Does anyone have experience with investing in older houses?

Question

Hello, I was looking at property online and happen to see that the house is well over 100 years old. Its listed with a realtor and is well below what the house is worth fixed up. I was thinking it could be a potential wholesale or even fix n flip. Its not too far from where I live. Was just wondering if any realtors or investor have any experience with older homes?

Michael Hayworth · Answer

I invest in and remodel a lot of homes in the 100-year old range. Just bought another one last month. I love making them beautiful again. But I'm a contractor, so I know what I'm getting into, and I have the resources to deal with it. Just be aware that in older homes, you have to leave a wide margin for "unexpected" - you just never know what you're going to find when you open a wall or pull a floor. Here are some of the common things you'll run into that you need to take into account: Does the house have central air? Most tenants in decent rental areas don't want to get by with window units. And retrofitting ductwork in an old house can be ungainly. Knob & tube wiring (sometimes mispronounced as knob & tooth). This is very, very common in old homes. Sometimes a home has been partially, but not fully, rewired - and often done poorly. Many times, we'll pull sheetrock or plaster and find knob & tube that's so worn it's just a fire waiting to happen. This would be my biggest concern in a house from this era. I would go beyond just a home inspection and have an actual electrician inspect the wiring. Plumbing. If a house is from 1900, pipes have probably been replaced at least once already, but it's very likely that you'll have old, rotting cast iron drain pipes, corroded copper water lines, and sometimes even gas lines that are done unsafely. As with the electrical, I would go beyond just a home inspection and have an actual plumber inspect things. Have them video the drain lines - it costs about $300, but it's not at all uncommon in homes that age to find rotted drains that are just dumping waste under the house.Mortar beds, plaster, etc. - if you're updating floor tiles or wall tiles, they're not going to be stuck to sheetrock or hardie backer. They'll be stuck in a mortar bed that'll be like taking up several inches of concrete. I recently redid a bathroom in a 1920s house where demo that would have taken a half day in a 1970s house took 3 full days days. And for walls, dealing with plaster is more difficult and expensive than dealing with sheetrock.Framing and structural loads may be odd, particularly if the house has been added onto multiple times. So any wall moves should be done by a true framer who understands structure, not just a carpenter who thinks he can frame a house. (Plus, in Virginia, you'll probably have more permit requirements than I have here in Texas - you may have to get a structural engineer sign-off on any substantial changes.)Can you insure it cost-effectively? I just got a quote from my insurance agent today on another property I just put under contract, and it's several hundred dollars a year higher because the house was built in 1929 than it would be if it was built in 1930 or later.These are just a few of the things that come to mind right away. As I noted, I love those old homes, but as an investor, you have to be very careful about your costs on them.

Jay Cam · Answer

thanks for the advice @Michael Hayworth

Darnell Griggs · Answer

Thanks @Mattias Clymer and @Michael Hayworth. As soon as I posted started thinking about what the repair cost would be and having a contractor look at the house. I agree never know what to expect with older homes. Just seen a story not too long ago where a guy discovered someones grave in in the basement.

Darnell Griggs · Answer

Its 118 years old. I'm glad you mentioned it was on zillow. I originally saw the house on redfin. Its actually a foreclosure. Looking at the pictures it does look liveable

Mattias Clymer · Answer

I would recommend having a contractor, or three, come and give you estimates of what it would cost to flip. Ask the contractors if they would stand by their estimates if you higher them to do the work. I would then have a different realtor (not the listing agent) try to help you with the future value with recent sold houses close by. They could also help you determine the most cost effective way of flipping the house.

Aaron B Lee · Answer

How old is it? what is the building style? When was the last time all major repairs were made? is it in an historical district? is it currently liveable? what is the link zillow or some other website to view it on?