I’m just beginning the process of buying my first house. As a carpenter, my dream is to buy something rundown but in a good neighborhood (Hudson Valley NY or western Connecticut).
Some friends have warned me that the potential for disaster is very high in buying a “handyman’s special.” Does anyone out there have any real-world experience renovating an older home who could tell me what to watch out for?
For example, I would guess checking out the foundation and the sills would be a good place to start looking for looming disasters. That and septic systems, etc. But any other thoughts would be greatly appreciated. Thanks.
Replies
<<<<Does anyone out there have any real-world experience renovating an older home who could tell me what to watch out for? >>>>
Mike,
The answer to that question is simple.
EVERYTHING!!!!!
Most everyone here knows about some of my experiances with the historic run down house I just bought in a great hood. Circa:1680.
Foundation? ROFLOLMAO...had to spend about six grand digging another trench in front of the rubble rock wall to pour concrete to tie it all together from "hopefully" not buldging in any further. That was a trip in it self. One blown out wall but I re built it.
I could write volumns but I think my first answer is sufficient. BE weary of everything and expect the worst.
Bottom line is that you need to be seriously in love with the project and willing to spend a whole lotta money depending on the size of your house.
Its going to be love hate realationship but you better be sure theres a whole lot more love then hate for you and your family because you have no idea what you may be getting into.
I happen to have a best friend that runs a Stiener(Whaldorf) school in the Hudson valley (Ghent N.Y)and has lived there about twenty years or so. If you'd like his phone number Email me.
I'm in cold Spring HArbor on Long Island if your ever in town. Stop by and witness what is a horror to most but a joy to me.
By the way...one hint as to weather or not to buy the house? If you need an engineer to look the house over for you (no offense Bob Walker, but I'm sure you get my drift) then don't buy it.
Be old and decaying
Namaste
andy
In his first interview since the stroke, Ram Dass, 66, spoke with great difficulty about how his brush with death has changed his ideas about aging, and how the recent loss of two old friends, Timothy Leary and Allen Ginsberg, has convinced him that now, more than ever, is the time to ``Be Here Now.''
http://CLIFFORDRENOVATIONS.COM
Edited 4/30/2003 2:11:32 PM ET by Andy Clifford(Andybuildz)
If anyone would know about old houses, it would be Andy.
I bought our first house in 1991 - It was a fixer-upper too. I figured I could overhaul it in about 5 years, sell it at a profit, and move up to a bigger house.
Now - 12 years later - I'm about half done, and it's cost more than twice what I thought it would to fix things. (But I tend to get carried away) There's no way I'll ever recover the money we've spent on stuff.
One of the things I hear repeated often about buying a fixer-upper is to make sure you buy it cheap. I think it's natural to underestimate the money and time required to work on the place. And it's easy to OVER estimate how much friends and family will help you. So don't get too much money tied up in it right off the bat.
Maybe have a home inspector look the thing over and use his report to dicker with the homeowners.
Andy makes another good point - You gotta love the house. Our house isn't wonderful, but it's in a great location or we wouldn't have stayed in it.
And don't underestimate the strain on your marriage. It ain't always fun having your kitchen torn up and eating in the living room........
Ambiguous headline: MINERS REFUSE TO WORK AFTER DEATH
"And don't underestimate the strain on your marriage."
Boss,
Ain't that the truth. My Fiance' refused to discuss planning a wedding until I got our house done. It's taken nearly seven years, with two months to go. She knows better. Growing up her dad bought one when she was a baby, he's still working on it, ...and he's now divorced and approaching retirement age.
Jon
What Andy said and then some! You might find George Nash's book Renovating Old Houses really helpful. http://www.taunton.com/store/pages/070454.asp I lived in an old house and have worked on more than a few and there many ways to get bitten. Bad foundations, swimming pools for basements, rotten sills, outdated plumbing, electrical and heating, cracked plaster, structural problems, lead paint, dry well, defunct leaching field .......... there's no telling what you'll run into. Each house is different and some should be passed on as you may never get your money back out. Go into it with both eyes wide open. Be your own devil's advocate and go over everything with a fine tooth comb so you know what your getting into. Having said that, I love old houses; beats working on a tract house anyday for me. Not as good as it used to be, you might find a subscription to Old House Journal useful, too. http://www.oldhousejournal.com/index.shtml
Mike
All I have ever bought was old Homes to fix up, nothing as old as Andys, they didn't build them that early in Iowa, read and reread what Boss and Andy both have said, because that's how it is.
