We purchased an investment property through tax liens and would need to renovate into a rental property.
It is a fixer upper with quite a bit of issues that would require all the trades. We are not handymen ourselves. Although, we can do very few things ourselves, we prefer to bring in professionals after we saved enough for the renovation.
At the moment, we maintain the property. We would like to pay off our mortgage first before saving for the renovation of this investment property. It may not be financially advisable to do so, as this property would not generate revenue while sitting vacant, but we prefer it this way.
The house was built in 1880s. After taking possession, we wired an inspector to inspect the house. He noted quite a bit of issues.
Electricity
The gas company recommended us to upgrade the electric panel (the meter outside). The inspector recommended we upgrade the electricity inside as well.
Heating and Cooling
The two-bedroom house is not well ventilated. We would bring in a heating company to upgrade that. The inspector recommended we replace the heater, AC, and the water heater right from as they are old the start.
Foundation
The inspector recommended we bring in a mason to fix the loose bricks along the foundation. The basement walls seem to be in good shape considering the age of the building.
A post in the crawl space needs to be fixed to better support the kitchen wall. For that a foundation professional will be required.
Pipes
The water lines have been upgraded. The drainage pipes are too. We won’t have to change that.
Underneath the bathroom sink
Floor
The kitchen floor rooted. The subfloor would be replaced. Which mean the whole kitchen will be renovated. A carpenter would be needed to remove the subfloor. At the same time that would make the crawl space under the kitchen accessible for all trades to do their work.
Kitchen before cleaning
The house is in brick with two bedrooms and living room sitting on a basement, while the kitchen and the bathroom sit on a crawl space. The second bedroom is a half story.
The bedroom and living room have carpet which would be replaced.
Hallway
living room
1st bedroom
2nd bedroom
2nd bedroom
The bathroom has been updated recently for the look of it.
Porch
The porch outside would be removed and replaced. There is a deck strongly built, we won’t do much to that.
Doors
The doors seem to be in good shape and quality. We hired a locksmith to replace the door handles and deadbolts throughout.
Yard
The yard is ½ acre and has a lot of wood, and fence to get rid of or repurpose.
The house was full of junks when we took possession late 2018 and we rented a big dumpster in the middle of winter early 2019 to empty the house full of clothes, kitchen gadgets, coach, bed frame, construction tools…My husband and I used our weekends from mid January to mid February to empty the house. It was a great idea to do the work in winter as there was no odor or bugs to bother us.
Garage
Dumpster
Many people came to pick what they can use too. We collected a lot of bags of soda can which we will take to the grocery store to collect the recycling fee.
Bathroom after cleaning
Kitchen after cleaning
living room
Dumpster 2-9-19
We went there today the third week of May to cut some three along the building. It is spring and we need to purchase a lawn mower to mow the yard.
The equity in the house is higher than what we paid for the liens and the subsequent property taxes for two years before we claimed the deed on the property. We are aware that it would cost quite a bit of money to bring the property infrastructure up to code. At the same time the renovation would increase the value of the property.
There are two other properties that we paid the tax liens and the property taxes on for the past two years and should be claiming this year. However, we decided to cut our losses and not to claim them as our company goal is to invest in tax liens with the intentions of been paid back with interest. Our company intends to invest in rental properties as well. However, these two properties we forgo, are outside of the city limit and mainly lands or with a building not occupied for years. The cost of renovation or construction of new buildings is not our company primary goals. We would like to purchase fixer uppers, renovate, and rent them out, not building brand new houses to rent out in the middle of nowhere. As for the current property claimed, the renovation would be challenging and a learning curve for our young business. But in the meantime, all we can do it maintaining the property until we save enough capital investment to undergo the renovation.
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