Inside the $56,900 Investment Property

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The paper work has finalized, because my home State has the delayed tax system, with the tax discount, I ended up paying $56,900 for my property.

Now comes the fixing. It’s never good buying a property out of town, as I have very little control on the expense, and I can’t put in any sweat equities.

I receive a lot of scolding from my family especially my brother before getting his blessing. LOL 🙂 In my family, it’s standard to receive scolding for some “under-perform” job or school work. Haha. I take that as they love me and care for me.

I take it pretty well, trying to divert the problem into all the positive things about it. Not to mention it’s THE house I’d move into when I move BACK home. That stops all the scolding. They all know I’m pretty active, so being around the park, tennis court, swimming pool, riverside walk, bike to down town, bike to shops. We all have to look pass the negative and look forward to the finished house. These house are going for $150K right now on  MLS. So, I’d still making equity right off the bat. One big house in the neighborhood is going for $400K. So, the potential is there.

Here comes the hard part, renovation and cost!

Grading around the foundation: $200

The ex-owner fix the foundation, but they never put the soil back, or planted the grass, so the water ended up backing into the foundation again. I had to pay somebody to move the dirt out of the basement and grade the surface at the same time. Foundation is always top priority.

Basement Clean-up: $500

There were about 2 feet of dirt in the basement as the result of the foundation fix. We used the dirt to grade the soil outside to prevent water from backing into the house again. 

Lock change: Total $112

  • Locksmith: $80
  • New Lock: $32

Plumbing: $2000

Draining pipe replacement: The closing company or the thief have stolen the copper water pipes, so we’ll be changing to PVC. Since the dirt draining down the open drain in the basement, we’ll have to use the pressure water to blast it out of the drain. 

  • Part: $400
  • Labor: $1600

Bathrooms: $1000

There are two (2) full baths. Everything appears to look good. Just redo some tiles. Putting new vinyl floor.

  • Parts: $400
  • Labor: $600

Kitchen: $1100

The cabinets looks okay, just need some new baseboard from some water damage. Also maybe a new coat of paint or retain. I have the option to replace the floor or keep the tiles. I’ll put an new vinyl floor in.

  • Cabinet: $700
  • Floor: $400

Remud and replace some of the broken wall or ceiling: $1000

  • Part: $150
  • Labor: $850

Painting the whole house: $1600

  • Parts: $800
  • Labor: $800

Fixing vinyl siding: $100

  • There were some pieces that were broken off. 

Floor for the rest of the house: $1600

Refinishing the hardwood floor, replace carpet/vinyl flooring in living room, dinning room, four (4) bedrooms,

  • Part and Labor: $1600

Demolish: $200

  • Demolish the cabinet in the basement and hall away: $200

Basement floor and paint: $1500

New coat of cement, maybe some vinyl floor to bright the space up and new paint:

  • Parts and labor: $1500

New Heating and cooling system: $4000

So this is to depend whether only need to replace the condensing unit and new coil or I have to replace the indoor also. 

  • Parts: $1850 for 2.5 tons system plus line-set and miscellaneous parts
  • and Labor: $2150

Appliances: $1250

  • Stove (used): $150
  • Dishwasher: $350
  • Fridge (used): $300
  • Washer and dryer (used): $300
  • Trash compressor: $150

Miscellaneous budget: $2000 

Got to account for something unknown coming up. 

Total Budget: $16,562

That’s not totally complete, but it should be enough for now. Down the road, I’d like to have a few more project when I actually move in:

  • New 2-3 car garage: It’s good for storage of garden equipment and our bikes also, with an extra door $15-$25K
  • Refinish driveway
  • Crown molding
  • Drive way
  • Make the entrance look more grand with posts

The basement is 1000 sqft, and I am itching to turn it into a rental. However, Mr. W, my brother and the rest of my family are against it. Us Americans like privacy!! (Mr.W is happy that my family is siding with him on this). So with the whole thing done, I’d have a total of 2600 sqft house just for Mr.W and I. What a waste of space, but it is what it is. We won’t live in this until we actually making the move. My plan is it won’t be for at least another 7 years. We would like to stay put to take care of Mr.W’s Mom.

I’m going to up date some BEFORE pictures, just so anyone wants to buy a house UNSEEN, out of state, online auction, upper fixer is really like. 😛

 

Noted how much I spent on labor itself, you can see why my brother and sister can make a lot of money buying these beaten up auction house. They put in a lot of work, a lot of sweat equity. Wealth comes with a price!! I would never doubt their handwork!

Some of the labor cost were a little low, but it’s the Midwest, we can get cheap labor. We also can buy some part/materials used at Habitat of humanity. Some of the rooms are small, and materials are just vinyl, looking like hardwood so the floor would still look great. What do you think about the budget and the number? Have  you done any of the project before? What are you numbers for hiring people or DYI? Any suggestions and ideas are welcome.

Update #1 on clean up job: 5/10/16

Two of these loads later, the house is pretty much empty and ready for remodeling. 

FUrV12

Update #2 5/11/16

This is definitely great progress. The dirt was removed as soon as possible, the landscape was graded immediately to prevent any future water damage, and mold as the raining season has begun.

*The back door was removed so we can move stuff out easier. LOL 🙂 

 

GA

9 Comments

  1. The place is a dump! Just the kind of place I like too!

    There’s tons of money to be made with places like this. Just have to put in the hard work and some cash, but it should pay off nicely if done right.

    Congratulations!

    • Great minds think alike. That’s my point

      Most of the white collar/office people would totally get turn off by this easily (including Mr.W, although, he’s come around some). They also think early retirement means I have to live in poverty.

      There is a lot of misperceptions. all of this work, I’d contract out, so I really don’t have to do it, it’s still time consuming, it takes a lot of patience, but the reward is excellent.

  2. I would consider doing this in the future. Glad you bought the cheapest house on the block! I have been putting in a lot of sweat equity as well! New porch, new landscaping, new wiring, new paint. Worth it! I’ve spent a fair bit – maybe $7000 over the last two years.

    • Thank you for visiting and commenting!

      Congrats on home-ownership!

      Many people still think rent is better than buy given you have more time, but I still think otherwise. Especially, when the house is in the sub $100K.

      It’s the cheapest house on the block, but not the smallest. It’s in the sweet spot. 😛

  3. Ha, looks like our duplex when we bought it a few years back. Only main difference is that ours cost us about €80.000 to completely rebuild the house on the inside (and it was a lot more than $59000 to buy it in the first place….). Still amazed at both the purchase price and the costs of renovations in the US. It’s so much cheaper than in the Netherlands….sigh.

    Good luck with your project! Should look fantastic once it is done.

  4. You know people, I am envious of you handy folks! $60K for the house and even if we assume $40K for improvements, it is a $100K house in a $400K area. Huh? It is awesome news….I should sign up for a home building class!

    PS: I vote for a nice game room in the basement 🙂

    Best of luck on the reno!

  5. Huge congrats on making this making this all work Vivanne. Big risks, big rewards. Very nice!

    How much rent are you hoping to get?

    You say labour is cheap, are you sure it is quality enough to get the job done right?

    Tristan

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