand all these repairs, to find service providers and coordinate the work.
4. The cost of maintaining a separate residence while waiting for the initial work to be done before you can move in.
5. The amount someone would have to pay you to live in a dusty, noisy, unfinished and less than fully private place for the duration of the work that's done after you move in.
Since you don't have experience doing this sort of thing, be especially conservative with your estimates. Assume the fixed-up value will be lower than you want to believe it will be. Assume all the costs will be higher and the inconveniences more annoying and longer-lasting than you imagine. If you do this calculation and find that you're not coming up with a strongly positive number, then the costs probably exceed the benefits and you should not do this.
the location is fantastic and it will allow me to buy a place about 50% larger than any condo I could afford. It's also significantly cheaper than most of the other places I've considered and to top it off it has a big yard and parking. Which I thought were well beyond my reach
This 'diamond in the rough' idea is usually a fantasy. If this property has been on the market for longer than five minutes, other people who know more than you do will have looked at it and decided it's not a good deal. If it were going to be so easy to fix the place up and come out on top, someone else would probably have already bought it.
posted by jon1270 at 3:02 AM on March 31, 2012 [3 favorites]
I am a real estate investor. I own 9 homes. Every property I buy is distressed, and needs lots of work. Fixer-uppers are the best investment.
However, if you do not have the stomach to over-see the repairs process, nor the creative vision to see the final goal - then I would be wary. A construction project can be tiresome and difficult. And, if you can't see the end, then it may turn out a mess, since you are not sure what to aim for.
posted by Flood at 4:29 AM on March 31, 2012 [2 favorites]
However, if you do not have the stomach to over-see the repairs process, nor the creative vision to see the final goal - then I would be wary. A construction project can be tiresome and difficult. And, if you can't see the end, then it may turn out a mess, since you are not sure what to aim for.
posted by Flood at 4:29 AM on March 31, 2012 [2 favorites]
If you don't know how to do the work yourself (not that you need to do the work yourself but you need to know how to do the work to really understand what you're getting into), run like hell.
I bought a 1901 fixer-upper years ago with a shit roof. The roof was shit because the owners were using it as an investment property, hired the cheapest guys in town, and wound up with an inappropriate solution for the flat sections of the roof. The property had been sitting on the market for months with a leaky roof so I low-balled the hell out of them and they took the deal without hesitation.
Difference between me and you: I worked doing roofing during the summers in high school and college and knew exactly what it would take to get things under control. I knew I was getting the upper hand on the deal because I knew the previous owners were incompetent property managers who needed to unload the house for the specific problem of the shit roof, which I was able to remedy myself for the cost of my labor and $1500 of materials.
posted by ferdinand.bardamu at 4:33 AM on March 31, 2012 [1 favorite]
I bought a 1901 fixer-upper years ago with a shit roof. The roof was shit because the owners were using it as an investment property, hired the cheapest guys in town, and wound up with an inappropriate solution for the flat sections of the roof. The property had been sitting on the market for months with a leaky roof so I low-balled the hell out of them and they took the deal without hesitation.
Difference between me and you: I worked doing roofing during the summers in high school and college and knew exactly what it would take to get things under control. I knew I was getting the upper hand on the deal because I knew the previous owners were incompetent property managers who needed to unload the house for the specific problem of the shit roof, which I was able to remedy myself for the cost of my labor and $1500 of materials.
posted by ferdinand.bardamu at 4:33 AM on March 31, 2012 [1 favorite]
I agree with Flood - you need to have the stomach to oversee things and the creative vision to really make the most of a fixer-upper. I have found with renovating houses that it is best to spend a LOT of time planning and re-drawing/modeling before you even think about lifting a hammer or ordering supplies. The temptation for newbies is to start on a range of smaller jobs to get by, but this costs more in the long run than suffering through very basic repairs to make it habitable and then making long term sensible decisions. Plumbing and electrics are expensive - sure you can get deals on fittings but plumbers and electricians are expensive necessities. Get the job done properly first time, don't take on big jobs in dribs and drabs. You also need to get a handle on the building processes you're overseeing. I didn't know what I was looking for to make sure I got the most out of the people I hired at first. You get better work when you speak the language and know the processes. I was lucky that I have a building family with a bunch of old-school trades under their belt - and tools I could use when I needed them.
