August 1, 2011

The Start of the Adventure

A big part of the American dream is purchasing a home. Many people value pride in ownership or customizing their own home. The average person or family can gain some security if they are able to buy their own home.  In these times, investing in real-estate doesn’t come without risk but the exchange is lower interest rates and the chance of picking up valued property to be a profit in other times.

Real estate can make you money weather through appreciation or rental income.
Instead of purchasing things that loose value, the hope to put money into things that gain value or make money. This seems to be something that is on a lot of people’s minds in today’s economy.

With the advent of the internet and sites like Zillow, anyone can now search broad areas of the country for real-estate. You can get a feeling of what it would be like to live in different areas and search each area for its positive points and try to find out any negative aspects of that area as well. This by no means is better than actually being there, but it does help. A picture is worth a thousand words and there are many images available from sources such as Google Maps, Satellite Images, Google Earth’s Street view and pictures from cells phones or digital cameras. Video is worth a thousand pictures and helps even more. And yes, being there is worth a thousand videos, but sometimes this is not always an option. So, the ability to try to assess the condition of a house or real-estate over a broad spectrum is enhanced by this technology and knowing how to use it property.

We were looking for an investment in a good community in an area with a good economic future. After reviewing a number of properties for sale, over a period of several months, we got to know what was for sale and what was just not something we wanted to get into. One day, about an hour or so after it was listed, we found a house. It was a foreclosure that the bank wanted to unload, and fast. Why? Well… it was disheveled and trashed. Someone looked to have had a drunken vandalism party there and did a ton damage. However, we saw the preserved value of the property. Due to its condition we knew we could pick up the property reasonably cheap but would have to put a significant amount of work into it to restore it to a fine home and/or an income producing piece of property.

We called our realtor who was able to go there and take multiple photos providing more information on the condition. While at the location, he saw the place was being inspected by other realtors and contractors despite the condition. We could confirm this by the number of inquiries that where occurring on the web site. We took a risk and put in a low offer to see what would happen. We saw no response. After reviewing the photos to help us refine the estimate on the fix it up, we put in another offer. And wouldn’t you know it, it was accepted.

When our realtor called to tell us, he jokingly said the he didn’t know whether to congratulate us or offer condolences. Having never been to the house, we aren’t quite sure either. None the less, we figure we can repair a lot of the damage with some blood, sweat and tears. Also known as Sweat Equity.

The photos from the realtor (Who was very kind to take photos and do an on the phone walk through.), showed a multitude of problems.

Electrical: There is nothing coming out of the top of the electrical box to the pole. We called the electric company who refused to go out unless we were there because "The smart meter says it's on". We asked if someone may be stealing power and if they could go out and look but they wouldn't unless we had an account, but the account would not be active until we got there.

Water: There is none. We don't know if any pipes are damaged so we can't turn it on till we get there. If the water doesn't work, we are going to be in trouble because we are staying at the house while we do the rehab. Also, I hate to say it, but we could not get an inspector to inspect the property before we bought it, because of no water or electricity. The good thing is, we have a water heater. have no idea if it works, and plan to flush it regardless, but it's there.

Pool: Well, that is going to be an adventure all in itself. First of all, someone drove a lawn tractor into it. We have to get it out without damaging the concrete work around it. We have no idea what is in that dark ugly water. Concrete pieces, paint, dead snake and or mouse bodies.iick.

Windows: They are most all broken. We will most likely have to hire someone to come out and replace the glass since it is so hard to transport that much glass in a pickup truck.

HVAC Unit: We don't know if it is there or even if it is working. If not, it will significantly hamper our budget. We think we see part of it in this photo and are hoping for the best.

Drywall: There are holes everywhere. I Have no idea what someone was thinking. It's just kinda dumb.

Roof: There are holes. Not sure why or how, but they are there. The Google Earth flyover shows them there in March of 2011, so not sure what happened. And yes, the tarps do say FEMA on them. We are assuming there is some water damage somewhere. Hopefully it is only in one place... Hopefully.

The great news is the floors are all a nice and cool tile. They look in decent shape and are in every room of the house. A few throw rugs, and its good to go...Hopefully.

Garage Door: It's not there. Well... Lets rephrase that. It is there, but it is not where it should be. I guess we can be thankful it's not in the pool. We are hoping to have it repaired, but it may need to be replaced. No one is willing to go out to look at it unless we are there. So, it will have to wait.

Yard Work: There is a lot of it.The overgrowth all needs to be cut back. May have to hire our favorite gardening crew to come out and get it done. If anything it will give us a good starting place where we can go from there.

Kitchen: The trash is everywhere. It's like they all left in a hurry and/or tried to make the place as unlivable as possible. Hopefully there will be enough in the budget for at least new counter-tops.

Paint: Not only does the place need all new paint throughout the entire house, the threw it everywhere as well. Have no idea how to get it up off the concrete, but will have to try.

Fixtures: We know that one of the sinks is missing and not sure what will have to be replaced. Let's cross our fingers that this is the only one.

OK, so here is the kicker. P only has four weeks in which to get this done. What ever is not done, C will have to finish, and quickly. We also have to get the house at least sealed before two weeks after the closing date because the insurance inspector will be out to asses the property to see if it will be insurable. Because of the damage, we could not get a mortgage, so our budget is extremely limited to about 15,000 in total. I know, laugh all you want, but we are going to give it our best.

So having said that, come along for the ride. If we pull this off, GREAT. If not, don’t do what we did. Only time is going to tell on this one. At the end of the day, as least we got the property for a great price. :)

As we get ready to go on this grand adventure, we will just keep adding our thoughts and assessing the situation. So stay tuned. It should be a fun ride.

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