The money part is the thing that I always underestimate, no matter how many times I've done it. It is a good way to get into something cheaper with potential, and use your sweat to build the equity.
Also what Boss said about the time frame, He must be working faster than I ever did, I always had some two year plan to be complete and 10, 12 years latter I would still be working on it, or not working on it, which was the problem, Don't go in gutting everything thinking that you can do it all at once, unless your not going to live in it while the work goes on.
Don't be scared away from what anybody says here either, just be prepared for everything.
Good luck
Doug
You are right about the cost. It ALWAYS takes 20% more.
Except for when it take s40%.
Excellence is its own reward!
Piffin
"You are right about the cost. It ALWAYS takes 20% more.
Except for when it take s40%"
And that will happen more times than not!
Mike
I sure hope that none of the responses here are scarring you off, probably most of the people here have done it and maybe some of us swear we will never do it again, that's only cause the next great deal isn't starring us in the face at the moment, but it is a good way to gain equity in property, and learn some patience and intestinal fortitude at the same time.
Good luck, there is some good advice here, I wish I would have had it when I started, not that it would have mattered, but at least I could have said, "those were some smart guys"
Doug
Mike,
Aside from the featured homes on the improvement shows on TV, It does take more than a weekend to renovate a kitchen. Before I even begin to get going, I'm going to bail...I have work [on the house] to do.
Jon
I agree with everything mentioned so far.
We bought our old fixer upper about seven years ago its in a great neighborhood and the price was good. Some days I curse this house and others I’m thankful for the peaceful area and nice neighbors.
The only thing that I can add is that with you being a carpenter sometimes the last thing you want to do with your free time is more of the stuff you do at work. With an older house you’ll work your arse off all weekend and never make any “improvements” to the house. Just general up keep is a lot more with an old house. Once you get done doing stuff like mowing the grass, cleaning the leaves out of gutter, changing from storms to screens etc. it doesn’t leave much time for remodeling.
I don’t mean to sound so negative as to talk you out of it. Go ahead and buy an old house, just make sure it’s in a great location, and concentrate one thing at a time. It’s very likely you or your spouse (if your married) will say “this sucks” after a couple years. By taking small bites you can put it on the market after the current project is completed. You’ll lose your arse if you try and sell with half a dozen unfinished projects. I’ve looked a several house in this condition.
We did it, finished it, sold it, and moved on. Everything everybody says is true. Look at it as an investment and don't get emotional. If you fall in love with a house, or shall I say its potential, don't buy it unless a.) its cheap and b.) it's in a good neighborhood with excellent resale value.
Its tough but lots of folks have done it. Plan to do EVERYTHING yourself, and you'll probably make out okay. We bought our fixerupper for 45K and sold it 7 years later for 153K. We put about 25K into it, so I think we made out great!
