Considering Unfinished Home

[redpoint5]

Here's the awful house.

https://www.redfin.com/OR/Silverton/.../home/26337191

I don't particularly love the layout, how it doesn't fit in with the neighborhood, or the location. That said, I like having that much space, a shop to work on things, an ADU for renting out (perhaps $1,300/mo income), and space for a game room above the garage.

If there's a decent amount of equity to be gained by finishing the place, I'd be interested. I can put in a limited amount of sweat equity by finishing the siding, pouring concrete pad in garage, and putting in fixtures myself. Probably everything else I would contract out.

What I know:

• Duct work is completed
• Electrical wiring is completed but not connected to service. No outlets/fixtures
• New gas hot water heaters are purchased but not installed
• Plumbing is completed but not connected to fixtures
• No flooring installed
• No trim installed

Any very rough estimates for finishing everything with mid grade materials? How about estimates for landscaping? The 2 bed ADU is currently finished enough to be occupied.

What all should I be aware of, or what tips / advice do you have? The lease on our apartment is up at the end of June, then it goes month to month at a much higher rate.

[slowmover]

Always ALWAYS figure you’ll be there 25-years. Things in life can change and just hanging onto a house becomes what matters. Etc.

If you can mail in the keys and walk away almost unscathed, that’s different.

IOW, this is it: The End of the Road.

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[redpoint5]

I don’t follow any of that. I’ve got another house that I’m renting out and am cash positive all expenses considered. I’ll never be short on a mortgage payment because I would bring in roommates if I hit hard times. I might bring in rooommates even if I don’t hit hard times. That’s how I have so much cash after purchasing my previous house.

[Stubby79]

For something that I would live in, I'd want something unfinished like that...I could make it "my own" without having to gut it first.

For something I'm going to rent out or flip, I'd want to put the least amount of effort/$$ in to, as whoever rents it or buys it is going to either trash it or remodel it anyway.

[slowmover]

I bought & sold houses for a number of years. “Cash positive” doesn’t mean much, only sounds like it. It’s in evaluating the risk of loss that an emotional boundary be set. No easy way out (no one else able to afford rent you need, etc). What then?

THAT is how to look at the risk.

Finish-out is the most labor intensive. What deadline can you set?

Indeterminate schedule (ready for sale), and wishful thinking about today’s economy continuing indefinitely, aren’t solid.

If others passed on it, there’s reasons why.

The spur to action is what matters.

I made my money the day I bought them. The plan was already in place including dates and dollars. It does not matter, does not change anything — necessity of boundaries & plans — if one intends to keep it.

Part of the “plan” is always landscape. Almost always ignored. Boobus Americanus thinks only of video screens. Take some estimates BEFORE you buy: A plan itself, then what’s necessary to implement that.

Dollars are just value markers. Any market can collapse. So where’s the value? (Unlikely to be the air-conditioned spaces).

Go to the Appraisal District Office and find the appraised value circa 1992. THAT is the likely “real” price. Can you live with it?

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[Piotrsko]

That's my typical modus operandi.

Get a realtor of your own that has flip / contractor/ rental manager expertise.

Be sure you can and are capable of doing the work by yourself. Does not mean you do the work. Figure a minimum of 5 years to complete. See what the county building department has and things they don't like about the project. I once bought a house that should have been condemmed. I made money on all but one houses I have owned, to the tune of approx $20k a year. Suprisingy, made the most $ on the condemned one, but that was market timing.

Decide your end game before hand. Living there forever has different results from flip

Be the best looking house from the street. As slowmover said boobus americanus determines everything from curbside.

Finally. DONT PAINT IT FUSCHIA PINK. Neutrals is the key.

[redpoint5]

Gonna be tough to be the nicest looking from the street as all the other homes are old single story, and this is new double story. Doesn't fit in at all. The neighbors already tried to fight the project at City Hall.

Oh, and get this, the owner is a general contractor. Makes me wonder how everything was started and nothing was finished, and the money ran out. Shouldn't a GC know what it's going to take to finish something? Hopefully the fact that the owner is a GC means it was built properly. Most of the work was hired out and not completed by the owner.

I'm sure the house has little interest because construction loans are different than a regular mortgage. Then it has no curb appeal and people want move-in ready. I find it a bonus that I wouldn't have to tear anything out, and can finish it the way I like. For instance, I only like undermount sinks. Way easier to keep the countertop clean that way.

Since the ADU is nearly complete, and the easiest to complete, the fallback plan would be to live in it until the house is finished. I'd want to live in the house a minimum of 2 years to improve it and save up for building/buying the home we really want. I'd probably keep it as a rental since that's what I did with my home in Vancouver WA, and that's working out very well. Probably better as a rental than to flip since it's going to be tough to give it curb appeal.

My dad is retired and can help out too, so I've got lots of options on how to finish the place.

[rmay635703]

Originally Posted by slowmover

I bought & sold houses for a number of years. “Cash positive”

If others passed on it, there’s reasons why.

The spur to action is what matters.

I made my money the day I bought them. The plan was already in place including dates and dollars. It does not matter, does not change anything — necessity of boundaries & plans — if one intends to keep it.

.

It’s amazing what people will pay for old dives when there is work

Equally amazing how much their value drops when the labor market stagnates

[redpoint5]

My hunch is there will be an economic downturn not too far off, and when that happens housing will stagnate at best, and decline a bit at worse. I've never hired a contractor before, but I imagine bids for jobs are priced lower when people don't have enough work to stay busy.

So, if my hunch about the economy is correct (probably not since predicting the future is difficult), then I'd like to not be in too much on a house now so that I can start another project later on; perhaps our long-term home. The price on this project is negotiable, so if the numbers look favorable, I'd like to pick it up.

Not too many homes show up on the market in this small town, and when they do they go fairly quickly and sell for a bit more than other towns in Oregon.

Today I also asked for soil and engineering info on the hillside property that I'm interested in. Gotta start taking first steps in the various housing options that appeal to me so I can quickly determine to either forget about them, or proceed to next steps.

[Ecky]

My two points of concern:

1) Actually getting financing for the place, and

2) How to sell a huge house in a not particularly great neighborhood.

I don't know how the market is in Oregon. Vermont's real estate market is hot hot hot in Chittenden County, but even here that place would be a tough sell. Nobody wants a 6 bedroom mansion in a crummy neighborhood unless it's going for a fraction of its worth. I expect the places to be able to renovate and then make a profit on are going to be the smaller houses with some convenience in their location.