Shaboom! $26,000 house in NW Ohio - Hopefully doing BRRRR

Shaboom! $26,000 house in NW Ohio - Hopefully doing BRRRR

Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes

I love reading these, so now that I am in the big (well, minor) leagues, I thought I'd start one too.

On September 8th, I, my husband, father-in-law, and 6 week old son made the trek down to the county court house for the tax delinquent auction with an envelope of cash. I had spent months convincing my husband that this was something we should try. He was all for it, but felt that it was too soon, and that we should wait another couple years before diving in. We came to a compromise - if we didn't get the property I'd had my eye on, we would wait. I was wound tighter than a violin walking into the courthouse; I'm surprised the officers at the entrance didn't frisk me!

We went into the room where they do the auction, and didn't look as out of place as I had originally thought we would - I had attended an auction as research before, but it was a regular foreclosure auction, and there were a bunch of lawyers dressed like what I assume actual adults are supposed to dress like - ties, pants suits, etc. I felt like an imposter. At the tax delinquent auction, almost everyone was dressed like me - jeans and a t shirt. There were however, no other newborns...

The property I was interested in was near the end of the list. It was a 2 bedroom, 1 bathroom house in a A-/B+ neighboorhood, surrounded by single family homes in a great school district. We know there are major foundation issues, but if we can get it cheap enough it would be worth it.

Halfway through, the baby starting fussing, so my husband took him out. The house I wanted came up, and I made my father in law do the actual bidding - I knew he would sound more confident than me! (He was only there for moral support / living vicariously through us.) We won the bid for 26,000 - about $1000 higher than I wanted to go originally, but I was okay with it. 

My husband came back in to do the paperwork with me. I asked him - "So, how do you feel?" His response? "We weren't supposed to win!" Oops. Haha. He looked simultaneously terrified and elated. We put the $1100 deposit down and left. They said they'd get in touch with us in 30-60 days once everything was done, and then we'd have 30 days to bring in the payment.

Now all we needed to do was come up with $25,000 to buy the house. 

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Tucson, AZ · Member since 2015 · 1 post · 1 vote
10y

Waiting for the after pictures!

See this reply in the discussion

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  • John HornerPro Member
    Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
    10y

    Good for you!  I grew up in Bowling Green, Oh so I know that area well!

    So do you have the money to close, or are you still looking for funding?

  • Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
    10y

    OK so now tell us what the house looks like

    Post a picture.  Tell us what Zillow says about it.  

    Tell us about the comps and what you are doing next. 

    How old  is it ?

    What are the approx cost of renovations?
    How much rent can you get for it?
    what is your renovation scenario?

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @John Horner:

    Good for you!  I grew up in Bowling Green, Oh so I know that area well!

    So do you have the money to close, or are you still looking for funding?

     We ended up doing peer to peer lending for the house.

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Barbara G.:

    OK so now tell us what the house looks like

    Post a picture.  Tell us what Zillow says about it.  

    Tell us about the comps and what you are doing next. 

    How old  is it ?

    What are the approx cost of renovations?
    How much rent can you get for it?
    what is your renovation scenario?

     I'll post pictures as soon as we can get to the property! 

    It was built in 1950, which is pretty normal for this area. We're estimating around $30,000 for repairs, which includes completely redoing the foundation / basement walls. The house is tiny, so most things we should be able to do ourselves. 

    ARV should hopefully be $75,000-80,000 (comps in the area are 70-90.)

    We should be able to rent it for $750-800 per month - zillow's rent estimate is $825, but research shows that to be a little high.

    Sine we are doing most of the renovation ourselves, we are hoping to have everything done and a renter in by may 1st. The basement alone will take at least a couple months.

  • Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
    10y

    What kind of "foundation" problem do you have?

    What do they recomend as a "Fix" for it and what will that cost

    Do you need a new kitchen and bath?

    What is peer to peer financing and where did you get it??

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Barbara G.:

    What kind of "foundation" problem do you have?