Location and parking and space are all great things, so I would persevere if the structural report isn't too daunting. I felt overwhelmed when I bought my first place, and some things often felt insurmountable. [Hello, tree roots growing into all the pipes stuck under two courses of concrete flooring.] There were tears, but my efforts have paid off on a structurally unsound, poorly wired, disgustingly plumbed purchase. I really enjoy my now-renovated home which has a ton of space and everything how I want it. That's the luxury of a fixer-upper if you have the vision.
posted by honey-barbara at 4:54 AM on March 31, 2012 [1 favorite]
Location and parking and space are all great things, so I would persevere if the structural report isn't too daunting. I felt overwhelmed when I bought my first place, and some things often felt insurmountable. [Hello, tree roots growing into all the pipes stuck under two courses of concrete flooring.] There were tears, but my efforts have paid off on a structurally unsound, poorly wired, disgustingly plumbed purchase. I really enjoy my now-renovated home which has a ton of space and everything how I want it. That's the luxury of a fixer-upper if you have the vision.
posted by honey-barbara at 4:54 AM on March 31, 2012 [1 favorite]
Response by poster: So the house is a mishmash because some things were clearly done professionally, like the siding and the water heater and a/c. And given the brand names of all the appliances that are brand new they weren't done cheap. Then it appears the owner and his roommate tried to the easier stuff themselves and failed miserably. Like they put down the flooring until they got to the edges and realized oops we never figured out how we were going to cut this at the right angle to make it flush with the wall. The house basically looks like an abandoned frat house or rather what I imagine one to look like (obviously its not). The bathroom is clearly not more than 20-30 years old, it's just horribly maintained. The one thing that makes me feel better about the place is that there are so many things that could easily have been hidden from view with not a lot of money to make the place look a million times better and they haven't done any of it. The owner has also listed in detail everything he thinks needs to be done. The house has only been on the market a few days. I'm the first to look at it.
As far as the windows go there are only probably 7 windows in the whole house and only three seem like they really need to be repaired. I just had a friend replace similar windows in her house (and hers were the worst case scenarios custom fit historic ones) so I am quite comfortable with my estimate of that price.
The roof has been resealed, but it looks like there was some damage before that happened.
I would be financing with a conventional loan and would be using my savings and getting help from my family.
The price of the place plus repairs would still be well below what I would pay for a similar property. I could end up spending triple on repairs and still break even. Also there just aren't many houses of this size in this location with this big yard attached, so the chances of a similar fully renovated place coming on the market is slim.
I'm definitely feeling wary, but it also could be a huge opportunity.
posted by whoaali at 5:20 AM on March 31, 2012
As far as the windows go there are only probably 7 windows in the whole house and only three seem like they really need to be repaired. I just had a friend replace similar windows in her house (and hers were the worst case scenarios custom fit historic ones) so I am quite comfortable with my estimate of that price.
The roof has been resealed, but it looks like there was some damage before that happened.
I would be financing with a conventional loan and would be using my savings and getting help from my family.
The price of the place plus repairs would still be well below what I would pay for a similar property. I could end up spending triple on repairs and still break even. Also there just aren't many houses of this size in this location with this big yard attached, so the chances of a similar fully renovated place coming on the market is slim.
I'm definitely feeling wary, but it also could be a huge opportunity.
posted by whoaali at 5:20 AM on March 31, 2012
Response by poster: After sleeping on it, I'm feeling far less hopeful about. Given the horrible reputation of contractors for ripping people off, I worry I'd be an easy mark even with good recommendations.
posted by whoaali at 5:36 AM on March 31, 2012
posted by whoaali at 5:36 AM on March 31, 2012
Buying a home that needs significant work can be a great experience, but it will not be cheap. From the sounded your post, you are taking out a sizable loan for a first property; that means that you likely do not have the cash on hand to fix the myriad problems you aren't seeing or thinking about yet.
