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Rotted Exterior Wall: Rehab Property

 
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Old 09-26-2011, 09:08 PM   #1
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Rotted Exterior Wall: Rehab Property


Hey Guys,

I have been keeping my eyes open for a good property to buy low with cash, fix with cash, and hold it to rent. Finally after over a year of searching I found it! 2 Bed, 1 Bath -1.5 story home built in the early 1900's. It was came on into the market three months ago and was listed for $23,000. It is an estate sale and the heirs are itching to get some money so they dropped it to $9k. This is basically the value of the land keep in mind.

I put an offer in to beat the highest bidder by 1k at a cap of $10,000 and they are awaiting the receiving of two more offers and then they will make the decision.

Here is the issue:
No one has lived in the home for years. It is knob and tube, no HVAC besides the oil burner, the bath has no tub or shower. Floors are unlevel because of settling where there was not a footing under the additions. It has a 12 x 12 basement for mechanicals and the such.
My hopes are to gut the home completely and use the existing bones to build a new, updated home. The floor plan will be changed and it will become a 1.5 bath, 2 bed with open floorplan yet it will keep the historical craftsmanship details found in the homes of this era.

There was a major leak in the roof for some time however. It is in the center of on of the side exterior walls. While the roof had been replaced on that side of the home the damage is still very, very present. STarting from upstairs and going down, the floor in the bedroom just below the leak has rotted and now has a 8 foot section that is basically a springboard (assuming the joists are rotted out.) Going downstairs you can tell that the plaster has bowed and crumbled in that area due to the floor above breaking free. Going outside and examining the exterior wall just below this area you will find that giving the wall a nudge it moved considerably allot. Bottom line I dont know what I am looking at behind the plaster as far as structurally.

If I do go ahead and sign the final papers the first thing I will do is build some temporary support walls both upstairs and downstairs and try to distribute the weight away from the subject area.

Everything else I am confident in with this property. My only main worry is if I start ripping that wall open am I gonna end up compromising the home even more? The roof in that area is not sagging or bowing so as of now I dont thing it is collapsing in that area.

I know it is very hard to picture the issue without any photos but what do you guys think? Have you ever replaced just a section of an exterior wall? What about those joists? Will I have to rip them all out or can I scab into the non effected wood? Estimation of material costs?

Obviosly there are way to many factors to look at but I need to get an understanding of this problem before anything. And just an FYI I can not demolish the property... it is grandfathered in and if we were to rebuild we would not be able to put even 3/4 of the home on that lot.

Thanks for taking the time to read through this and take into thought any ideas you may have.
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Old 09-26-2011, 09:27 PM   #2
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Re: Rotted Exterior Wall: Rehab Property


if you can't knock it down (the best thing to do), save the minimum that is required to keep it's grandfathered status. BTW, what is the sq/ft of this house that you can only build 3/4 of the existing home? It's now a 1.5 story so turn it into an actual 2 story with converted attic or partial finished basement for extra space

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Old 09-26-2011, 11:55 PM   #3
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Re: Rotted Exterior Wall: Rehab Property


well for that price here, you couldn't buy a outhouse in the middle of the desert.

You don't mention what the exterior cladding is. If it is a siding pattern that is out of date, that might be costly. But generally repairing exterior walls is not that big of deal. It does get bigger if floor joists are involved.

If you remodel/rebuild, you will need to bring everything up to the existing code, I imagine. That can be quite a chunk of change for a house of that age and disrepair.

Are you looking at a all new foundation?
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Old 09-27-2011, 12:04 AM   #4
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Re: Rotted Exterior Wall: Rehab Property


Demo costs otta be close to your bid...

Be careful, this remodel stuff that old is like building a project car...

Better have lots of money & time.

If you don't have the time refer to #1...
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Old 09-27-2011, 01:32 AM   #5
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Re: Rotted Exterior Wall: Rehab Property


Quote:
Originally Posted by mc handyman View Post
Hey Guys,

I have been keeping my eyes open for a good property to buy low with cash, fix with cash, and hold it to rent. Finally after over a year of searching I found it! 2 Bed, 1 Bath -1.5 story home built in the early 1900's. It was came on into the market three months ago and was listed for $23,000. It is an estate sale and the heirs are itching to get some money so they dropped it to $9k. This is basically the value of the land keep in mind.

I put an offer in to beat the highest bidder by 1k at a cap of $10,000 and they are awaiting the receiving of two more offers and then they will make the decision.

Here is the issue:
No one has lived in the home for years. It is knob and tube, no HVAC besides the oil burner, the bath has no tub or shower. Floors are unlevel because of settling where there was not a footing under the additions. It has a 12 x 12 basement for mechanicals and the such.
My hopes are to gut the home completely and use the existing bones to build a new, updated home. The floor plan will be changed and it will become a 1.5 bath, 2 bed with open floorplan yet it will keep the historical craftsmanship details found in the homes of this era.

There was a major leak in the roof for some time however. It is in the center of on of the side exterior walls. While the roof had been replaced on that side of the home the damage is still very, very present. STarting from upstairs and going down, the floor in the bedroom just below the leak has rotted and now has a 8 foot section that is basically a springboard (assuming the joists are rotted out.) Going downstairs you can tell that the plaster has bowed and crumbled in that area due to the floor above breaking free. Going outside and examining the exterior wall just below this area you will find that giving the wall a nudge it moved considerably allot. Bottom line I dont know what I am looking at behind the plaster as far as structurally.