    What do they recomend as a "Fix" for it and what will that cost

    Do you need a new kitchen and bath?

    What is peer to peer financing and where did you get it??

     the foundation is completely shot - bowing in and cracked. It's a pretty common problem here because of our clay soil, but this is about the worst I've seen. Some people will patch or straighten the walls with I beams, but we will have them completely rebuilt - it will cost $20,000. 

    We are planning on completely redoing the kitchen & bathroom, as well as painting and putting in new flooring. 

    Peer to peer financing is just and unsecured loan backed through people - we used prosper.com.

  • Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
    10y

    Hi

    Thanks.  If you are comfortable doing it and could post the address perhaps Zillow has a picture and some information on your house.

    Bg

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y

    Zillow values it at $78,000 with estimated rent of $825

  • Investor · Redondo Beach, CA · Member since 2009 · 147 posts · 129 votes
    10y

    congrats Chelsea. Good for you dragging your husband to the courthouse :)  as long as you are able to refi out at 75% and the repair budget comes in at your estimate with some contingency you should be good to go. Thats awesome. 

    One word of caution, because you are rehabbing yourself you will save $ but there is a good chance you will grow tired of the project, its rehab issues, etc. That, coupled with a long timeline (May) eating up holding costs makes the deal less attractive amd i would hate for you to hate the house at the end of it. 

    Is there any way others coukd do the rehab l, shrink your timeline and still.fit in budget? Trust me, i get why you want to do it yourself, I just think a faster rehab to rent to refi will keep your enthusiasm up. Just a thought and good luck!

    How awesome is making equity and net worth out of thin air? :) BRRR is awesome if done right and again, good luck.

  • Rental Property Investor · Higginson, AR · Member since 2015 · 123 posts · 101 votes
    10y

    Chelsea, Sounds like a great deal, My spouse doesn't want to be involved in my jobs.

    I do a lot of my own rehabbing too. last one took me 6 months by myself working on weekends. I have a full time job during the week.  Sometimes the final trim steps seem to take the longest. I keep walking around the house and picking it apart. touch up here caulk that. I'm my worst critic.  

    You have a solid plan. I didn't know about prosper.com  I will be checking that out soon. 

    scanning the website it looks like it's a 12 month loan. is that correct?  did you finance purchase and rehab? 

    Thanks for the post .   

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y

     We are contacting out the basement,  and we will also have my father in law helping us - he retired early and is super bored, and excited to help. (He used to be a contractor and has pretty extensive electrical and plumbing experience.) With any luck, or time line should be closer to March, but I don't want to count on that for sure. The basement is the biggest variable - I have no idea how long g it will take.

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Ray Fisher:

    Chelsea, Sounds like a great deal, My spouse doesn't want to be involved in my jobs.

    I do a lot of my own rehabbing too. last one took me 6 months by myself working on weekends. I have a full time job during the week.  Sometimes the final trim steps seem to take the longest. I keep walking around the house and picking it apart. touch up here caulk that. I'm my worst critic.  

    You have a solid plan. I didn't know about prosper.com  I will be checking that out soon. 

    scanning the website it looks like it's a 12 month loan. is that correct?  did you finance purchase and rehab? 

    Thanks for the post .   

    Yeah, I think if we're going to do any contracting it will probably finishing stuff - it drives my husband nuts for the same reasons lol.

    They have various time lengths for the loans, it depends on how much you take out. We did a three year loan because it was lower interest than the five year, and we could still afford the payments even if there was no one renting. When we have renters, it should a a small cashflow even if we can refinance. We just financed the purchase.

  • Rental Property Investor · Higginson, AR · Member since 2015 · 123 posts · 101 votes
    10y

    I just got pushed out of the way  by a renter with all the cash. couldn't wait for me to finish all the little stuff. They were ecstatic about the house.  still have a list of a few items i wanted to "touch up".  I had called my realtor for a market value considering selling it.

    Rented before she showed up to evaluate. 

