Apologies in advance for the really, really long post!
Background:
I just dropped out of the college I was attending (for reasons not in my control, but not related to finances). I moved back home with my parents to what is also a college town (Inland Northwest) and will most likely finish my degree here, so I'm looking for my own housing. Unfortunately being partway through the semester, everything is rented (or really expensive), but the rental market is significantly higher than other areas because of the students. Rent is looking to be the same or more than a mortgage, but houses are also a lot more than I could afford to make a downpayment on (I haven't ever had a credit card, so I don't have established credit).
There are a couple "fixer upper" houses for sale, but for about what you would pay for a house that needs minimal work. One I really love was posted yesterday, and it's in a really good location (central in town, and right next to a park/schools) but needs a lot of work and won't qualify for a traditional loan so they're suggesting it's an investment property (purchased with cash). They have it listed at about $300,000, the Zestimate is closer to $290,000, and the city evaluated it at about $390,000 last year ($81,000 for land, $309,000 house + etc.). I would want to do most of the repairs myself, as time/money allows, and I'm looking for guidance on how to set myself up best to get this house (if it isn't a completely stupid idea).
Specs:
3 bed
1 bath
.2 acre lot
1,200sqft finished area (main)
700sqft unfinished basement
Built in the early 1950s
Details on the condition of the house (from photos):
Interior -
The photos posted were not staged at all, and I sort of wonder if this was a hoarder house with most of the stuff removed. All bedrooms are fairly small, but one definitely a small office or nursery size. The doors have paint peeling, and it sort of looks like it might be a landlord special and the doors underneath could be re-done. One bedroom is full of tote bins, supplies, etc. and all of them have an aura of dirt (if that makes sense). The drywall is banged up in all three, and there are large (fist? box corner?) holes in the smallest, and one has pin or nail holes like someone threw darts into the paint. It also has some major grooves in the corner of the closet wall, which would probably need to be replaced.
The living room has big patches that suggest it was repaired but not re-painted. The wooden floors have gouges in them that I was able to see in the photos, so they would probably need to be sanded and resealed.
The washing machine and dryer are in the kitchen/dining room, and the kitchen in general doesn't look like it's been updated since the house was built (except refrigerator/stove). A lot of the cupboards are in bad shape, and the linoleum looks disgusting.
The bathroom has tiles missing, especially around the bathtub (where it looks like there are some that are actually falling in), and an entire corner of the wall dividing the bathtub and the closet appears to be rotten/moldy and falling apart.
The basement is entirely unfinished and has a crack in the floor that has been patched, and the ceiling looks to be thin boards (MDF?) that are sagging in the middle. It does have some sort of sketchy looking windows that are at the very top of the ceiling but about ground level outside, so I could theoretically set up a ventilation system and use the space as a workshop.
The stairs to the basement look like they need to be repaired or replaced, they're made out of wood, and some are cracked/warped.
There have been cats in the house, there might be cat related odors (I haven't been inside).
Exterior -
The front door needs to be replaced, because it looks like it's about to fall of the hinges, and the front stoop is covered in disintegrating green something (turf? outdoor carpet?) that would also need to be replaced. The house has alley access, and no garage, so I would be interested in tearing out the front driveway to make a larger front yard and building a separate garage in back (I don't have a car so it isn't an issue at the moment).
The listing talks about "mature landscaping", but it seems more like it has just been neglected for a long time. I've worked grounds, so this seems like the easiest thing to tackle. Trees need to be trimmed, weeds/grasses pulled, the lawn re-seeded, etc.
The gutters look like they really need to be cleaned in the aerial photographs.
The yard is completely unfenced, and filled with "junk" (old cars, bikes, two rusty sheds, rain barrels, garbage cans, etc.)
The edge of the driveway/front lawn also has a bunch of junk, including motor oil, more barbecues, chairs, flower pots, and a lawnmower.
The deck is old wood and looks like it's about to fall apart, and would need to be re-done. It also has strollers, stuffed animals, items covered in tarps, barbecues, broken plastic containers, and other items on it.
Work that I see as needing to be done (not entirely in order of priority):
Deep cleaning of the entire house
Asbestos, mold, insect inspection/remediation
Deal with cat smells
Remove junk + leftover belongings from the property
Replace the front door
Have the electricity re-wired
Fix the bathroom wall issue, replace the tub, and redo tile
Re-do plumbing to move washer/dryer and potentially add a second bathroom
Patch + replace drywall
Repaint the interior of the house
Sand + re-finish the wood floors
Fix the basement stairs
Waterproof the basement
Re-do the basement ceiling (or at least pull down MDF)
Remove the horrible green front stoop cover
Sand and repaint the exterior wood by the front door (most of the house is Trex siding)
Prune the trees
Remove bushes/weeds/etc.
Aerate + reseed the lawn (maybe with clover)
Fence the yard
Re-do the kitchen (slight modernization)
Re-do the deck
Replace the sheds
Remove the front driveway and build an outdoor garage
Plant nicer landscaping (flowers, berry bushes, etc.)
What I like about it:
Location
Customization
Hardwood floors
Basement that could be a shop/work area
Large yard (enough room for chickens, a large garden, etc.)
Large windows in the living room
Potential for haggling down to a lower price
Have I mentioned location?
Space (lot + house size)
Investment?
Next Steps + Advice:
This house appears to be getting quite a bit of attention (600+ views in the last 24 hours, 25+ saves on Zillow), and I'm wondering if it's in my best interest to hold off a little bit to let the sellers potentially lower the price, or to act early in case other people are interested. The needs a lot of work, which I know is something a lot of people don't want, but the housing market here is so crazy there are probably a lot of people desperate enough to consider it (including me). There are definitely some significant concerns, such as mold and foundation stability, so I would want to tour the house and also have at least one inspector come through before submitting a final offer -- I would not want it if there was a serious issue with the foundation.
I don't see this project as being a short term flip, and if purchased, would plan to live in this house as long as possible. My hope, if reasonable, would be $100,000 for the house with 5% down (max offer of $200,000 total, 10% down) with owner financing at a rate of repayment between $1,000 to $2,000 per month with a yearly increase of 5% interest and no penalty of early repayment. I would also offer to allow the seller to leave the junk and etc. for me to deal with, if it lowered the price of the house.
I'm not afraid of hard labor and I'm thinking going into the trades might be a good career move at this point. However, my training so far has been in journalism/marketing so it's not super easy to get a job without a degree and I would prefer to put money into fixing the issues with the house -- especially with the level of necessary work to be done. I don't want to ask my parents or other family members for a loan, and with the whole dropping out of college thing, doubt they would be willing.
Experiences, suggestions, and advice are much appreciated, thank you for reading!
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source https://www.reddit.com/r/RealEstate/comments/1fry7cr/advice_on_buying_a_fixer_upper_house_to_avoid/
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