House Progress Report

So I purchased a house in October. I realize I’ve been short on details on the transaction so let me fill a few things in. I paid 100% cash for the property, zero financing, which made things a lot easier and faster. It’s a little 100 year old 2 bedroom in a central Massachusetts town. I paid $23k for it. It was a bank owned foreclosure, had no heating system, burst pipes, a leaky roof, old carpets, broken appliances, a couple broken windows, minimal insulation, a tub that needs to be replaced and it was missing a few closet doors. Easy enough!

Despite being a computer nerd, a law student and a classical studies major, I’m pretty handy. I was in a building trades program in high school where I learned a lot and gained a lot of confidence in what I can build. Plus I’ve helped my father and brother rehab and put additions on their homes over the years. So to look at this house when I bought it, it would be easy to be overwhelmed. But I just saw a bunch a little things that had to be done and wouldn’t really be too difficult. The exterior’s in good shape with a solid deck and vinyl siding that’s nearly flawless.

Within the first two weeks I patched the roof, sealed up the foundation, fixed all the plumbing, installed a heating system, put in wired carbon monoxide and smoke detectors which the house never had before, fixed the broken windows, added over 150ft of rolled fiberglass insulation and pulled out the old tub. So I still have to finish putting up a ceiling in the kitchen, paint a couple of rooms, install the new tub, patch some drywall spots, reframe an exterior door that refuses to open, replace the carpets and put in the kitchen appliances.

I’m hoping to have all that all finished up by the end of January.

So far I have spent about $1,800 on materials. I paid $540 for a year’s worth of insurance in case the place burns down, and $860 to cover taxes through to 2012. I expect the remaining repairs and upgrades to cost me about $3,000 more. The previous owner paid $90k for the place, but then got foreclosed on. I think, in the current market, fixed up, conservatively, I could get about $65k for it. I plan on renting it out for about $750/month for a few years, then either living in it or selling it down the road when hopefully the market will turn around and I can get someone to pay $90k for it again. As a house I wouldn’t mind making it my retirement home except for one thing, it doesn’t come with much land. It’s private on a dead-end road, and only has one neighbor you can see, but still it only came with a postage-stamp sized lawn.

So anyway, that’s the project so far. When it’s complete I’ll upload some before and after photos. Then I’ll start looking for my next rehab project. Luckily this property was so cheap I won’t have much trouble finding another one I’ll be able to pay cash for.

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