Mike, I am on my fifth old house and have tried different approaches with different houses and have learned that for me there are several caveats. Be sure that you can afford the time and money to renovate at a fairly quick pace otherwise the project can be overwhelming. For your first fixer-upper I would recommend looking for something that is primarily a cosmetic fixer-upper. I went overboard on my first one and did a ground up renovation with all new mechanicals etc and lost my rear end. The best financial outcome that I had was with the house that needed the least amount of work. I got lucky on that one with location. Always look for an up and coming neighborhood that is still a little rough around the edges but is beginning to experience some revitilization. I bought houses built in the 1920's that had a lot of character and were for the most part solid and well built. It is very expensive to turn shat into shinola if you know what I mean. I usually buy a house and hammer out the big stuff right off the bat and move in, I then can take my time over the next couple of years to build equity through fairly low cost stuff like landscaping and painting. If resale is your focus be very carefull about where you put your money because some improvements do not pay off. You do not want a champagne house in a Budwieser neighborhood unless you are willing to gamble that someone is willing to pay for a 30,000 kitchen in a 120,000 house. In my younger days I once spent the summer in a tent while getting a fire and smoke damaged house that I bought at auction habitable. If you make the right moves buying a fixer upper is a great way to bank equity and one of the few ways a carpenter can aquire a big chunk of change. I have been able to keep one of my fixer uppers as rental property without a mortgage. I hope this is of use to you and I wish you the best of luck. I have found the whole process of buying, fixing and selling houses to be alot of fun and very gratifiying. Good Luck, Jay
I'll echo what most folks here have said. I love old houses; I've never lived in a new house, except as a very young child. The house I (mostly) grew up in was built in the mid-50s (I lived there in the 70s and 80s) and when my parents bought it they immediately launched into a major remodel that still wasn't completely finished (detail stuff) when they moved out 14 years later. My father did most of the work and I helped. Now my parents are in a 1690 house they've had for about 10 years. They've put a lot of cash into it and there's still plenty to be done.
My own first house was built in 1915 and in the three years I had it I did a wide range of repairs and minor remodelling: new windows, a new roof on one section, electrical, plumbing, HVAC, you name it. Never got more than halfway down my to-do list, even the final "do at least these things to sell the house" one.
My current house was built in 1901. We've lived here 11 months and haven't had a kitchen since December due to complete do-it-myself remodel. I'm hoping that will be done in a couple more months but I'll be working on this house as long as I own it. It's in pretty good shape, though it'll need a roof before long (and I'm not doing that myself).
In short, don't buy an old house if you don't want to work on it (or have someone else do so) for pretty much the foreseeable future. Some of us enjoy that kind of thing, but it's not for everyone. DEFINITELY have a complete home inspection, and if you have a friend with home-repair knowledge you can talk into looking the place over don't be shy about getting a second opinion. You want as much information as possible before buying any house, but especially with an old one.
Mike,
I have a differant take than others..
always buy the worst house in the best neighborhood you can afford.. the only sure way to success..
the worst house will have several things going for it..
1st
if you fix it up it will bring up the value of the whole neighborhood..but your house most of all
2nd
It is very hard to over build when you have the worst house.. there is so much room to improve
3rd.
The government won't tax you on your labor nor require you to carry workmens comp. You won't have to pay for a contractors profit nor his overhead..
4th
The increase in value isn't taxed unless you sell the house and don't rebuy. so any profit is pure untaxed and yours.. not many things you can do in your life that work that way..
Now my cautions..
make certain that you are capable of finishing what you start.. Do you have such a record? If you quit halfway thru you will really lose so make certain that you finish what you start!
Talk this over and put everything in writing with your wife.. If she is hesitates don't do it untill and unless she signs off without you coaking her into it.. She really has to understand the mess, the work and the inconvinence.
Do you know how? really know how or just have seen things done on TV? It makes a differance.. On TV they finish in a a half hour. the real world involves weeks/ months (and in my case a decade)
Don't be afraid! The rewards if successful are easily worth it.. The house I live in appreciates more per year than my wife and I earn..
frenchy.
Right on the money. skipj
I agree with frenchy about buying the worst house in the best neighborhood. I did just that in fact myhouse wasnt lived in for 3 years and its been mainly a cosmetic and up grade remodel ive been doing. But heres something Ive learned. It is a on going project. if you want to live in something that is always is disarray in one room or another for long periods of time. Also and more importantly free time, You will have very little.Its no big deal unless you have small children. In that case you'll be coming home from work and they will be wanting to play with you and have yyour attention cuz they miss you. You on the other hand will be thinking about whatyou have to do and start working you'll be missing a lot of time and things with your kids especially on the weekends and holidays cuz you'll be trying to get things done before the holidays and weekends will be when you'll spend the majority of your time working on the house. But balance is the key. im finishing up a year and 3 month remodel on my kitchen and I am getting ready for another room to completely go through. IMO
Darkworks: Its all 'bout da squilla
Frenchy,
Am I correct in thinking that the total max. tax exemption is $ 125,000/lifetime, and the new home you purchase must cost more than the prior one being sold.
