Free Historic Home. To do or not to do?

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Free Historic Home. To do or not to do?

Chris Nelson
Investor · St Petersburg, FL · Member since 2014 · 25 posts · 1 vote
There is an investor building a 110 unit apartment complex in Downtown Wilmington in the historic district. Part of his deal with the city is that he will give away the historic home he owns on the adjacent property so that it can be moved and preserved. He said it would cost roughly $15,000 to move it. He is serious about giving it away. The home was built around the early 1900s. It's a 3br, 1ba with hardwood floors and typical historic charm. The downtown area in Wilmington has a bit of a stigma as a rough area but nothing compared to where we've lived in Baltimore or Dallas. Property values are fairly depressed but the rental market is very strong. It's a happening place and people want to rent here. We also happen to live downtown. I had the thought of offering to accept the home if he would be willing to finance the move and purchase of the lot. We really don't want to eat up all of our available cash on this deal and I'm pretty sure we couldn't finance something like this. Please send your thoughts and suggestions BP community!
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Aaron Montague
Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
12y

I would be amazed if it only cost 15k to move it.  Maybe the move, and associated permits, will cost you 15k. 

Remember the other end of the move requires a foundation/slab, electric, plumbing and sewer connections. Then you need to have all of those things hooked up. 

Free doesn't always equal cheap :)

That being said, I'd treat this like any other investment. Can you acquire the entire house, move it and get it set up for 60k cash? If you can then get $1000+ a month in rent, then this is a deal worth looking at. If it's 60k cash and you are only going to get $550/month in rent, skip it. 

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  • Aaron Montague
    Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
    12y

    I would be amazed if it only cost 15k to move it.  Maybe the move, and associated permits, will cost you 15k. 

    Remember the other end of the move requires a foundation/slab, electric, plumbing and sewer connections. Then you need to have all of those things hooked up. 

    Free doesn't always equal cheap :)

    That being said, I'd treat this like any other investment. Can you acquire the entire house, move it and get it set up for 60k cash? If you can then get $1000+ a month in rent, then this is a deal worth looking at. If it's 60k cash and you are only going to get $550/month in rent, skip it. 

    3Reply
  • JOAN DICKIE
    Residential Real Estate Broker · La Crosse, WI · Member since 2013 · 360 posts · 110 votes
    12y

    Check with the city and state to see if they will limit what you can do to update the home if it on a historic registry. Sometimes states and cities will offer tax credits for restoration/preservation of historic homes, so that may be something to check on also.

    1Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    I love historic homes!

    With that being said, this can potentially cost you much more than you anticipate, especially since the city wants it restored.

    Usually, when there are certain requirements for restoration/preservation, whether from city or tax credits or special loans, the things you need to do are much more expensive and complex, than if you were only rehabbing. I've renovated about a dozen historic homes and I've never tried to work with tax credits, due to that reason.

    Also, chances are that this home still has plaster walls, which will likely all crack during the move. And once too much plaster pops off, the building inspector might require you to completely gut it, because the integrity of the interior walls has been destroyed. Same with ceilings.

    I would do this if this was a higher end sale potential, but would not do this for a mid-range rental.

    Just my thoughts

    1Reply
  • Chris Winterhalter
    Investor · Chicago, IL · Member since 2009 · 566 posts · 274 votes
    12y

    @Chris Nelson 

    Very interesting potential deal. I would imagine value will widely range depending on the lot selected. Moving a historic house like you described comes with a lot of unknowns. Once you figure out the cost to develop the new lot and move the house you will need to actually estimate construction costs. The interior of the house will probably need to be gutted for several reasons. One you will probably be required to bring the entire house up to current code because of the move. Two, moving the house will probably damage a lot of interior walls, floors etc. It could easily cost you over 200k to move and rehab the house. What is the max ARV you would get anywhere in downtown Wilmington? If the spread is large enough it might be worth exploring. Can you speak with the potential company that would be handling the move? Maybe you can get a client list from them and ask past clients what their experience has been. You mention you don't want to eat up all your available cash...then this might not be the deal you want to take on. The risk is definitely higher.

    1Reply
  • Chris Nelson
    OP
    Investor · St Petersburg, FL · Member since 2014 · 25 posts · 1 vote
    12y

    Thank you all for your input and responses.  I really appreciate it.  A lot of very good points were made here and I'm going to dig a little deeper on this one.  

    0Reply
  • Stephen S.
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    If I had a lot of time and interest I would investigate:
    1. The Moving Company's cost-to-move quote (firm - not estimate)  including all permits, utility costs (moving overhead wires, etc.)  and police costs  (directing traffic, detouring traffic, blocking off streets)  and etc. and etc. 
    2. The future site's full acquisition costs.
    3. The cost of providing a full code-compliant foundation and all utilities.
    4. The restoration requirements of the city, the county, the state, the Feds, and any local organizations who may be interested  - same to be spelled out in Exact detail and not just the vague  "to historic standards"  mumbo-jumbo nonsense they try to slide in on you.

    But in the end I think you will find that if there was a dollar to be made here - the developer would be doing it.  He's counting on some starry-eyed amateur historically-interest person or group to take on this likely albatross off his hands.

    Of course it's just my opinion;  I could be wrong. <g>


    stephen
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      Originally posted by @Chris Nelson:

    There is an investor building a 110 unit apartment complex in Downtown Wilmington in the historic district. Part of his deal with the city is that he will give away the historic home he owns on the adjacent property so that it can be moved and preserved. He said it would cost roughly $15,000 to move it. He is serious about giving it away. The home was built around the early 1900s. It's a 3br, 1ba with hardwood floors and typical historic charm. The downtown area in Wilmington has a bit of a stigma as a rough area but nothing compared to where we've lived in Baltimore or Dallas. Property values are fairly depressed but the rental market is very strong. It's a happening place and people want to rent here. We also happen to live downtown. I had the thought of offering to accept the home if he would be willing to finance the move and purchase of the lot. We really don't want to eat up all of our available cash on this deal and I'm pretty sure we couldn't finance something like this. Please send your thoughts and suggestions BP community!

    1Reply
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