How long is a piece of string?

Discussion in 'Adding Value' started by RumpledElf, 13th Nov, 2014.

  1. RumpledElf

    RumpledElf all fun in the big city!

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    I have an offer in for a property that is, to be polite, a steaming pile of *****.

    It is weatherboard, probably partly clad internally and externally with asbestos, might be generic fibro sheeting but lets just assume its asbestos because it probably is. The balance of the cladding internal is cedar. One room actually isn't lined, as are parts of the ceilings/walls in other rooms.

    It has effectively no bathroom or kitchen. Single cold tap into some container thing with a plug that drains onto the ground outside doesn't count.

    I went looking for termite damage and didn't find any, not that this means anything.

    Talking to a friend who also likes this kind of property (I've owned three before of similar standard) the vague advice is strip the lining/cladding, rewire, insulate, reclad. The house has been extended down one side and the stumps on that side need propping up. Some floors are good enough to polish, on the extended side they sure aren't.

    Or get rid of the damn thing and build something new, where the house currently is there's a good sized level building spot. Nicer old small houses in the area sell for low-mid 300s, very nice ones of course go flying up past 400 and then some. My offer is very low 200s. Land in the area is mid-high 100s. This is a 1200sqm block but maybe 1/3 of that is steep and terraced gardens.

    I'm not quite sure what the cost would be to completely reline/reclad an old house. Its 4 bedroom, not huge or tiny, I'd say about 120-140sqm kinda size. But I suspect I'd get more financial mileage out of a place like this by fixing it than by building something new and modest. Previous renovations I've done have been on stone/brick houses and came to ~30k, at a wild guess this one would be minimum 50k and that's with a lot of DIY.

    This sounds like a Nathan level project :)

    Anyone have any good scary stories about fixing up old weatherboard houses to entertain me while I'm waiting to be haggled with by the REA (multiple offers on this house)?
     
  2. RumpledElf

    RumpledElf all fun in the big city!

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    Oh, forgot to say. My intentions for the place is mostly as a weekender. I have custody of my kids on weekends and I live in a rather dismal apartment with no yard in inner west Sydney. It bothers me rather a lot that they get minimal exposure to anything resembling nature - they spend the rest of their week in an even smaller dismaller apartment with no yard.

    If I get a weekender I can downsize to a smaller but nicer apartment in the city and inflict a long train ride on the kids every friday/sunday night and make them look at plants and stuff. And this place has an awesome backyard.

    I miss plants :(
     
  3. TMNT

    TMNT Member

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    which suburb is it in? and what sort of price range are we talking about?

    and yes ive done massive renos, had some wins and losses
     
  4. Shahin_Afarin

    Shahin_Afarin Finance Broker

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    side note - if it doesn't have a bathroom or kitchen then it will be deemed unliveable and you will have issues with finance.

    Depending on a few things you may be limited in terms of lender selection and LVR.

    You should definitely use this as a tool to negotiate with the agent.
     
  5. RumpledElf

    RumpledElf all fun in the big city!

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    Yeah I know re finance, done this before. I have enough cash to go to almost 50% deposit at the price I offered though so LVR and cash to renovate isn't really an issue. I'll tell her that though - my offer and the other offer are both massively below the asking price, basically at land value.

    The worrying thing is it was actually occupied until a few months ago. Its amazing what people can tolerate.

    Not going to say suburb yet but its one of those satellite ones on the train line from Sydney.
     
  6. Shahin_Afarin

    Shahin_Afarin Finance Broker

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    This is good because I doubt the average punter in sydney is going to have 50% cash to purchase a property so I think its very doable.
     
  7. D.T.

    D.T. Property Lookerafterer

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    Could also go 80, just dont have a valuer inspect it. I did this with one of mine.
     
  8. Allgood

    Allgood Member

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    Hi Elf,

    If it's the house I'm thinking of, it looks like it has loads of potential. A bit too much work for little old me tho! I think was looking at it online earlier in the week and I was thinking of doing it up while I was up at my sisters.
     
  9. travelbug

    travelbug Member

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    I was surprised to hear you are in Sydney, And in an apartment.:eek:

    That must hurt. Hope everything works out for you. :D

    Give me a buzz if you get it. Might be able to swap some reno help for a weekend away.;)
     
  10. RumpledElf

    RumpledElf all fun in the big city!

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    Been in Sydney over 18 months!

    I haven't heard back from the agent ... either way, this is a new bee in my bonnet and if I don't get this one I'm sure there'll be other hideous hovels, while my bank balance continues to go up at a much higher rate than I can spend it ...

    I got my last loan by physically going into a bank and swearing at them. Amazing what a few F-bombs can do.
     
  11. WattleIdo

    WattleIdo Member

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    Cryptic. Do you mean 80%? How do you dodge the valuer?
     
  12. keithj

    keithj Member

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    If it's the one I think it is, then a quick look at the RE photos (or even google streetview) would ensure that more than a desktop val would be called for.

    Maybe 80% of land val would be the go ?
     
  13. fernfurn

    fernfurn Member

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    I wouldnt be offering any more than land value!
     
  14. Television

    Television Schemin' and dreamin'

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    Now there's a rare but delightful problem :p
     
  15. Shahin_Afarin

    Shahin_Afarin Finance Broker

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    This generally works with lower purchase prices.

    Only a handful lenders do this and there is no hard and fast rule. ME Bank, ANZ, Westpac and St George are all lenders that "may" do this depending on the location, price, etc of the property.
     
  16. RumpledElf

    RumpledElf all fun in the big city!

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    Not that delightful, really. Ability to prove saving $1-2k a week doesn't actually correlate with a bank being willing to lend me money, because that savings doesn't come from a boring salaried full-time day job.

    I've actually been saving with the goal to get a $900k-1.1M commercial property but getting the deposit together is taking a while and I'm getting impatient.

    But yes, there are worse problems to have.
     
  17. RumpledElf

    RumpledElf all fun in the big city!

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    Vendor rejected all offers - all were about the same mark well below asking price (ie, around land value). Vendor won't go below the asking price.

    I've put the highest I'll go to the REA and said if he changes his mind down the track, you know where to find me :D

    I think I need to get a bit more serious about looking for a place on the Sydney fringes instead of just randomly putting in offers on dodgy looking places that jump out at me from the listings.
     
  18. janglesey

    janglesey Member

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    Best of luck RumpledElf. I'm sure your kids will really appreciate the big back yard when you eventually get it.
     
  19. RumpledElf

    RumpledElf all fun in the big city!

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    Seems the public trustee is involved and the price is a lot less negotiable than it would appear.

    Currently trying to work out if I can get a bank valuation on land only to match up with the public trustee's valuation. Basically everything about this house hinges on formal valuations.

    I complained about how long it takes to impulse buy a house to a friend and they told me to go to an auction. Such sympathy :rolleyes:
     
  20. lizzie

    lizzie when i grow up ...

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    Can empathise with the long drawn out negotiating and settlement processes - we've still not settled on a property we had an accepted offer on waaaaaay back in April ... and exchanged in July.

    Do you need to live, during the week, in the location you are? Is it possible to move slightly further out and buy a townhouse with a small yard? Mind you - people are doing pretty amazing things with apartment balcony gardens nowadays.

    Sorry to hear about your breakup - but things sounds like they're heading the right was for you - and the best thing is that you and the kids are happy.