Crazy talk?
OK, to make a long story short, we found this Victorian two-family on the Bed Stuy-Bushwick border that we LOVE. Has almost every original detail, including the original kitchens, baths, and a speaking tube. Beautiful proportions, light, closets, you name it. (Not as fancy as a Stuyvesant Heights brownstone, but we like it.) But then…
OK, to make a long story short, we found this Victorian two-family on the Bed Stuy-Bushwick border that we LOVE. Has almost every original detail, including the original kitchens, baths, and a speaking tube. Beautiful proportions, light, closets, you name it. (Not as fancy as a Stuyvesant Heights brownstone, but we like it.)
But then we had the inspection and found out it needs $80,000 of repairs. (Plumbing, electrical, structural, plaster. Has unknown amount of termite damage.)
We could only do it with a 301K FHA type loan.
Is this crazy talk? Altogether, it would cost about the same as buying an uglier house that did not need repairs.
(Um, except the mortgage rate would be 6.5 instead of 5 percent…)
Particularly interested to hear from anyone who has rehabbed an old house and Montrose Morris: Do all houses with original kitchens/baths — which we want — need this much work, especially plumbing, or should we keep looking?
When we turned on the water during the inspection, it started to rain. (Three fixtures sprung leaks.)
Are we getting in over our heads?
Pretty much any old house is going to need a lot of work, unless the previous owner already did the reno, in which case you would be paying a higher price. Taking on an old house is “crazy talk” — I know because we did it and almost lost our minds. But you could end up with a great house you will enjoy for years.
Some basics for your decision:
1. Don’t do it if you are not prepared for the project to go over budget or take longer than expected. Your prices sound pretty good and I am not sure they will hold. Your one-month deadline sounds downright impossible. There are always delays, especially when you are trying to preserve details, rather than gut. Also, was your estimate from the inspector or from a GC. You need to rely on estimates from a GC (and get more than one). Inspectors can be way off.
2. Be prepared for surprises. I don’t know anyone who has renovated an old Brooklyn house without at least one major surprise (and no, I don’t mean a treasure chest behind the walls).
3. Make sure you either trust your own design sense or have good advice (paid or otherwise). There will be lots of decisions along the way. You will be spending a lot of time picking out every last thing for your house. This can be fun, but it is time consuming and it helps to have an overarching vision.
4, You need to be around a lot to supervise the GC and answer questions. Otherwise, things slow down and a lot of stuff gets done the wrong way.
5. Make sure you have a detailed conversation with the GC about all the things that are not included in the price — all the finishes you will have to buy. Every new door needs a new doorknob. Light switches, toilets, sinks, light fixtures. Make sure yuo are budgeted for all this.
6. Make sure the GC has enough reserves to purchase all his materials when he needs them without needing you to advance more money than your agreed payment schedule (and never let your payments get ahead of the work).
If you can live with all that, go for it. It sounds like a great find.
No, I’m sorry to say that your costs don’t seem realistic—way too low. Equally or more important are the timeframe you mention and its missing elements. Some of the work you’re talking about requires permits, which you haven’t figured into your price for (or the professionals who’ll supply drawings, make applications, etc.), and which can’t be obtained in a month. The need, desire, expectation to complete this all in a month in order to rent are a concern about your ability to cover the cost of delays and deal with unknown conditions that are guaranteed to arise. That’s not an argument against making the purchase, but definitely reasons to rethink and readjust before jumping in. If these prices came from a GC, ask him why he didn’t mention permits and then do another walk-through with another GC.
mopar – i do think your estimate and breakdown are low. we have a 2 story that needed all new electrical and plumbing and floors & ceilings and walls. things come up and stuff happens. i think it will cost over 100k and we haven’t even finished replacing all of the windows. i also think one month is completely unrealistic. do one floor at a time, so you can at least move in to a completed area and figure out the rest.
You mention, 301K FHA loans. Our experience in the last 3 months has been that no lender is doing these anymore.
If someone knows otherwise, please share, because we still want to buy this house.
In September, we tried to buy a 3 family row house in Jersey City. We had an executed contract, and a mortgage commitment from a lender with 20% down.
Although the house was marketed as move in ready, the inspection revealed 80K in immediate repairs. We nagotiated a 100K discount. However even with the discounted price funding a 20% down payment and 80K for the work became an issue.
The Original lender would no longer lend us the money.
