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Old 06-12-2008, 06:41 AM
 
11 posts, read 126,148 times
Reputation: 21

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I signed a contract two weeks ago on a house and the closing is in a week. I gotta decide by then if I will get the house or not. I'll give you the pro/con of the purchase.

Pros:
It's a foreclosure and the bank's doing a short sell at 46k. Now the house was sold for 96k two years ago with the existing problems. The house have a huge yard, and a HUGE detached garage. So... the house's worth 80-100k with the problems.

Cons:
- Foundation settling issue: will require jacks to fix it (6k).
- Previous termite infestation: will need to replace some floor joints (6k).
- Replace the carpets with hardwood floors (3.5k).
- Install a new full bathroom (4k).
- Replace windows (2k)
- Landscaping (2k)
- Plumbing (3k)
- HVAC 98k)
- General stuff (painting, etc) (3k)

Total repair cost: approx. 37.5k

Now, the cool thing is that all other houses in the neighborhood are selling for 130 to 150k all fixed up which mean, if I fix everything up, the house will sell for no less than 120 give or take. 46k cash for the house plus 37.5K expenses equals 83.5 which mean if the house sells for 120k then I will get 36.5 profit minus closing expenses.

Now my question is: will anyone want to buy a house with a fixed foundation with jacks installed?

I'm scared as hell and am not sure if I should sign the paperwork and dish out 46k cash.
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Old 06-12-2008, 09:32 AM
 
203 posts, read 814,173 times
Reputation: 138
Quote:
Originally Posted by Whitstar View Post
I signed a contract two weeks ago on a house and the closing is in a week. I gotta decide by then if I will get the house or not. I'll give you the pro/con of the purchase.

Pros:
It's a foreclosure and the bank's doing a short sell at 46k. Now the house was sold for 96k two years ago with the existing problems. The house have a huge yard, and a HUGE detached garage. So... the house's worth 80-100k with the problems.

Cons:
- Foundation settling issue: will require jacks to fix it (6k).
- Previous termite infestation: will need to replace some floor joints (6k).
- Replace the carpets with hardwood floors (3.5k).
- Install a new full bathroom (4k).
- Replace windows (2k)
- Landscaping (2k)
- Plumbing (3k)
- HVAC 98k)
- General stuff (painting, etc) (3k)

Total repair cost: approx. 37.5k

Now, the cool thing is that all other houses in the neighborhood are selling for 130 to 150k all fixed up which mean, if I fix everything up, the house will sell for no less than 120 give or take. 46k cash for the house plus 37.5K expenses equals 83.5 which mean if the house sells for 120k then I will get 36.5 profit minus closing expenses.

Now my question is: will anyone want to buy a house with a fixed foundation with jacks installed?

I'm scared as hell and am not sure if I should sign the paperwork and dish out 46k cash.
Obviously a man with No problems who's in search of some?!.........Just kidding......sortof?!............No, i would not buy a property with fixed foundation problems. Everything looks good on paper but unless you have multiple backup plans i would pass. Do you have many skills to cut the costs? do you have cheap/free reliable help? ...........again to cut costs.....

.....and a parting thought.............these are the problems you Know about...........what about the lovely surprises you'll find once everything gets started? Personally i love peoples entrepreneurial spirit...........but really isn't there an easier way to make a buck?
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Old 06-12-2008, 10:47 AM
 
Location: Apple Valley Calif
7,475 posts, read 19,565,214 times
Reputation: 5575
I have a home that was sinking due to being built on unstable soil. I found a company that came in, cut 3'X3' holes in the foundation and drilled down to the hard pan far below, then jacked the house up level. it wasn't that expensive, but walking into your house at night, and seeing huge piles of dirt in the living room and dining room was a trip..!
If you need the name of a good company specializing in that work, let me know.
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Old 06-12-2008, 11:13 AM
 
11 posts, read 126,148 times
Reputation: 21
The problem is... I only have 56k in cash and I don't want to get any loans to avoid debts. So, I have to get a house within my budget and all houses in the 50k range are either in good shape but in very bad neighborhoods or in really bad shape but in good neighborhoods.

Now, almost all houses at 50k or less have various problems including foundation issues which are why it's so cheap in the first place.

This one is in a pretty decent neighborhood and even if I dish out 30k to repair it all, I'll be able to make some profit even if it only sells for 100k. Now the foundation is not crumbing or bowing in the corners, it is just not level which is why we need jacks.

Now, I have several blue collar relatives that does construction so they can do a lot for discount plus I plan to do a lot of the work myself such as tiling, hardwood floors, drywalls, painting, etc.

What I hope is that once I replace the necessary floor joists and re-level the house, do the necessary work, then it'll make me some decent profit?

Am I overlooking anything? anyone have any doubt? suggestions?