Floors, walls, and plumbing are wrong? Then the entire house is suspect. You need to do what is typically classified under due diligence: you need to know who did what work, whether permits were pulled, when the work was done, why it wasn't complete properly, and so on. Furthermore, you need an Excellent Inspection, not just one that comes back clean. Hell, any inspection that comes back clean is suspect - homes have issues, and need maintenance, and a good inspector will flag all of that for you. A crappy inspection might tell you all is well, but remember that you have no recourse when it turns out that your inspector was crap.
Find an inspector who has a background in one of the trades, or who was a municipal building inspector prior to going private. Make sure he or she has no affiliation with any contractor. Ask for 3-6 references, and call each and every one of them. Make sure you are hiring someone who is extremely competent. Pay top dollar (if you are serious), and ask for them to perform a detailed inspection BEFORE you put in an offer. Attend the inspection, pay very close attention, and ask a lot of questions.
Sounds too expensive and scary? You aren't ready to buy a fixer-upper of tis magnitude.
posted by ellF at 5:56 AM on March 31, 2012
Floors, walls, and plumbing are wrong? Then the entire house is suspect. You need to do what is typically classified under due diligence: you need to know who did what work, whether permits were pulled, when the work was done, why it wasn't complete properly, and so on. Furthermore, you need an Excellent Inspection, not just one that comes back clean. Hell, any inspection that comes back clean is suspect - homes have issues, and need maintenance, and a good inspector will flag all of that for you. A crappy inspection might tell you all is well, but remember that you have no recourse when it turns out that your inspector was crap.
Find an inspector who has a background in one of the trades, or who was a municipal building inspector prior to going private. Make sure he or she has no affiliation with any contractor. Ask for 3-6 references, and call each and every one of them. Make sure you are hiring someone who is extremely competent. Pay top dollar (if you are serious), and ask for them to perform a detailed inspection BEFORE you put in an offer. Attend the inspection, pay very close attention, and ask a lot of questions.
Sounds too expensive and scary? You aren't ready to buy a fixer-upper of tis magnitude.
posted by ellF at 5:56 AM on March 31, 2012
Major reno without a trustworthy general contractor is a part time job at best. And it's not the kind of part time job that you can just shut your brain off for. It's a high stress, high risk job with a lot of money in play, and a lot of players who are after it who don't have your best interest in mind. Just one caveat you'll be dealing with: a subcontractor who will be well behaved with a general because he wants more business from him might not be as diligent on the job or as quick to follow up when he's just dealing with the homeowner.
What I would suggest, and this is only me, is if you're going to have to have multiple systems redone, hire someone reputable and well known by the trades to manage it. Then, everyone has some skin in the game.
If this is your first home buying experience, I would suggest not buying a fixer-upper.
posted by seanmpuckett at 5:59 AM on March 31, 2012 [1 favorite]
What I would suggest, and this is only me, is if you're going to have to have multiple systems redone, hire someone reputable and well known by the trades to manage it. Then, everyone has some skin in the game.
If this is your first home buying experience, I would suggest not buying a fixer-upper.
posted by seanmpuckett at 5:59 AM on March 31, 2012 [1 favorite]
Lots of good advice. I -- owner of a slight fixer-upper, nothing of this magnitude -- just want to mention the problem of "mission creep," where you fix the baseboards and happen to spot crown moulding on sale and think: I could get the carpenter to put that in while he's doing the baseboards; it wouldn't cost much to do it now. Just a little bit of that and you end up way over budget.
It also sounds to've been so neglected that you can be fairly sure that the current issues are not going to be the only one, and even the best home inspector and your best attempts at documenting the visual problems are...it's hard to explain but when people treat their houses like crap there is a lot of tidying up to do. Many systems will fail and many problems will become apparent only after you live there -- like, the skank I bought my house from did dumb stuff like putting sliding doors in front of the washer and dryer. Empty washer, hold wet laundry, move doors, put in dryer. There was so much stuff like that it was impossible to notice it all until I moved in.
I sunk tens of thousands into it when I bought it in 2007, and I am just about to go and get a loan and do that again, roughly, as things that seemed okay in 2007 have by now fallen apart. It will likely be an ongoing process for a while.
