Buying an abandoned property

[Colin Spivey]

I am not looking to flip this house, but I feel that BRRRR'ing a property is pretty similar. I have an abandoned property that has been abandoned and vacant for at least 5 years. It has central heat and air, has a metal roof, an unfinished basement that gives the opportunity to add lots of value to the home or even convert it into a duplex, etc. but it has been obviously squatted in, the carpet is ruined, there are no appliances, bath tubs/showers, toilets, etc. in the house, will need some drywall work, and one room will have to be treated for mold. It is owned by a property management company and I have thought of contacting them to see if they are willing to sell since it is only sitting there and has been for a while, but I need to find a ballpark figure of my rehab costs (as of right now I am thing $60,000). How would I go about a more internal inspection of the water and electricity is turned off? What other things do I need to pay close attention to in an abandoned house? Has anyone been through a rehab of a property similar to this one? Thank you in advance for your response

[Jason Butts]

@Colin Spivey

I’m an investor that buys distressed properties and rehabs them for cash flow. I’ve never sold an investment property. I hold them all. I also have a master plumbing and gasfitting license from Massachusetts and I have a very thorough carpentry background. I can tell you that if you are going to use contractors and not do the work yourself the price is going to more than double. Maybe (most likely) even triple. Rule of thumb for us when using contractors is $1200 a fixture for plumbing (consider the water main a separate fixture, consider the water heater a separate fixture, consider outdoor spigots a half of a fixture, a boiler connection would be half a fixture). For all materials and labor on all systems, plumbing, electrical, drywall, trim, paint, flooring, appliances, fixtures, $10k-$12k per bathroom. $12-$15k for a kitchen. $6k for a room with no plumbing. All this varies a great deal, but you can see how it adds up quick. Structural work can really hit the finances hard too. U could start getting into it and realize a beam is sagging or about to snap. That’s a lot more work. The first think we look at is does the house have straight lines? Is the roof ridge straight? Are the corners all 90 degrees inside and out. Do the windows and doors sit square? Do they work? Do the floors dip in the middle of the rooms or does the house dip towards the center or the floor plan? Is the foundation straight and not cracked or missing pieces? Is the chimney solid inside and out? What appliances go into the chimney? Does it need a liner? (Usually yes because with higher efficient appliances comes lower stack temperatures that don’t draft properly because the chimney is to big by today’s standards and codes). It’s a lot to think about.

If you were good at seeing work that needs to be done and doing guesstimates, you might want to team up with a home inspector who is thorough and takes at-least 10 pictures of each room and includes them in a very detailed report. Guys like that are great to team up with. Me personally, I do all the work myself except roofs because plumbers belong with there feet on the ground and no higher than a 6ft step ladder. It’s just how I was raised by my old school masters. But good luck in your venture. I hope you find what you are looking for