Any ideas for a guy buying fixer-upper house to re

One of the houses he bought in the early 70's had been abandoned for awhile. Windows were broken out and no heat was on during some very cold weather. When the previous owner realized the problem, there was about a foot of water in the (luckily unfinished) basement from some broken pipes. My uncle found out about the disaster and contacted the owner, who ended up selling the house to my uncle for only a couple thousand dollars. My uncle got the water turned off, drained the basement, replaced the furnace and broken windows. He had to fix some things after he got it dried out, but spent a total of less than $10k for a house that he could have easily sold for $50K to $60K the next summer. That house would sell for at least $140K today. But my uncle didn't sell it. Instead,he rented it to the same family for over 20 years, giving them a good deal. The family ended up buying the house when my uncle retired, but had always taken great care of it and treating it like they owned it.

My uncle had very little trouble with tenants. He especially liked law students. I think he had about 20 houses at his peak and something like 50 rental units. They all were from houses he bought and fixed up. He also enjoyed his business and working on the houses and fixing little problems in the rentals.

Location, location, location. And buying smart and being able to do most of the work yourself CAN result in good profits. My uncle retired as a millionaire.

I wish his later investments had worked out anywhere nearly as well as his houses did. He lost big with Enron.....

So now that you're in the middle of it, I'll tell you a few things I've learned. My wife and I ended up fixing up someone else's problem (long story), so I know just a little about it.

1. Be reasonable about how far you want to go. Don't gut the house just because you think it's the right thing to do. The buyer could probably care less how you fixed up the house as long as it looks reasonably good. If you start busting up plaster walls, you'll be sorry before you're done.

2. Think carefully about what you want to contract out. For example, if you're not a drywaller, it's probably well worth your money to contract it out. On the other hand, if you're handy at something (such as plumbing), you can save a lot of money doing it yourself.

3. If it's very old, you'll probably have to redo all of the plumbing, except possibly for the sewer. Just do it.

4. If it's very old at all, the electrical will be a mess. Getting it up to code can be expensive, but there's really no way around it.

5. Don't fall in love with hardwood (or pine) floors. If they put carpet or vinyl over the flooring, there's probably a reason.

As far as taxes go, if you live in the house as your primary residence for three years you don't have to pay capital gains. Make sure and keep good records of what you spend (including your time) in case you have to sell it before then. Consider renting it out rather than reselling it; the tax consequences are better.

In any event, good luck to you, you have a lot of work to do but it sounds like you have a good handle on it.

Next put it on the market for 20% more than you just payed for it or whatever # makes you happy.
Clean up the place up and hope.
Yep I've done it before and will do it again...unless you have a crew or you bought a home where its just cosmetics be prepared.

I've seen a few foreclosures in the last couple years of beautiful properties where the people just plain over paid for a fixer upper -- hopefully you got a diamond in the rough.
Good luck..If you live in the North I'd start by prepping for winter...furnace checks, fix poorly insulated areas where pipes might freeze like external walls or insulating pipes in crawl spaces, drainage issues gutters,down spouts etc..

Once you get the interior down to studs (and probably to the subfloor too if you are doing this right), you'll find plenty of things that need additional work. Good examples: Running grounded wire (of course this assumes your "old" house is not already wired with grounded wire), GFCI outlets near water sources, removing lead plumbing and replacing with PVC, updating the main breaker panel, installing subpanel off main breaker, replacing insulation because it got wet somehow, replacing windows and exterior doors with more efficient insulator-types. The list goes on and on.

Ever laid tile? Ever laid carpet? Ever drywalled? Ever roofed? Do you have a tool rental place nearby (for roof nailers, framing nailers, finish nailers, carpet stretchers, carpet knee kickers, tile cutter, etc)?

None of this is extremely difficult but it takes time, patience, money, and reasonable construction skills. Personally, I like doing all these things so I really enjoy a project like this. Although I hate laying carpet in the worst way ... I thought that was the biggest pain of all construction.

Don't forget permits and local building codes. You may not want to get the permits and follow codes because they sometimes sound stupid but ... The building inspector who goes over your home when you are selling it will very likely find every mistake and start digging into whether or not you got proper permits. It could get rather expensive in fines and redoing your work.

Taxes - I stink at taxes. Ask the IRS and my accountant. Both are still hunting me down.

Reselling - This is a big thing to pay attention to. Watch your market closely. Get the selling prices of similar homes in the immediate area BEFORE you start construction. This way you can set a reasonable budget for yourself and not rebuild a house too expensive for the immediate market. Obviously, you want to make money on this project. It is very easy to go overboard and fix up a place too much. Build the home in a way that keeps your market open. Examples: 1) Don't put in a pool, 2) Don't build many "built-in" cubbies/cabinets in the home, 3) neutral colors on walls and floors. Basically, don't do anything that may reduce the number of people that come to your Open House.

Best of luck. Have fun and enjoy the process.

Mark Hill
Dearborn,MO

Never again. Tons of hard dirty work. Dust is so thick it is more like dirt. 4 legged critters have used it for the toilet more times than you would emagine. No insulation, wiring shot, wood rotten, holes in roof.

I wish you the best of luck but you are in for a long cold winter.....so to speak.

Just gotta make your mind up to it, take it one step at a time, do not get overwhelmed by the task at hand; pride yourself in what you are able to get accomplished. Then, if your wits, money, and helper (mine was wife and 4 kids) is still around..... .enjoy.

Best of luck,

Mark