All that said I would probably do it again (albeit with a lawyer going after the lying seller and incompetent property inspector, which I dismissed as too much stress for me at the time), but that is because I really liked the house; I thought it had a lot of potential to look nice, and it is on a hill overlooking a lovely river, on a lovely street, in a lovely town. If it burnt to the ground I would re-build the same thing.
I'm not seeing that same sort of love for this house you're looking at, so while I'm not going to say "oh god no, don't buy a fixer-upper!" I would suggest only doing so if your visions of it fixed up fill you with joy. If you don't have that it will be stressful, at best.
The first thing I did was the electrical work -- urgent per the bank and the insurance company (it sounds like you will also have trouble getting insurance with this; some companies wouldn't work with me at all) -- and the electrician was wonderful, both personally and professionally; he came very well-recommended and I totally lucked out, and, unsurprisingly, every referral he made for every other tradesperson was golden. I quite wonderfully tapped into this little network of guys at the top of their game who I would not have found otherwise -- none of them bother to advertise, doing quite well by word of mouth alone -- I didn't use a general contractor; all did very good work at reasonable prices and were so very very nice to deal with. My current reno strategy is mostly "Invite same guys back, ask what they would do if this was their home, trust that." There are great tradespeople out there; well worth digging and digging to find them.
posted by kmennie at 6:13 AM on March 31, 2012 [1 favorite]
It also sounds to've been so neglected that you can be fairly sure that the current issues are not going to be the only one, and even the best home inspector and your best attempts at documenting the visual problems are...it's hard to explain but when people treat their houses like crap there is a lot of tidying up to do. Many systems will fail and many problems will become apparent only after you live there -- like, the skank I bought my house from did dumb stuff like putting sliding doors in front of the washer and dryer. Empty washer, hold wet laundry, move doors, put in dryer. There was so much stuff like that it was impossible to notice it all until I moved in.
I sunk tens of thousands into it when I bought it in 2007, and I am just about to go and get a loan and do that again, roughly, as things that seemed okay in 2007 have by now fallen apart. It will likely be an ongoing process for a while.
All that said I would probably do it again (albeit with a lawyer going after the lying seller and incompetent property inspector, which I dismissed as too much stress for me at the time), but that is because I really liked the house; I thought it had a lot of potential to look nice, and it is on a hill overlooking a lovely river, on a lovely street, in a lovely town. If it burnt to the ground I would re-build the same thing.
I'm not seeing that same sort of love for this house you're looking at, so while I'm not going to say "oh god no, don't buy a fixer-upper!" I would suggest only doing so if your visions of it fixed up fill you with joy. If you don't have that it will be stressful, at best.
The first thing I did was the electrical work -- urgent per the bank and the insurance company (it sounds like you will also have trouble getting insurance with this; some companies wouldn't work with me at all) -- and the electrician was wonderful, both personally and professionally; he came very well-recommended and I totally lucked out, and, unsurprisingly, every referral he made for every other tradesperson was golden. I quite wonderfully tapped into this little network of guys at the top of their game who I would not have found otherwise -- none of them bother to advertise, doing quite well by word of mouth alone -- I didn't use a general contractor; all did very good work at reasonable prices and were so very very nice to deal with. My current reno strategy is mostly "Invite same guys back, ask what they would do if this was their home, trust that." There are great tradespeople out there; well worth digging and digging to find them.
posted by kmennie at 6:13 AM on March 31, 2012 [1 favorite]
This is exactly how you build equity. If it was easy, everyone would do it. It's hard work, challenging, frustrating, time-consuming, expensive, etc. But you end up with a wealth of knowledge that will carry it's value throughout your life, along with the equity in your home that you can bank on later. I say find a GREAT inspector and go for it.
posted by raisingsand at 6:33 AM on March 31, 2012 [2 favorites]
posted by raisingsand at 6:33 AM on March 31, 2012 [2 favorites]
Plus, you have a wonderful resource to help you through it, right here on the green.
posted by raisingsand at 6:34 AM on March 31, 2012
posted by raisingsand at 6:34 AM on March 31, 2012
Raisingsand is right that it's rewarding, but you have to want to (and be able to afford to) do this to reap that reward. Please consider your own willingness to sink 50-100% more money than you ever think you'll spend on repairs and renovations into a suspect home, and balance that against the possibility -- because that's all it is, a chance -- of seeing a return on that investment.