Thanks
that has been increased and it was $125,00 per person so you and your wife get $250,000 which if I'm not mistaken is now something like $500,000 per person.. (sorry not a tax expert) I do know that you get a one time exemption from evan that so I think if you sell out you could make a great deal without a tax hit..
Oh and that's taxed on the increase over the purchase price and cost of improvements..
thus if you buy a $100,000 spend another $100,000 fixing it up and sell it for $500,000 the starting figure is $300,000..
Dead on Frenchy,
Keep track of ALL of your reciepts. Right down to the gas used to heat the place while under construction, rental equipment, and friable tools. It is all money out of your pocket. All can be used to increase the basis of your investment. Yes some might be negotiable but better to negotiate than just give up. I've got a grocery bag full of them I keep and log. Even trips to the hardware store for screws and grass seed. I'll talk with the IRS when time comes to figure capital gains but in spirit and legally I feel it is justified to keep the paper.Jack of all trades and master of none - you got a problem with that?
I think you guys are talking two different taxes. You have your annual property tax that is usually based on the homes' value. So if you purchase a home at a low price, your property taxes should be lower than the surrounding homes. This, however, is very area specific.
The other taxes you have relate to the purchase/sale of your home. The IRS wants a piece of the profit so now anytime you have a profit over $250,000 per owner/taxpayer on the home, you must pay income taxes. So the couple who jointly owns their home would have a $500,000 exemption provided you lived in the home for 2 of the last 5 years. I am confident of the dollar figures, but would check with my accountant regarding the residency requirements. There is no cap on the number of times you may utilize the exemption, just the residency requirements.
Frank
Edited 5/1/2003 11:00:47 AM ET by Frank Tate
Here's a link to the IRS website regarding the exclusion of profit from the sale of your home.
http://www.irs.gov/pub/irs-pdf/p523.pdf
Aaron
Unless the rules changed it was a one time home capital gains exclusion. However if you keep on rolling the capital gains into the next property investment you don't have to pay the tax on the gain. You only pay the property taxes til you cash out.Jack of all trades and master of none - you got a problem with that?
The rules changed a couple of years ago. There is no longer a lifetime limit on the exclusion, it is looked at per transaction. As long as you live in the house for 2 out of last 5 years, you get the first 250K of capital gains free and clear.
Sounds like a great way to diversify neighborhoods or should I spin it as an opportunity to turn us into a country of vagabonds having to move in order to maintain the tax free ability of our home investment.
Who the hell thinks this stuff up? Real estate agents? Have we lost the value of home, hearth, and community?Jack of all trades and master of none - you got a problem with that?
Figure that there will always be surprises. Inspection can give you a general idea, but there are so many things in hidden places that you only find when you're working on the building.
Drywood termites, for instance, seem to pick pieces of structure here and there at random throughout the house. Wood can look and feel sound, but when you saw into it, you find termite galleries. Poking around with a sharp instrument will find only the very worst of the termite damage. Look especially for evidence of water. Termites and rot need water to live, so they tend to be worst where it's been chronically wet. Roof, windows, plumbing.... If at all possible, see if you can determine what kind of moisture barrier there is -- or isn't -- in the outside walls.
Look for settling and cracking.
There's just so much to consider....
Good luck --
-- J.S.
Any problem can be fixed.
If you like the house and like living in a house you are fixing buy the house. Take care of your wife and kids while you are working.
(My daughter has been calling this week. She is in NH and is wanting to buy a house. Her current house of interest is 100 years old and in poor but habitable shape.)
I'm about a year and a half into a 1910 at the moment. You were kind of vague when you said old house, as the range I've seen here spans 320 years. To me, there is probably a good division between when houses were built with modern framing and when they weren't, which is probably around the 1880's - 1900, I'd guess. I'm sure around that time that major changes also took place with electrical, gas, and plumbing. It is probably much easier to update a house where those facilities existed rather than adapting them to a house where they haven't. We bought in a part of town where the bigger older houses are in limited supply and also at the edge of the nicer neighborhood, and that is to our advantage. Unlike most cities, the east side of Portland is experiencing a rejuvenation and houses in inner-mid NE are at a premium. To me, there is nothing nicer than a classic old house with updated modern conveniences. To give you an idea, our house is so solid that we had to buy 4 receivers for the baby monitor since going from one floor to another puts you in a different world.
