Is it practical to buy a "AS IS" house (Livingston: bank owned, short sale)

[jaypp]

I found a "AS IS" house in Livingston is price at 280,000, does anyone know what I should look for that would be hidden cost.

I have a budget around 50 thousand to fix.

thanks any advice would be greatly appreciated.

[manderly6]

Get an inspection just like you would with any other house to figure out what repairs would be necessary. If it is priced massively below similar types of houses that is a pretty good sign it will need massive amounts of repairs.

[Marc Paolella]

Originally Posted by jaypp

I found a "AS IS" house in Livingston is price at 280,000, does anyone know what I should look for that would be hidden cost.

I have a budget around 50 thousand to fix.

thanks any advice would be greatly appreciated.

Your agent should be able to advise you of defects in the home following a thorough inspection.

Here's a few quickies:

1) Buried oil tank (a biggie)
2) Bad or old septic system (not all that common in Livingston, but they do exist)
3) Aluminum wiring (this can be a huge expense)
4) Malfunctioning well (again, not common, but they are out there)
5) Mold in remote spaces such as attics and crawls.
6) Water penetration from bad roof into walls and ceilings
7) Externals (zoning changes in the area, plans for any form of non-residential development nearby, etc.)
8) Undesirable neighbors (I'll leave what this can mean to your imagination)
9) Bad masonry such as patios, retaining walls, walkways, etc. Cracked or settled foundations, or settlement in general. The floors should all be level.
10) Wet basement (obviously getting a lot of attention from buyers right now. Waterproofing a problem basement can run into the tens of thousands of dollars)

Example: The house on Carlisle in Livingston is priced at $279,000 and is being sold as-is. It has an underground oil tank. And obviously other problems. So it probably cannot be financed until the oil tank is out. Who is going to pay for it? And when? This is where it pays to have a strong buyer's agent. First, to help find the problems. And then, to solve them.

[Docendo discimus]

That Livingston house on Carlisle is 2 stories, 4 bedrooms, 2 baths. It's on a quiet street. It's within walking distance of the elementary school and the high school (and the municipal pool, playground, basketball courts, pond, library). It's less than 3/4 of a mile walk from the NYC/NJ Transit bus stop. $279,900 for that, in Livingston, is quite a bargain...even if it is an "As Is", handyman special.

The LAND ALONE is assessed at $258,800*. All the lots (again, the land alone) on that street are assessed between $250,000 and $280,000.

The sale history on this house is:

1996: sold for $211,250
1999: sold for $240,000
2011: on sale for $279,900

The current assessment on this property is $439,300 ($258,800 for the land and $180,500 for the house itself. Even as a complete knock down/rebuild from scratch, an asking price of $279,900 is not bad at all.

I know people who paid $500,000+ in Livingston for a 3 bedroom ranch knockdown in 2006, and another person who paid $400,000+ in 2010 for a 3-bedroom knockdown. Granted, the lots were a little bigger, I think, than on Carlisle. And, 2006 was at the height of the bubble. However, 2010 most definitely was NOT...and a knock down still fetched $400,000+. Just to give you an idea.

HAVING SAID THAT, just because it's a bargain, doesn't necessarily make it PRACTICAL for every buyer. Not everyone has the means, or the desire/willingness, or the time, to go through the process of flipping a house.

If you can increase your $50,000 "fix it" budget (I'm thinking you'll have to double it...at least), if you are looking at this house as a long term investment (you want to raise your young kids there and grow old there), and the prospect of flipping the house excites you (it's an opportunity to design your customized dream home)...then go for it. The property is a bargain and it's a golden opportunity.

If you are looking for a house that's move-in ready, and/or, you envision moving again in 10 years...then NO, this is NOT a practical prospect for you.



*You are probably wondering from where I am pulling all these numbers. It's all public record here:

NJ Assessment Records Search

In the drop-down menu for "Step 2 Select County", select ESSEX.
In the drop-down menu for "Step 3 Select District", select LIVINGSTON.
Under "Search Criteria", next to "Location", enter the street name "Carlisle" (don't include "Drive" or "Dr").

It will spit out a list of all the properties on that street, with sales histories, property tax info, assessment info, owner's names, etc. etc. This is a good way to gauge comparables. And, obviously, you can enter any street name under the search criteria, to compare other properties in that area.

[jaypp]

thanks for the informative post....that is the exact house I am looking for. I greatly appreciated it.

I definely donot plan to flip it, but for 100,000 I think is way over my budget to fix.

thanks again

[mmzymxf]

It's a short sale, better to find a good agent that knows how to work with the bank. The price is not yet approved and significantly lower than the market value, so there would be some wait.

Originally Posted by jaypp

thanks for the informative post....that is the exact house I am looking for. I greatly appreciated it.

I definely donot plan to flip it, but for 100,000 I think is way over my budget to fix.

thanks again

[bay]

sounds like a good deal. If I were you, probably knock down the whole thing and rebuild will save more. We bought a bank owned house and dump almost 120k to completely renovated through last year. We did all planning and material shopping by ourselves. Otherwise, it probably will cost more. I think 50K will not get you too much remodeling unless you are going to do jobs by yourself. With this kind of price in Livingston, I will guess that the house must have some major issue. Plus, the neighborhood does not look too appealing to me. What's average house pricing on that particular street?