Property Rehab: Fixer-Upper and Construction Talk

I have a family member with credit and a VA loan unused, he has no idea about purchasing a home but is willing. I have construction plumbing and electrical skills but no credit.What would be the best way to compliment each other?

Today I went to Narragansett to look at a beach house. House is about 1400 sq. End of a cul-de-sac. Ocean view. House needs total rehab. Husband died and never finished building the inside of the house. Half of the house is finished. Half is bran new construction. House will cost about 100k for rehab. House is on the market for 399k. House is assessed at 630k presently. Houses in the area sell about 700k to 800k. The house has been on the market about a week. There are 3 offers. I would like to offer 350k cash no inspections or apprasials. Close in a week. 100k rehab brings me to 450k.

So I purchased a home in Normal, IL. My orginal plans were to gut the place out and fix it up so that me, my g/f and our new born could move in. Little did I know my g/f decided to enforce child support on the day I closed on the property!

A couple of thoughts on hiring a contractor

When you hire unlicensed, uninsured help, you get what you pay for - the work of an unlicensed contractor with no regulatory oversight.

When you hire unlicensed help, there's often no way to check on the worker's credentials, registered complaints or quality of workmanship. Should something go wrong, redress is up to you, and perhaps civil court - criminal court if he or she happens to be a crook.

Paying a little more the first time is cheaper then paying the lower cost twice.

Check Credentials

I found out from a friend who works for Habitat for Humanity that they have a re-store in our area and sell doors, windows, etc. They carry new and used items. Naturally the used items can save some $ on rehab costs. Of course they take donations too.

We aren't rehab investors but have some cash investors who are on our buyers list. I passed this info along to them thinking maybe they didn't already know about the store. It also gave me an opportunity to talk to them.

Just got a call from a realtor that is willing to go the extra mile every time because she knows in the long run it will come back many times over for her. Anyway, a 1700 sq ft house is about to come on the market for less than 18k. It is a manufactured home that needs about 12k in work. 3bed/two bath that will easily cover debt service. She believes even in this market it should get between 75 to 85k. The problem is I don't have a lender that will loan the money to fix it up because it is a manufactured home. This house will be gone before I know it.

The following is an article I wrote regarding some health concerns and real estate purchases. Don't jump into rehabbing if you are not protected or if specialists are required by law to remove (asbestos) for example. -Robert

A word of caution: if you are purchasing a substantially older home, know what you're getting! Older properties may still have outdated plumbing, antiquated electrical wiring and environmental concerns such as lead based paint and asbestos.

A couple of weeks ago on my Tuesday evening Phone Seminar; a client asked a question about energy efficient windows. I thought others might be interested in an article I wrote a while back for a website on this subject. -Robert

The "climate" inside a home is often over-looked by home buyers who are usually focusing on other concerns. Unfortunately, families don't discover if their home is too hot in the summer or cold and drafty in the winter until after they've moved in.

Over the years the plumbing industry has seen vast improvements in technology. For instance, although copper pipe is still used in water supply and distribution systems today, more and more PEX (cross-linked polyethylene) piping is being installed as an alternative.

Let’s compare PEX and Copper Piping.

Since building codes are always being improved upon, homes that are newly constructed have the benefit of being built during the most recently adopted version of the building code.

Some examples of updated building codes would be; improvements in the framing of a house based upon "seismic design" criteria. In other words, houses are built to withstand earthquakes better now thru the gathering and evaluation of data involving structures damaged in earthquakes.