    You are lucky to have your experienced father in law for mentoring. I have a friend that can build almost anything. He has taught me a lot.  I always say the cheapest education is sometimes hiring it done the first time and observing and learning. And utube can teach you a lot, that's how i learned to do sheet rock patching. Son bought a house with 42 fist and knee holes in it.  He spent a weekend fixing one room.  I went down we finished all of the holes in the next weekend.   Thanks to utube. 

      You will do great!  

  • Investor · Redondo Beach, CA · Member since 2009 · 147 posts · 129 votes
    10y

    sounds like a solid plan. I will be following along and watching the progress

  • Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    10y

    Congratualtions you will learn so much....behind every reticent man there is a woman with DRIVE !!!

    My dental hygienist literally pushed her father & unemployed boyfriend (Phd Physics) into a multi-unit gut job. It has since converted them into avid RE investors & rehabbers.

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Pat L.:

    Congratualtions you will learn so much....behind every reticent man there is a woman with DRIVE !!!

    My dental hygienist literally pushed her father & unemployed boyfriend (Phd Physics) into a multi-unit gut job. It has since converted them into avid RE investors & rehabbers.

    Haha true! 

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y

    well I got to go inside for the first time today (my husband had already checked it out.) He made it sound like an absolute pit of despair, so I was expecting the worst. However, I was pleasantly surprised! 

    Check out some of the pictures here:  https://goo.gl/photos/DVmhpWaTMbW2VS2LA I somehow did not get pictures of the outside... oh well. Next time.

    The basement was as bad as I was expecting, so I wasn't worried about it too much. There is some water damage in the kitchen and bathroom, but that's about it - The gutter had basically fallen off the back of the house, so we know what the cause is. 

    It's surprisingly clean for being vacant for 4 years. We'll have to haul all the crap out of it, but it's definitely not anywhere close to some of the bad places I've seen on BP. Thanks everyone for help putting it into perspective.

    We do have to redo all the wiring - it's glass fuses and there's no meter. Luckily, because it's such a tiny house, the whole rewire will only cost $1600. 

    The furnace looks good, and randomly also has a whole house humidifier installed? Not sure how I feel about that. We're still bouncing back and forth on adding central air. We should have a dumpster there by the weekend, and officially have the deed by Friday.

  • Investor · San Antonio, TX · Member since 2015 · 227 posts · 66 votes
    10y

    Well done @Chelsea Ziss! It is very motivating to read about people who get deals going :)

  • Investor · Wichita Falls, TX · Member since 2014 · 382 posts · 123 votes
    10y

    Seeing all those books on the shelf and the knicknacs and the pot on the stove, It looks like someone is still living there!

    Have an "estate" sale, or put an ad for free stuff and I bet most will get hauled away for you! At least the usable furniture and appliances!!

  • Investor · Rochester, WA · Member since 2013 · 221 posts · 30 votes
    10y

    Awesome. Congrats! 

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Mary lou L.:

    Seeing all those books on the shelf and the knicknacs and the pot on the stove, It looks like someone is still living there!

    Have an "estate" sale, or put an ad for free stuff and I bet most will get hauled away for you! At least the usable furniture and appliances!!

    I probably will for that stuff. It was a little creepy,  since we knew she had died (in a nursing home) and all her stuff was still there - even her drivers license! 

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y

    Here are some before exterior photos:

    We got the dumpster delivered this morning, and will be going over tonight to start clearing it out. With the stupid daylight savings time, we'll only have about 2 hours to work.

  • Tucson, AZ · Member since 2015 · 1 post · 1 vote
    10y

    Waiting for the after pictures!

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y
    Originally posted by @Prateek Chawla:

    Waiting for the after pictures!

     Me too Lol! We got everything cleaned out, but we're waiting for the basement to get done before we start the finishing touches. They are starting the basement tomorrow! I'll probably post a few pictures everything cleaned out soon.

  • Investor · Maumee, OH · Member since 2015 · 48 posts · 23 votes
    10y

    have you ever wondered what a house would look like if the basement was gone? Well here you go!

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