Remember, as well: there are many, many homes out there, and it's a buyer's market. Don't get emotionally attached to a home you do not own.
posted by ellF at 7:03 AM on March 31, 2012
Remember, as well: there are many, many homes out there, and it's a buyer's market. Don't get emotionally attached to a home you do not own.
posted by ellF at 7:03 AM on March 31, 2012
We bought a fixer in 2006, which timing aside wasn't a bad idea as I am pretty handy and like projects, the problem was the length of projects - rewiring the house took 2-3x as long as we expected. A 6 week bathroom remodel took 6 months because we found structure was rotten and we ended up needing to replace the main vent stack and 50% of the waste lines in the house, along with 1/3rd of the plumbing. We were lucky, we had a raised foundation and a reasonable attic that made most of this doable without too much effort. Cost was huge though, even with my own labor for most everything costs ran crazy. Partly that was nicer materials, but usually it was uncovering something when you were just going to do one tiny thing - like replace the garbage disposal...that led to a new sink and faucet.
So here is what I would tell you, it's never just poor finish work, and a house needs something major generally every 5 years, sometimes more. If the major systems - electrical, waste, water, roof, and AC/heat are all perfectly fine, you can usually live with a failure elsewhere until it's repaired on your own timeline. If there is a failure in any one of those systems it's usually an immediate and expensive fix.
I told myself we'll never buy another fixer but realistically that's not true (all properties need fixing over time), unless you're lucky or good at spotting trends in real estate, you can control home ownership costs and value by fixing up yourself.
posted by iamabot at 9:32 AM on March 31, 2012
So here is what I would tell you, it's never just poor finish work, and a house needs something major generally every 5 years, sometimes more. If the major systems - electrical, waste, water, roof, and AC/heat are all perfectly fine, you can usually live with a failure elsewhere until it's repaired on your own timeline. If there is a failure in any one of those systems it's usually an immediate and expensive fix.
I told myself we'll never buy another fixer but realistically that's not true (all properties need fixing over time), unless you're lucky or good at spotting trends in real estate, you can control home ownership costs and value by fixing up yourself.
posted by iamabot at 9:32 AM on March 31, 2012
This is really a question for the heart rather than the head.
I'm with raisingsand: It's a great opportunity if you've got the guts and imagination, and the brains to teach yourself a bunch of new skills (which is fun and rewarding in itself). I've designed and built a couple of houses from the ground up and renovated a bunch more, having started with zippo knowledge. Sure it was hard. But it was tremendously satisfying and it paid off. If you can see this as a creative opportunity rather than a burden, I'd say go for it and enjoy yourself.
(There's a lot of great advice above too.)
posted by fivesavagepalms at 10:00 AM on March 31, 2012
I'm with raisingsand: It's a great opportunity if you've got the guts and imagination, and the brains to teach yourself a bunch of new skills (which is fun and rewarding in itself). I've designed and built a couple of houses from the ground up and renovated a bunch more, having started with zippo knowledge. Sure it was hard. But it was tremendously satisfying and it paid off. If you can see this as a creative opportunity rather than a burden, I'd say go for it and enjoy yourself.
