Looking to buy a St. Paul House for 50k CASH - Frogtown Gentrification? (Dayton: sale, rental market)

[StPaulEastSider]

Originally Posted by 1stpontiac

I was going to point this out too. Especially critical in older, $50k houses, too, I would think. You don't want to spend all of your 50k on a house and then find yourself needing a $15k roof replacement or foundation repair. Also, beware of energy costs and make sure you are budgeting for a potentially massive increase in your energy bills as you move into a stand-alone house. That was shocking to me after I moved out of my first, suprisingly energy-efficient, appartment. You should be able to get past records for that, though, to avoid surprises.

I'm getting closer to 65k, the last portion won't roll in for another month or so... I'll spend the remainder, after my house purchase of nearly 50k, on improvements to the property, furniture (but I'll probably get enough from selling off the stuff I have now which won't fit into this house to cover the few items I want to get), window coverings, shower curtains & such things... hopefully, when the house is fully taken care of, a new shed for the backyard & repairing or replacing the fence, and maybe bikes for myself & my kids. I'll also pay ahead my tax, insurance & utilities. That last $ will go quick but hopefully to good purposes.

I'll have to see what the home inspector finds, but I set my budget so that I'd have some $ to work with to make the move (before I even get the balance of my inheritance) & get set up + (with the balance) any updates/repairs needed immediately. That shouldn't be the roof, the roof is less than 8yrs old, with no water stains on the ceilings, so I should be good there. There is just a shale/limestone 6th square cellar hole which may need point and tuck maintence, it housed the coal-burning furnance before the house was retrofitted with a gas furnance & ductwork. IDK about the foundation around the perimeter of the house. We'll see what the report says, if it's too much for my remaining budget my offer is contigent on the home inspection... so we'll see. But it already passed a strigent FHA inspection for a buyer whose financing fell through at the last minute, so we should be okay.

[golfgal]

Originally Posted by StPaulEastSider

I'm getting closer to 65k, the last portion won't roll in for another month or so... I'll spend the remainder, after my house purchase of nearly 50k, on improvements to the property, furniture (but I'll probably get enough from selling off the stuff I have now which won't fit into this house to cover the few items I want to get), window coverings, shower curtains & such things... hopefully, when the house is fully taken care of, a new shed for the backyard & repairing or replacing the fence, and maybe bikes for myself & my kids. I'll also pay ahead my tax, insurance & utilities. That last $ will go quick but hopefully to good purposes.

I'll have to see what the home inspector finds, but I set my budget so that I'd have some $ to work with to make the move (before I even get the balance of my inheritance) & get set up + (with the balance) any updates/repairs needed immediately. That shouldn't be the roof, the roof is less than 8yrs old, with no water stains on the ceilings, so I should be good there. There is just a shale/limestone 6th square cellar hole which may need point and tuck maintence, it housed the coal-burning furnance before the house was retrofitted with a gas furnance & ductwork. IDK about the foundation around the perimeter of the house. We'll see what the report says, if it's too much for my remaining budget my offer is contigent on the home inspection... so we'll see. But it already passed a strigent FHA inspection for a buyer whose financing fell through at the last minute, so we should be okay.

Don't pay ahead on taxes, put the money into some CD's that mature about a month before your taxes are due, you might as well collect the interest and not the government.

[homiej]

Originally Posted by golfgal

Don't pay ahead on taxes, put the money into some CD's that mature about a month before your taxes are due, you might as well collect the interest and not the government.

Yep!

On that note, I think you're making a smart investment.

[StPaulEastSider]

Originally Posted by golfgal

Don't pay ahead on taxes, put the money into some CD's that mature about a month before your taxes are due, you might as well collect the interest and not the government.

Makes sense under normal circumstances, but I'm not allowed to have assets other than one vehicle and a home & I'm only allowed to have 2k in savings. Per SSI, I'd spend way more in purchasing my own health insurance than I'd make on interest, so they only option is to spend down this inheritance money as wisely as possible.

[StPaulEastSider]

Originally Posted by homiej

Yep!

On that note, I think you're making a smart investment.

I hope sure hope so because I have a longterm vision for this house and the neighborhood & economy will both have to improve slightly to make that vision a reality.

The house is tiny, barely 1000sqft, w/virtually no storage space. No basement to speak of, just a approx 7ft x 5ft cellar where the coal burning furnace once was located. It has an updated fuse box down there, and the water meter, I'll get my smallish chest deep freezer down there & an IKEA wardrobe which I bought some time ago, and never assembled, will finally get assembled in that cellar... it appears to be quite dry, altho dirty because the shale walls are crumbling in places, it'll probably need a little point and tuck work on the foundation. I think I'll build a wood floor, like a huge pallet, before I move anything down there. I think the floor now maybe just dirt, it's hard to tell. I'll need a shop vac first & foremost!

It was retrofitted w/a furnace & ductwork at some point, the furnace is in the den room (4th bedroom) on the main floor, and the water heater is in a closet off the kitchen.