We spend the next 3 months trying to get a mortgage. We had the bait and switch done on us so many times. No one would even discuss a 301K FHA, since in a declining market, a house is expected to loose value even after renovations and improvement. We tried to put down 15%, but the PMI people wouldn’t insure. It truly was a nightmare.
Have things eased up a bit? We rented but want to start the process again in the Spring.
I did this last year, near to where this house is but on the Bushwick side of the border. Our house is similar, 2 fam. all original details including kitchen and bath (these however were probably added after the turn of the cen. since they didn`t have that kind of plumbing in 1870), and I say go for it. It is so much more valuble, if you are into antique stuff, to go through this process than to just get something else to save a little money. But it is not only stressful, it can be traumatic. The more realistic you are the less it will overwhelm you, so for starters, it`s going to take longer than one month. Concentrate on the rental apartment first. Work from the top of the house down if you can. What about the roof?Also, I can`t imagine that the amps in this place have been upgraded so there`s another couple of thousand right there. This house sounds rare, and if you feel that you really should save it and you feel a personal connection to it than you probably will make good decisions and have the satisfaction of enjoying it every day. If I can do anything to help, or if you want to see what I did to renovate my house, let me know.
I’ve never paid for any significant work in NY so I can’t say whether that is the going rate or not.
However, that would be entirely realistic for London which I would not expect to be significantly cheaper than NYC.
Perhaps these prices are a pointer to a bigger problem. You’re not paying to line the pockets of the contractor, you’re paying to get a job done. There is definite skill required to do these jobs but none of them are rocket science. Is there a massive shortage of plumbers, builders, plasterers and general labourers that I don’t know about?
Wow, you guys are unanimous. Original details are worth it, and we should increase our estimate of repair costs. This might be a first on Brownstoner.
A breakdown of costs:
*$10,000 replace and install boiler, maybe change to gas.
*$15,000 replace water supply pipes to second and third floors. Replace waste pipes to all three floors. Vent first floor kitchen sink to roof — the vent was disconnected. (Stack is probably good. Other pipes have already been replaced. Most of the pipes are exposed.)
*$15,000 all new electrical three floors (and cellar).
*$3,500 replace 1/4 main beam (maybe more, extent of termite damage not known).
*$15,000 Plaster, paint, refinish three floors. (We could save $3,000 by doing one floor ourselves but it hardly seems worth it.)
*$7,000 replace 14 windows.
*$20,000 misc, such as further structural damage. Includes $1,000 to fix cement in front and back yards, which may be causing some leaking in foundation. Also, two stoves, one fridge, two washing machines, linoleum in two kitchens, basic light fixtures, need to buy and install two sets of selvage pocket doors, possibly two toilets and one $200 selvage wall-hung sink. And I forgot to include hookups for two washing machines — both are next to the stack. How much does that cost? Oh, and there was asbestos cladding around all the pipes in the basement, which was simply ripped off, and pieces still remain and need to be removed properly and sealed. No idea what that costs.
We will strip one tin ceiling, two dish cupboards, and some tile ourselves.
The work needs to be done in one month so we can move and rent out the top floor apt asap.
We will have more than one year’s carrying costs for the whole house in reserve in cash.
We are not changing a thing.
Years down the road we’ll try to strip the woodwork, replace the front door with an original, etc., doing the work ourselves and using our monthly salaries. There is also a lot of wallpaper on the second floor we may need to strip and replaster ourselves over time.
Whaddya think? Sound realistic?
Thanks so much, everyone. You are all invited over for cookies.
You already know you love the house…that’s the easy part. The cost/numbers for repair are not so easy. Don’t rely on the estimate provided by inspection. Make sure you get a really good contractor to walk through with you. That walk-through will give you a lot more information to negotiate price with the sellers. If it started to rain when you turned on the water, you need to look carefully into structural damage from leaks, and not just from termites. It sounds like you’ve found something you’ll love, and that’s a great reason to go for it. Just keep in mind that repairs can become far more expensive and involve far more of a learning curve than able to anticipate in advance.
I second the previous sentiment.
Better to have new plumbing done once correctly, than pay for someone else’s botched job.
It is harder to restore when previous repairs have to be undone.
You will want to see if the 3-4-5″ waste stack can be used still. Feeds, vents and fixtures can be changed, but the waste stack will add another 10-20K, depending if there are one or two sets (baths across from kitchens) Kitchens only will only need 2″ no hub, cheaper and easier to fit than toilet waste bends, which have to be close to stack and cannot cross joists. (Your options are very small, unless there are high enough ceilings the floor below to have a dropped ceiling underneath.)