(There's a lot of great advice above too.)
posted by fivesavagepalms at 10:00 AM on March 31, 2012
Maintenance and repairs to our 90 year old house used up a lot more time and money than I ever thought it would. I love the house and am really glad we purchased it when the market was low (mid 90s) but I sometimes regret that so much spare time was directed away from family, friends and holidays or career development.
posted by bonobothegreat at 12:04 PM on March 31, 2012 [2 favorites]
posted by bonobothegreat at 12:04 PM on March 31, 2012 [2 favorites]
To ad to what ellF said regarding your inspector not being affiliated with a contractor, make sure that you also do not use one recommended by any real estate agent involved in the transaction. There are some inspectors that strike fear into the hearts of agents, get one of those, they will give you the accurate scoop.
posted by lunaazul at 6:48 PM on March 31, 2012
posted by lunaazul at 6:48 PM on March 31, 2012
I would find an inspector by googling "expert witness construction dispute." Those people know the code backwards and forwards. I'd also get an inspection from a well-recommended structural engineer. Then I'd get three bids.
posted by slidell at 9:03 PM on March 31, 2012 [1 favorite]
posted by slidell at 9:03 PM on March 31, 2012 [1 favorite]
Six years ago, my ex and I bought a fixer-upper house. It was similar to yours in that it's structurally sound and most of what needed to be done was cosmetic.
Over these, we've/I've sunk close to $30,000 into renovations that kept expanding and expanding, and used up a tone of time. The largest portion (about a third) of that money was used up by new, triple-pane argon windows that, while wonderful for heat and for soundproofing, were pricey. The thing is, even if you think there's only "some" renovations to be made, you don't know what's behind the walls and an inspector won't know exactly what's behind the walls either. (Which is why a "simple" attic renovation slowly morphed into an entire re-model, re-insulation, re-flooring, etc. renovation.) Whatever your budget, make sure you can spend twice that much, just in case.
Also, most of the work I had to hire for (because it was outside of my time availability (extensive drywalling) or skill level (installation of new plumbing)) was incredibly stressful for me. Most contractors do not want to do smallish jobs like this, because they are difficult (old houses are finicky) and not nearly as profitable as working on new developments or commercial space. Finding someone honest was difficult and supervising them was stressful.
I am a floor refinish and some touch-up paint away from putting my house on the market at this point, so I guess I'll find out how worth it is was fairly soon, but even assuming I get my best-case scenario price for my house, I'm pretty sure I'd advise my 6 years ago self to move to a condo instead of a house. (And to break up with ex much sooner, but that's only tangentially related.) Unless you really love doing reno-work, what you essentially have is a second job, that won't pay you anything until long after you've put in the work. And I'm not even sure the wages for the reno-work I did myself, hour for hour, would be at all competitive with what I get for my real job. I think spending those hours with friends and family, on travel, fitness or the outdoors would have had me on balance a lot happier over the past few years.
posted by Kurichina at 12:48 PM on April 2, 2012 [2 favorites]
Over these, we've/I've sunk close to $30,000 into renovations that kept expanding and expanding, and used up a tone of time. The largest portion (about a third) of that money was used up by new, triple-pane argon windows that, while wonderful for heat and for soundproofing, were pricey. The thing is, even if you think there's only "some" renovations to be made, you don't know what's behind the walls and an inspector won't know exactly what's behind the walls either. (Which is why a "simple" attic renovation slowly morphed into an entire re-model, re-insulation, re-flooring, etc. renovation.) Whatever your budget, make sure you can spend twice that much, just in case.
Also, most of the work I had to hire for (because it was outside of my time availability (extensive drywalling) or skill level (installation of new plumbing)) was incredibly stressful for me. Most contractors do not want to do smallish jobs like this, because they are difficult (old houses are finicky) and not nearly as profitable as working on new developments or commercial space. Finding someone honest was difficult and supervising them was stressful.
I am a floor refinish and some touch-up paint away from putting my house on the market at this point, so I guess I'll find out how worth it is was fairly soon, but even assuming I get my best-case scenario price for my house, I'm pretty sure I'd advise my 6 years ago self to move to a condo instead of a house. (And to break up with ex much sooner, but that's only tangentially related.) Unless you really love doing reno-work, what you essentially have is a second job, that won't pay you anything until long after you've put in the work. And I'm not even sure the wages for the reno-work I did myself, hour for hour, would be at all competitive with what I get for my real job. I think spending those hours with friends and family, on travel, fitness or the outdoors would have had me on balance a lot happier over the past few years.
posted by Kurichina at 12:48 PM on April 2, 2012 [2 favorites]
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posted by sanka at 9:41 PM on March 30, 2012