If I do go ahead and sign the final papers the first thing I will do is build some temporary support walls both upstairs and downstairs and try to distribute the weight away from the subject area.

Everything else I am confident in with this property. My only main worry is if I start ripping that wall open am I gonna end up compromising the home even more? The roof in that area is not sagging or bowing so as of now I dont thing it is collapsing in that area.

I know it is very hard to picture the issue without any photos but what do you guys think? Have you ever replaced just a section of an exterior wall? What about those joists? Will I have to rip them all out or can I scab into the non effected wood? Estimation of material costs?

Obviosly there are way to many factors to look at but I need to get an understanding of this problem before anything. And just an FYI I can not demolish the property... it is grandfathered in and if we were to rebuild we would not be able to put even 3/4 of the home on that lot.

Thanks for taking the time to read through this and take into thought any ideas you may have.

Gosh, if the lot is that small, I would think a neighbor would want it to tear down and have a bigger yard.
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Old 09-28-2011, 01:33 AM   #6
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Re: Rotted Exterior Wall: Rehab Property


The house is just under 1,000 SQFT. It has a 12' x 12' stone foundation beneath it and it is surprisingly the cleanest basement I have seen in this area constructed of stone.

In regards to a new foundation: No I have not really considered a whole new foundation. I worry that 1) that will be an arm and a leg and I might as well crawl into the excavated hole and 2) I worry that will in result red flag the property as be non conforming- losing the grand daddy status.

The thoughts of adding an additional floor on is a great idea. That is something though that I would just as well look at a more updated and ideal property for the money we would end up wrapping up in it.

The neighbors are actually who we are bidding against. They actually have a tri-plex thrown up next door and I assume they want to join the plots and construct another- checked zoning though... they cant do it!

The lot itself is not that small for the area but it is so irragularly shaped that at its widest point it is 36 feet and the smallest at 17 feet... and it is only 90 some feet deep.

Overall I guess I just dont have that much experiance personally in dealing with floor joist and exterior wall failures. Then to try and determine where the load is being placed and hoe I can stabalize it during the repair of it is just mind blowing. Also... I believe the exterior is constructed of, being just off the Mississippi, "barge" board.
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Old 09-28-2011, 04:49 PM   #7
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Re: Rotted Exterior Wall: Rehab Property


Repair it the the basics or tear it down
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Old 10-07-2011, 08:56 AM   #8
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Re: Rotted Exterior Wall: Rehab Property


How is the rental market there? I have a similar property in a depressed area of greenville, tn that we don't think is good for rental.
You are buying a lot with a worthless structure on it at that price. How much money can you earn with your time, is it better invested by working rather than sweat equity? Where do you see your break even point is investment wise?
Good luck and enjoy the journey to landlord
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Old 10-08-2011, 09:32 AM   #9
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Re: Rotted Exterior Wall: Rehab Property


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How is the rental market there? I have a similar property in a depressed area of greenville, tn that we don't think is good for rental.
You are buying a lot with a worthless structure on it at that price. How much money can you earn with your time, is it better invested by working rather than sweat equity? Where do you see your break even point is investment wise?
Good luck and enjoy the journey to landlord
The rental market in my area is very strong. For a home this size here in this market tenants are paying upwards to $8-900 per month. I went and looked at some of the comps in the area that were both for sale and for lease/rent. Most of them were listed at or around $95,000 with the majority that were being sold closer to $90,000. I was surprised to see that there was nothing special about the homes. Most had just one bath, tuna can small bedrooms, and highly outdated kitchens and baths.
Not to mention that over half of the comps I visited were heated with oil still and several still have yet to get updated electrical systems.

Considering I will be doing the majority of the work myself I am looking at gaining a large amount of sweat equity. The structure is not in the best shape. It is going t be gutted to the bones and refinished using modern materials including spray foam insulation to seal the old structure up tight. I will be milling out some old oak hardwood pulled from a barn that was constructed from the middle of the 1800's. It has a great deal of distressed patterns, worm holes, and the grain pattern is really tight hand hewn and even some quarter sawn.

As far as the numbers:
Purchase price of $9,000
Material Costs of $20,000 (large amount of materials already on hand... sunk cost from other work)

I intend on renting it at or around $895. Assuming that we will be able to rent it out with minimal vacancy rates and factoring in taxes, insurance and upkeep we will have a break even point within the first 3-4 years. That isnt even considering the instant valuation of the property after we add value through the renovations.

Depending on the market we may hold it and rent it over the next several years. I will be holding it and look at selling it at market value if another opprortunity arises that we can double our portfolio/income.

If you are wondering what kind of rent you can pull out of that property in G'ville try visiting www. Zillow dot com

Their numbers are usually pretty close to what you can expect in the market.

Go for it! Now is great time if you have some cash laying around. Se if the sellers would be willing to carry a not on the property for a few months until you get income producing from it.
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Old 11-01-2011, 12:12 AM   #10
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Re: Rotted Exterior Wall: Rehab Property


i have some experiance with this issue and let me just say what ever you think may be wrong there are most definetly other problems that will come up. i have a 3 story 3000 sqft townhouse the roof had major water damage that was not looked at for over a year and the end result was horibble. we had to rebuild 30 rows of bricks the whole length of the house. new floor joists throughout most of the 3rd floor. it really had a huge impact on the entire project and in my opinion is not worth the huge hassle and expense unless you are really getting a steal for the property wich it sounds like you are but even still if your house is as bad as it sounds it doesnt sound like it will be worth it.i agree with the previous post convert it to a 2 story home. and just my opinion dont trust zillow they are not up to date.

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