After my kids are grown and out on their own, and I no longer need the separate bedrooms, I'm thinking I'll gut the entire inside, install radiant floor heating, and totally open it up. Maybe I'll put a tiny bath on the main floor, leaving the second floor to be a master bedroom suite w/a renovated bath & builtins for the closets/storage/laundry. The laundry is currrently on the second floor in the bathroom, w/a large bear claw tub w/a shower conversion. :-) The wood trim around the windows is heavily painted, and damaged in places, so I don't know how much of that can be salvaged. It may end up looking totally new on the inside, w/the historical character left to the "curb appeal" of the exterior. I may even put in a spiral staircase to the second floor to save floor space. The kitchen on the main floor, in my mind, would be remodeled and opened up to the entire main floor. With the walls removed I should gain a few feet so maybe 550-600sq feet down and 500 or so up... but the space will be used much better than now. Fewer bedrooms, so that's a consideration for resale eventually, but this "remodel" I have in mind would appeal to an entirely different clientel in the real estate market than the house currently appeals to. With such a small space to renovate I'll have the ability to choose highend finishes.

The exterior has to conform to the Historical District so I cannot do an addition. But that's okay, there is a trend towards living in small, but green, and well-organized, living spaces & I plan to really play that up once I'm an empty nester & I living solo... at that point 1000sqft will be plenty. I'll fix up the yard with Victorian-inspired gardens & really enjoy having my own LITTLE house in the Historic District, near the farmer's market and all of that. I'll enjoy the low taxes (unless the area really gentrifies) and utilities.

It should be resellable @some point, perhaps w/a profit depending on how much I put into it and how much the market & neighborhood have improved 20-30years from now. For the price I paid 3 others were willing to pay the same, so I should be good for getting out of this what I paid for it without any major changes.

Anyways, those are my thoughts, who knows what the future will bring... for now, it's what I can afford and it will serve my family's needs, and the immediate tax/insurance rates are low, and it doesn't need any immediate major work... and bottomline, that's all that is really important right now.

But I do have thoughts about totally gutting & renovating this place! :-)

For now I'm contemplating what I'll keep & what I'll get rid of to fit my family in this space. Fortunately I have no worries about the kitchen, it has plenty of cupboard/counter space. It's just the remainder of the house... we will be heavily decluttering in the weeks ahead. Which is NOT a bad thing. It'll just take a lot of careful consideration.

[Cruz Azul Guy]

Originally Posted by golfgal

Don't pay ahead on taxes, put the money into some CD's that mature about a month before your taxes are due, you might as well collect the interest and not the government.

So that would be what, like a 12 month CD? The current interest rate on that is under 1%, you're hardly better off doing that than stuffing your money under a pillow until payment is due. If you're talking property taxes on a home in Frogtown it could be around $1200/year. That would earn you what, $12 if you invest in a CD that matures just before taxes are due? Ooooh, take that government!

[StPaulEastSider]

Originally Posted by Slig

So that would be what, like a 12 month CD? The current interest rate on that is under 1%, you're hardly better off doing that than stuffing your money under a pillow until payment is due. If you're talking property taxes on a home in Frogtown it could be around $1200/year. That would earn you what, $12 if you invest in a CD that matures just before taxes are due? Ooooh, take that government!

LOL. As it turns out the house I'm buying is in Dayton's Bluff and the taxes are currently $840, I think, maybe $860, but under $900 either way. The house is valued by the city @80k and I'm paying under 50k for it, so my agent thinks I should take my bill of sale, once we do the close in a few weeks, to the city and ask to get my property taxes lowered even further. IDK if that will work, but it maybe worth it to try.

So a CD will pay me less than $10 for that, right? LOL.

[StPaulEastSider]

The inspection on the home I made an offer on is today @noon... hoping all goes well.

[Aaod]

Good luck hope it goes well.

[StPaulEastSider]

Originally Posted by Aaod

Good luck hope it goes well.

Thank you! My inspection went VERY well. My inspector spent 2.5hrs going over a barely 1000sqft house and left saying I couldn't go wrong with this purchase.

He couldn't find any old wiring or plumbing, it was all updated in the late 80s or early 90s. Insulation has been blown into the walls, probably putting it up to 90s standards.

The roof is at most 5-6 years old and in good condition, he actually went up there to inspect it. The cedar siding is in amazing condition, there was some evidence it was covered by asphalt shingles at some point, preserving it. All of the windows, except for one basement window, have been replaced with thermopane windows, some Anderson, some were replaced very recently. All the appliances are included & work.

If there was any "gotcha" it's that the furnace & water heater, both of which work, are near the end of their life expectancies, so for the sake of energy efficiency and preventive maintenance, I'll be replacing both the furnace & water heater off the bat.

The building structure is sound & solid, no discernible structural leanings or floor settling/slant. The plaster walls are in very good condition. All in all, my inspector was VERY impressed considering the house was built in 1884 & what I'm paying for it.

It seems it is possible to buy a house in move-in condition for under 50k! (Once I put in the furnace & water heater it'll be closer to 55k.) I really wasn't expecting to find a house in this good of condition, I'm VERY happy!!!