Matt
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Old 06-12-2008, 11:21 AM
 
Location: Hampton Roads, Virginia
1,123 posts, read 4,702,916 times
Reputation: 667
My first thought would be.... is this something you want to buy, fix up and resell? Or live in for a while - at least 5 years?

That would make a difference to me. Sounds way too risky as a flip. If you could live in it and make some of those upgrades slowly might be a good longer term investment. Just remember that you usually spend more than you anticipate.
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Old 06-12-2008, 11:30 AM
 
Location: Apple Valley Calif
7,475 posts, read 19,565,214 times
Reputation: 5575
My repair didn't require any flooring. the main suppoert wall was the base of the problem.
They dug one hole outside the house, at the end of the wall. three in the living room along the wall, and the last one in the hall closet, so we just took all the furniture out, removed the carpet and went to work. When finished, just had to reinstall the carpet. We searched long and hard to find the perfect location so as not to have to remove cabinets or flooring.
It was a major job, and wasn't anything close to the price you're talking. I think I spent about $10K. Check with specialist that do this for a living, they may be cheaper than DIY. These guys have raised schools and multiple story hotels, so they know theri stuff
I don't know where you live, but the company I used is headquartered in Texas, but have franchises all around the country. Doesn't cost anything for an estimate..
Take a peek....
SABER - Concrete & Foundation Leveling
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Old 06-12-2008, 11:33 AM
 
Location: Apple Valley Calif
7,475 posts, read 19,565,214 times
Reputation: 5575
This is what they did to my house...
Foundation Repair Underpinning Piering for Settling Sinking Cracked (http://www.saberleveling.com/piering_index.ws - broken link)
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Old 06-12-2008, 03:16 PM
 
11 posts, read 126,148 times
Reputation: 21
Quote:
Originally Posted by stacylee926 View Post
My first thought would be.... is this something you want to buy, fix up and resell? Or live in for a while - at least 5 years?

That would make a difference to me. Sounds way too risky as a flip. If you could live in it and make some of those upgrades slowly might be a good longer term investment. Just remember that you usually spend more than you anticipate.
I agree... but what choice do I have? the house is in Nashville, TN while I work in Washington, DC. I cant afford any houses in DC metropolitian area at all!

My strategy:

1. Buy the hose and use the rest of my money (~7k) to fix the foundation and at the same time, get a second job and invest 1k monthly into fixing the house.

2. Then, I'll get a loan (10-20k) to complete majority of the repairs then the rest of the repair will be done with the money I got from my second job.

3. Rent it out and use the rent money to pay for property tax and the loan.

4. Relax and wait two years then sell it.

Based on this, I should get no less than 100k.

Matt
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Old 06-12-2008, 04:45 PM
 
1,830 posts, read 4,648,993 times
Reputation: 1938
Your other thread said you could fix it up for about 15K. Now you're up to 39K, and you'll be living in DC so you aren't there to do the work or oversee the workers. Plus you'll be working 2 jobs, and the house will be sitting vacant.. where it could be vandalized or stripped of new materials after they go in. It sounds like you're taking on an awful lot. Unless you have parents/trusted friends in Nashville that will be able to keep an eye on things.

Let me ask you this... is the house rentable the way it is? ie: did the previous owner live in it or has it been vacant for years and in horrible shape? If it's liveable as is, I'd consider getting it rented out asap. Clean it, slap on some paint and cheap carpet and let it start earning money for you. Are new windows and bathroom necessary or can that wait or be crossed off the list? Is the hvac working? If so, let it be. What is the 3k plumbing expense for? Landscape can wait until you're closer to selling it.... renters won't take care of it anyway. 6k for a few floor joists? That seems high, considering jacking up the house on pillars is also 6k. Be careful people aren't taking advantage of you because this is your first project.

Your "to do" list for a flipper shouldn't be as intensive as it would be if you were going to live there yourself and turn it into a 1930's vintage showpiece. The idea is to make the minumum investment necessary to turn a profit in the shortest amount of time. Have you considered putting it right back on the market, as is, for 100k?

Have you gone to the real estate board and picked the brains of the professionals there? They can be a great help as to where you'll recoup your money and where you're wasting it.

Also, rent "The Money Pit" and "Pacific Heights."
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Old 06-12-2008, 05:08 PM
 
Location: Maine
502 posts, read 1,532,819 times
Reputation: 499
PErsonally - i would be very cautious about buying a house that has a settling foundation.
Questions I would ask and demand answers in writing.
WHy is the foundation settling? How long did it take to start settling? Are houses nearby settling? What damage has this caused to the rest of the house? Do doors/windows open correctly due to the settling?

I would get estimates in writing before buying on actual cost of repair - not just ballpark guesses.
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