It's a fixer... beyond that I am not sure.

[Katharine Chartrand]

I was looking at an REO that I really liked in an improving neighborhood in a great location. I loved the REO but I could not buy it. I would not live on that street with my family because of a creepy house across the street. So I went to the creepy house and I met a really nice guy who eventually accepted a cash offer of $120K. As of two weeks ago, I own the creepy house.

I am not an investor that specializes (fixates?) on a particular type of deal. I enjoy real estate investing because I like solving the puzzle. I've joined bigger pockets to expand my toolkit, have more options, make the puzzle more interesting and hopefully earn more money from my deals by making better decisions.

I like talking through the pro's a cons of a deal. I've enjoyed reading about other people's deals. This creepy house could interesting, so I am going to blog it here. First time posting... please advise me on protocols. Look forward to your comments.

First of all, I realize after lurking on this site for only about a day that I should have done a seller finance deal so I did not have to put the cash out up front. He would have done it. Didn't occur to me. I had never prospected before. Nothing to do about it now.

From where I am now, I could flip it to a contractor, fix and flip it as a residential home or as a rental, or I can fix it up and keep it myself as a rental.

380K is a lower limit for this1600 sq ft 4 br 2 ba in this neighborhood if it were completely rehabed. This house is an anomaly for the neighborhood; all the rest of the houses are either in good shape or really nice. I am going to increase the value of all the homes in the neighbor by addressing this problem.

Electricity is on, gas and water have been shut off. Home inspector and architect found the roof in need of replacement but the walls and foundation structurally sound.

All windows need to be replaced. The interior floor plan needs to be opened up... currently designed is a 1940 rodent maze. It will need all new kitchen and baths windows replaced, porches removed and replaced with some attractive portal.

The first floor is partly below ground, windows do not meet egress requirements. They have to be dug out and lowered. The ceiling is probably 7' 8" and therefor neither legally living space nor NBA ready. However, this is Santa Fe. My architect is experienced and believes that the space can be grandfathered in as living space. However, even if we get a CofO, the ceiling on the first floor is low.

The architect said it was possible to dig out the slab concrete floor to make the celing higher... sounds expensive. Any one try that?

The house has two stories that don't relate to each other... it begs to be split into two units. The zoning is single residential, but you are allowed to have a main house and a guest house. So we could split the house.

The yard is big and you could put a guest house out there. The area is densely built up and the rents are good but the zoning won't allow a third unit if I split the main house. It is frustrating not to be able to capitalize on the yard. Rezoning is possible but far from guaranteed. Architect looking into it. If I can get 3 or 4 units on this property, I am keeping it as a rental.

A realtor I work with a lot referred me to an architect who works with flippers. He says he has done some work for webuyuglyhouses. So far, this architect understand this is an investment and not a personal odyssey to realize my dream home. I haven't had house so distressed it required an architect before, but this one does because there are structural and zoning issues that will inform the design.

I could yust clean it up and sell it to a contractor.This is a major renovation, but not the biggest I have done. Do I go for the guest house in the yard and keep the main house a 1600 sq ft 4br, or do I split the main house into the two units it desperately wants to be.

The architect is drawing up plans for remodeling the house this week, from that I can start estimating the cost of the renovation. I will be pushing him to clarify the zoning issues. These are the main things I need to make a decision here. I'll the post that info when I have it.

I am renting the house back to the owner for two months for $1 per month to allow him time to leave the house he has lived in since he was 12. He had no money to move until I sold him the house. So he is still resident with all of his stuff. He's not moving quickly; I may not have managed that well as I have not purchased an occupied house before. So I'll be blogging that situation as well.