As for the modern houses, it seems that another change occurred around 1950 when they moved from lath-plaster to sheetrock. Poeple who are used to working with new materials might suddenly find themselves freaking out when they have to deal with older stuff.
Home inspections seems to be a hot topic recently in many forums. In particular, one should hesitate to use an inspector recommended by a buyer's agent, since they may overlook stuff that could be a deal breaker to avoid losing futher referrals. Find someone who bought a house recently and see how their home inspector did. Or find people in the trades who'd be willing to look over their specialty area as a paid consultant. And by all means, be there during the inspection to ask questions. And bring a portable light source and a long extension cord. Once we were really close to the deal, I had the electrician come in and estimate the service upgrade to make sure it wasn't outside our estimate Keep in mind that with a fixer-upper the chances of getting a home warranty are slim.
Ditto everyone's cautions.
I've lived in the economic influence zones of three cities and in some rural places with not much of an economy (that's where I am now). My experience is that it's easier to make money on such a project in a thriving and rising economic area.
Question to all of you who who've tried the fix-up approach: Did you ever figure out what the place would have been worth when you finally sold it if you had just lived there with the old systems, etc. and sold it in only slightly better condition than when you bought it?
So, Mike, I'd add this caution: Figure the time cost of the money you invest. Add your labor at a realistic rate for your skill level in your economy. Add something for the strains and inconvenience of living in it while you work on it. Carefully compare the across-your-market valuation increases with what you think you will spend on the property and then on the work that follows. I've given a big portion of my labor away at this game on more than one occasion.
People I know who actually make money at this usually shop hard: They make low ball offer after low ball offer until they get a terrific price. That's hard to do if you fall in love with a certain property. Be flexible. Be patient. Yes, you'll drive your real estate broker crazy with your bad offers (I'm a real estate broker). The saying goes that "You make your money when you buy" If you get an uncooperative broker, find a broker who's just starting out and is willing to run all over shopping with you. They're always out there.
If this isn't a labor of love as a carpenter who wants to save an old house, then consider buying a home that mostly needs cosmetic fixing. Buy, fix fast, sell fast. An old guy I know made lots of $ with that approach. His motto is: "A fast dime is better than a slow dollar." Think that one through!
If it's a labor of love and you can afford to do it, go for it on whatever you fall in love with! Good luck!
Any jackass can kick down a barn, but it takes a carpenter to build one.
I'm 20 years in mine. Foundation is the biggest thing. W/O that you have thousands of places to fix. Quick check on the rest of it is to sight the ridge. If it is straight and not swayback then the rest of the building probably is sound.
Now there is the character issue. Therin lies the love and salability.
I clearly remember when my (soon to be) wife and I walked thru the door of this place with the realtor. (After self imposed conferences to hide emotion) as the realtor is the sellers agent not yours. We walked thru the door and weren't greeted by thick coats of baby blue flat paint and dog urine stained carpet. oh no we found a house owned by a school custodian that haden't seen a change of paint in at least 2 decades and all of the woodwork had the original varnish. She said "we'll take it". Kinda screws up the negotiations when someone says that. Character is big.
Location is assumed. Without that you'll get a bargain but your kids will have to play baseball next to the interstate unless you buy in the right area.
One thought based on the paint question you posted elsewhere, is if you are going to hire out this work you are upping the ante. If you supply little labor then you tend to increase the cost of the project.
If paint is a challenge then I'd go slow and small.
Sorry, gotta go my show is on. time for Roy Clark to play.
Mike,
I finally have some time to actually get back to you. Let me simply pass on my experiences with my current project. First, I got lucky (I think) Stumbled upon the house I'm in just about as it was going to be foreclosed on, and since I bought it property values around me have more than doubled in seven years.
