Posted by nate(DC) on June 21, 2001 at 15:30:19:
Carey,
I don’t know how two .2 acre lots would fare in your market. In some parts of the Washington area that would be considered pretty large. In others, too small to even consider. The question is, how does .2 acres compare to the other lots in THIS area?
Good luck,
NHT
OK, I need some ideas with this deal… - Posted by Carey_PA
Posted by Carey_PA on June 20, 2001 at 18:50:58:
Here’s the situation:
Bank owned property.
Not the greatest neighborhood, so I’m going to say it’s worth $85k. (I just bought the house down the street and I had folks interested in it for $85k and this property I saw today is DEFINITELY NICER)
Anyway, it’s worth $85k and it’s about 30yrs old. It needs VERY LITTLE WORK.
I’d probably paint the every room (including 3 brs, kitchen, living room, hallways, 2 bathrooms)
I would add a new kitchen sink, dishwasher and range and oven.
Now here is my question: this home and another home is on the same parcel. (they come as one)
This 2nd home needs a TOTAL rehab, it’s about 70+ yrs. old. Now the walls are in good shape, but all the hard wood floors are a mess and the kitchen and bathroom well they need to be totally gutted.
The thing that bothered me about this 2nd property is that when you are in the hallway and you can look at the top of the doorway, it slopes and if you stand across the street the roof slopes as well.
I don’t know if it would be worth it to totally rehab this place or not. If the homes could be split up on 2 separate parcels it may be worth while, but I don’t think they’ll be able to be (they are way too close together).
IF they can’t be split up, trust me this home is NOT the selling point. I have no doubt in my mind that I could sell the main home via a rent to own quickly. (as a matter of fact when ever I tell people to look at the property that I own, they always tell me that they were hoping it’s this other house) AND MY PROPERTY IS ONLY 9 YRS OLD!!!
So, would it be cheaper for me to just tear down that old home? rehab it? or have my sale FOCUS on the main home and tell the interested prospect that they other home is an added bonus to do as they please??
BTW, no matter what, I’m calculating the repairs, etc of the 2nd home into my offer 
(and I’ll take pictures lol)
Thanks,
CAREY
Re: OK, I need some ideas with this deal… - Posted by Nate(DC)
Posted by Nate(DC) on June 20, 2001 at 22:42:31:
Carey,
I think you’ve delineated the 3 possibilities for this second house:
tear it down
rehab it
leave it as-is
Here’s some of my thoughts on the options:
Unless the place is such an eyesore that it would impair your ability to do a deal on the main house (and you’ve indicated that you do NOT think that is the case), I don’t see what you have to gain by demolishing the house. It would cost something, and gain you nothing. Ergo, a bad idea. In fact, it could end up costing more than you think - if the property is that old it probably has lead paint issues and maybe asbestos or other environmental problems. If you demolish it, you will be responsible for ensuring that these are contained. That can get very expensive quickly.
So I guess your choices are, rehab it, or leave it as is.
The next question I would pose back to you is, is it realistic to split up the homes onto separate parcels. I know you’ve said they are close together but that in itself does not mean they cannot be split. I might spend half an hour talking to a GOOD local real estate lawyer to get an opinion on whether or not it would be do-able. The major variables would be the cost to do it, the amount of time it would take, and finally the impact on value if you were to split them. Is the lot large enough that if you split it, you would still have two normal sized lots? If so, you might want to split it and then sell off the second lot (with the junker house) for someone who wants to tear it down and build new. Or maybe then you could worry about rehabbing it. But if the two lots you’d create would be small, I wouldn’t bother trying to do it. It might require a variance, and also would impair the future marketability of both houses because no one wants a small lot.
So, let’s say you decide not to split the lot. Rehab, or leave it alone??
It comes down to, how much would it really cost to rehab it and what could it be rented out for if it were rehabbed? Same as any other investment decision. I am sure some T/B would love to have rental income as well - whether or not you could get enough of a premium price for the property to make it worth while for YOU to spend the money to rehab, or if you could just tell them they could rehab it later if they want to rent it out, is a decision you will have to make based on your local market conditions.
Good luck, whatever you decide to do!
NT
Re: OK, I need some ideas with this deal… - Posted by Carey_PA
Posted by Carey_PA on June 21, 2001 at 08:36:58:
NT,
Thanks for the response. As far as the size lot, it’s .40 acres combined…so what do you think about that size divided in half??
Actually, thinking about the houses again, I don’t think that the MAIN house would be that bad of a deal if they were divided, I mean they wouldn’t have a lot of yard, but it’s doable.
I’m definitely thinking about leaving that second home alone, although I think I finally gound a “semi” honest contractor lol Maybe I’ll get his opinion.
Thanks again,
CAREY