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Advice about an "as-is" (a bit long - sorry!)
I am looking around at houses in my area right now, but am not sure yet if I will need/want to buy. I just want to know what my options might be.
I've been looking on the internet at this house (I'm not ready to actually go to the house to look at it with an agent, although I've considered going and peeking in the windows): http://www.rinehartrealty.com/homes/NC/Belmont/28012/104_Margie_Street/1972069384/index.html For some reason there is a single-wide on the property (that I think could be fixed up to rent out). It's odd, but it just looks like a house next door and not really connected to this house.
This is the description of the house: "Heated Living Area measurement based on finished interior renovation. Home has been partially renovated with new roof, siding, windows, electrical, & plumbing. Needs electrical inspection & hook-up to main & interior renovation. Lot includes single-wide mobile home w/separate electric & water meters currently connected (conveyed at no value). Flat, corner lot. Sold as-is. Estate sale."
I inquired about the shape of the inside from the agent and this was her reply: "No, I don't have any pictures of the interior. It needs a full interior remodel. The house is not currently habitable, i.e. there is no kitchen or finished bath, and some of the walls/ceilings still need sheetrock. The mobile home is also in disrepair and would need a full interior renovation."
My salary is pretty low, so a few hundred $ mortgage like this is a must. I do have money in the bank for a down payment. Being able to rent out the single wide would be pretty nice if that worked out.
My dad could help with an interior remodel, as well as some other family and friends. I'm a teacher and would have the summer to work on this. I've kind of been obsessed with IKEA's website the last couple days looking at kitchen and bathroom ideas. It would be a lot of work, but I think it's something I'd be up for.
My main question is, what price do you think the house should reasonably be sold for? The list price is $49K (dropped from $59K). Most houses in the neighborhood are worth btwn $60K to $80K. Obviously I would need to consider the price of repairs in there. What would you offer on something like this?
Thanks for reading all this and humoring me and my thoughts. I know I may be getting ahead of myself, but I just want to explore some options right now.
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Re: Advice about an "as-is" (a bit long - sorry!)
Unless you're very handy yourself, or have lots of money in the bank, I would run away from this house fast. The fact that there isn't one picture of the interior is a red flag. You should definitely go look at the house, have someone qualified to do the work required go look at the house, and then evaluate if you have enough money in the bank to cover the repairs, down payment, and leave a hefty emergency fund for the unexpected things that will invariably go wrong.
A full interior remodel doesn't sound like something that you could do with friends and family helping you, unless you won't need to move in for a while. I would not count on that being a viable plan. Can you pay a contractor and others to fix the house if family and friends don't come through?
Sorry! I know I'm a Debbie Downer. You should watch a few episodes of one of my favorite shows, Property Ladder, when people tried to use all volunteer labor to get their houses done instead of hiring professionals. Reruns come on TLC on Saturday mornings. It never turned out well, and they always blew their budget calling in professionals at the last minute.
Sorry! I agree with PP. Additionally, unless you were going to buy the place with cash it doesn't sound like you could get a mortgage for it unless you did a 203K renovation loan. Those can be very hard to deal with and the loan would be higher than the purchase price because it would cover the repairs and renovations.
For the house to qualify for a traditional loan it has to have interior walls and the plumbing has to be connected and functioning.
Yeah, I think this is true as well. Plus, even though you could do a lot of things yourself, my guess is it needs electrical and plumbing work, which I would NOT try to do yourself unless you were really experienced. The costs of completely redoing the interior are probably going to put you over the average sale prices of the neighborhoodl (Assuming you pay $50k for it, the renos could run $30k easy)
This is what I would say. It's going to be impossible to get a mortgage on the property unless it's a 203k loan. With a 203k loan, you have to use approved licensed contractors so your dad wouldn't be able to do the work. We did buy "as-is" though (also an estate sale) but were able to get a mortgage because everything worked - there was a kitchen, electrical, toilets and plumbing, etc. it was just really date and needed a lot of work. We did 99.9% of the work ourselves and did all our renovations in cash. It has been soooo much work- basically 10 months living in dust and construction and it's exhausting.
I looked at the listing and one thing in particular stood out at me.
"Recent renovation...with new electrical. Needs electrical inspection."
Run. Fast. That means the previous owner decided to rip out the existing electric and put in updated lines, then never had it inspected. 9 times out of 10, that house will fail the inspection and you'll have get an electrician to come out and fix whatever the weekend warrior flucked up.
Plus, if the previous owner was bold enough to attempt electrical work, the rest of it probably was pieced together as weekend projects as well.
And for the rental trailer... It'll cost more than it's worth to make it habitable. You'd be better of just removing it from the property.
I'm betting that listing is aimed toward a cash buyer. Someone who can rip it all down and start from scratch.
http://pandce.proboards.com/index.cgi#general
Thanks for the advice! Looks like I need to keep searching. This seems to be more of an undertaking than I originally thought. I have no idea about any of the different types of loans though, so that was helpful.