That much said, my rational for the offer price was, value of land + cost of septic + cost of foundation. That's what I paid for it, and figured hey, I get the rest of the house as a bonus. Not true in 20-20 hindsight. I would have been way better off demolishing down to the foundation and rebuilding completely. There is little left of the original structure other than 3/4 of the: rough framing, roof and sheathing. The work-arounds I've done to the original floor plan have taken way too much cost and effort for what I have now.
Granted, I did get to live in it as opposed to living somewhere else, so I saved there. But who wants to come home to another job? Which is what it became. Not in the beginning, but after 2-4 years. Very demotivating, not to mention the perpetual dust and dirt.
So here's my advice if you want to go that route. Either find a place that you get so cheap that you feel no guilt about tearing down to the foundation, or someplace that needs only minor cosmetics and repairs, cash out you sweat equity and move on.
Been there done it, never again.
Jon
Mike, lot's of good stuff here!! Now I skimmed thru most of the Posts, I may be repeating something already stated,,, butt,, well Mike, if you can get an owner to carry the note, I reccommend, Do It. If you have to go thru a Bank/lender, I sincerly wish you the best of luck. When it states "As Is " in the contract, make certain your communications skills are at there best, and Read that aloud to your potential lender. Once I was denied, after 2 months 29 days, there was a back out clause the seller really wanted to use after one more day, well Mike, I walked out of the Bank, shaking my head,, " Let's see Jim, 18 3/4% interest on all my credit cards, hmm I wonder what that is going to cost me by the time I walk out this door" Get your money lined up first, Best of Luck, and go do it!! Jim J
Wow, what a great response. Thank you all for your sound advice.
I'm on the administrative side of things work-wise, and I miss working with my hands. So buying and old place (1900-1940s) and fixing it up is definitely a labor of love. I enjoy coming home at the end of the day and working on things. I'm careful to make time for family, but they understand that this is the way that I relax and enjoy myself. So that part of things is working out okay.
I live in NYC, and have rehabbed the last four apartments I've lived in, so I understand the horrors of living in a work site (maybe more so because of the shoebox size apartments here in NY). New kitchens, new floors, new bathrooms, etc. And the majority of the work I was able to do myself.
I'm lucky because my brother is a contractor and a licensed home inspector, so he'll be a big help in giving me a second opinion on any property that I find.
Thanks again to everyone for their help.
Mike
Mike
Its me again...guess why? Cause as I was working on the bathroom plumbing I went down the basement and guess what..Tons on water flowing outta the basement drain.
Either I accidently clogged up a line with plaster or the cesspool (15 years old, 13 in use)needs pumping. I tried snaking it to no avail so I called a cesspool/roto rooter guy. So now I'm on hold for two hours to see what he says.
Well, it made lemonade out of a lemon again cause I went down the basement and decieded I should break up the cast iron drain right to the hub so I can snake it out. Then I will run a new drain line up through two bathrooms...one to the new one I'm building on the second floor and one "to be" 1/2 bath on the first floor. I kinda wanted to run the new waste line but it wasn't totally necessary so now.......its done. Just need to find the clog or get the cesspool pumped (joy). See what I mean about a love hate realationship? If its not real true love then don't even bother.
Sounds to me that the house your looking at isnt so old that you'll have so many of these issues but don't hold your breath. the hood your looking in I know real well and its definatly up and coming (if not already there).
I know everyone knows the three things to consider when buying a house. I won't even insult your all intellagences.
As for me.....I most definatly bought the worst condition house in the very best hood and I still don't think I'll make any money on it but hey....I really love this ol crib
PS....I think subconsciously I bought the tipi was cause I thought I may need to live in it a while...lol...after all...as of right now I can't even use my bathroom or kitchen sink.
Might be like the old days for the next day or so....washing in a basin. Throwing the dirty water out the window and a contractors bag in a spackle bucket as the "thrown".....cept I dont think they had contractor bags and spackle buckets back then.
Be old with no pot to ......( and I dont mean smoke..lol)
Namaste
Andy
In his first interview since the stroke, Ram Dass, 66, spoke with great difficulty about how his brush with death has changed his ideas about aging, and how the recent loss of two old friends, Timothy Leary and Allen Ginsberg, has convinced him that now, more than ever, is the time to ``Be Here Now.''
http://CLIFFORDRENOVATIONS.COM