Habitable? Financing? Time-Bomb?
I visited a three-story (plus cellar) brownstone for sale. It sorely needs a gut renovation, and is priced accordingly. (Asking price is 1.1M. The selling prices of post-reno comps are in the 1.6M to 1.7M range.) To my eye, the exterior walls look okay. The interior, however, is a wreck. My concerns involve the roof…
I visited a three-story (plus cellar) brownstone for sale. It sorely needs a gut renovation, and is priced accordingly.
(Asking price is 1.1M. The selling prices of post-reno comps are in the 1.6M to 1.7M range.)
To my eye, the exterior walls look okay.
The interior, however, is a wreck.
My concerns involve the roof and the electricity.
It looks like part of the roof is collapsing.
In the master bedroom (on the top floor) there is a hole in the ceiling, two feet in diameter. You can’t see through to the sky, but you can see that the ceiling is rotting.
Toward the middle of that same room, not far from the hole in the ceiling, there’s a home-made, impromptu, floor-to-ceiling support beam, made of cardboard boxes piled on top of a home exercise machine (!) which seems to be holding up part of the ceiling.
There are a couple of garbage cans in the master bedroom to catch the water when it rains.
Although most of the water damage seems to be in the master bedroom, there are additional water stains in other parts of the building, both on walls and on ceilings.
The view from the backyard shows some of the roof sagging over the back of the building.
As to the electricity, it was non-functioning in much of the brownstone. The realtor had to use a flashlight to show us around.
Does anyone have any thoughts about whether banks would be willing to provide a mortgage for a place like this?
Or, would banks consider the building to be unhabitable, and deny a mortgage?
I’d rather not make an offer and hire an inspector if I’d just be wasting my time and money.
Does anyone have any additional thoughts?
Thanks!
Thanks y’all for your helpful advice!
You confirmed what I was thinking and you provided some extra thought-avenues.
Very helpful!
You must get a 203K. As of July, you could do it with only 3.5 percent down — but that was on a conforming loan and this is more. And yes, you have to live in it. Adam is right, call Wells Fargo, they do a lot of 203K loans. Anyway, sounds like a world-class hassle. Will take one or two years to renovate.
hannible…..you’re a complete moron if you think prices are going back to 1996 levels. More of an uneducated fool than I thought.
An uninhabitable house will not qualify for a mortgage. There have to be functioning bathrooms, kitchens and electricity. You can get certain commercial loans for it if it will be an investment property and you can try Community Preservation Corp as well but not if you plan to occupy it.
Banks won’t lend on the property. If you have your heart set on it you are looking at hard money lenders at 14% rates and 4 points upfront or an equity investor. Maybe a 203k which I’m no longer doing. Call Wells Fargo and ask about it. Don’t hold your breath.
-Adam Dahill
That is corret! Wait another until the new year when you can reap the benefits of not being stupid for buying during the housing bubble frenzy and buy whatever you want to buy at 1996 prices. Those of you that wanted to be greedy sorry it is payback time.
Thanks, DIBS.
I agree that 1.1M does not leave much room for expensive suprises that may arise.
Anyone have any ideas about mortgage issues regarding buying an inhabitable building?
That said, a reno budget of $300,000 – 400,000 does not leave much room between $1.1MM and 1.6MM
I would seek hannible’s advice though. he seems to have all the answers and done so much already with his life.
If it’s in Park Slope then your assessment of the renovated value is probably correct.
I think $100k per floor is probably close to what needs to be spent.
There have been estimates on here for full electrical & plumbing. Your’s is in the different situation of a collapsed roof and that’s a costly job depending upon the extent.
I think you need to get a contractor/inspector (with recommendations) to walk through with you and give you ballpark numbers on the major structural issues.
Ray,
I have no experience in renovations.
Do you think that the $100,000 per floor complete gut renovation figure might not apply to a building that’s been so sorely negelcted?