Anybody here ever bought old farmhouse and fixed it up?

[Dargo]

Thanks for the replies! Obviously, as everyone has noticed, I have not purchased this property yet. I fortunately have a bit of time before I have to make a decision. This is due to the fact that some moron put a lien on the property for supposed work done on the property for my wife's relatives ages ago. Nobody even recalls what it was and the horses rear who has the lien on it can't even recall either but now he's decided that he "must" be owed some money or he wouldn't have put a lien on it.

Until now I had no idea that basically anyone can go put a lien on anyone's property for no real reason. This is clearly a problem, at least in my area. For obvious reasons I will not even get into negotiations on buying the property until this mystery lien is removed. They have now hired an attorney to go after that issue but have been told that it likely will take 30 to 60 days to get cleared up. To me, based on what I've heard, this guy with a lien on it runs scams by putting liens on people's property and extorts money from them whenever they go to sell; however many years later that may be. It honestly amazes me that someone can just go put a lien on someone's property without proving why.

Anyway, back to the real issue. I've already stated that I never plan on living there. My mother used to manage my grandfather's rental properties (her father) for years. At one point he had 23 rental houses. I've personally seen some of the horrible things people do. I think the worst was when I was paid by my grandfather to clean up and make repairs on one of his houses where the people had some sort of iguana (against the rules). It must have lived in one room because not only did that room have all the walls and doors shredded by it's claws up to about 3' high, but one corner literally had a pile of it's poo about 10' wide along the wall and about 2' high. That was the worst smelling thing I've ever encountered. I wanted to just burn the place! Besides that mess, the renters stole every single electrical fixture and every single door knob from the place.

If I do buy it and rent it, my mom offered to 'manage' it for the same terms she did for her father; for 15% of the rental fee. For that she did all of the collections and made bi-monthly inspections for the first year they lived there and then, based on her decision, monthly inspections after that. She passes the place every day now, so it's not out of her way. I was surprised that renters would agree to a contract like that, but she said they did. I think the iguana incident was what initiated that clause in the renter's agreement/contract.

Then there is my overall goal. I will know within about 10 years or so if any of my kids would be interested in living there (whether in that house or tearing it down and building there and having a roughly 12 acre piece of property - includes the attached wooded property next to it that I already own). If they don't, then I'd be looking to sell for a profit; thus my long term investment statement earlier. Either way, I've still not made any firm decision whether I want to buy it or not. One day I think I'd be foolish not to and the next day I think I'd be a fool to buy it. That's why I'm asking the questions here. I still really don't know what I want to do. About the only thing I know I don't, or won't, do is build a new home there. Just based on my experience through my grandfather I'm not going to put renters in a brand new home.

 

[Dargo]

Couple pictures 'during'........ don't look for 'after' pics for another ten years.

That's a great looking place you have there! I think it's interesting to see the designs, shapes, layouts etc. of older homes.

 

[riptides]

All I got to say is, your strategy seems sound.

But how can you not afford to get property so close to home with family in mind, at todays market prices?

If I had the cash, I'd be scarfing up land like crazy right now.

 

[BungeeII]

Dargo, that fence will leave marks if you sit on it much longer.

If it can be economically repaired, and since your mom's already "been there, done that" with renters, it'd be awful hard NOT buying the home, since you really want that property for future use.

You don't value the home. You don't want it now for yourself or family in the immediate future, so there's no sense in doing a renovation on a home you're not eager to own for yourself.

"Anybody here ever bought old farmhouse and fixed it up?" That topic brings to thought that a person really interested in preserving something, having the means and determination to see it through. Your situation is not really that at all, is it? Right now it's just about the property. If I had the means, I'd buy it and hope to recoup all of my costs by renting it over the next 10 years, including paying the taxes. When you're ready to hand it over to one of your children (or move in yourself), then we can talk about what a burden and expense fixing up an old farmhouse can really become.

 

[bdeboer]

If you do purchase it as a rental property and do not do a full renovation. I would at a minimum make sure that plumbing, heating, and electrical are in good functional condition before the renters move in. I personally would rather fix that stuff when there are no renters there, than at 9:00 PM on a Saturday night.

 

[CurlyDave]

I deal with heating issues by having 3 loaner electric heaters (~$25 each @ Wallyworld). If the heat goes out on a weekend or holiday, I give the renter electric heaters until I can get a normal service call instead of a high priced emergency call.

Air Conditioning going out is not an emergency. Service call next business day.

Plumbing is a "depends" issue. If there are two bathrooms and one goes out, it can wait until Monday morning. If a sudden leak is damaging the structure then it needs immediate attention. If an old slow leak is discovered to be damaging the structure, it waits for Monday.

Electric is the same. One blown circuit breaker is not the end of the world. If something is spitting sparks shut off the breaker and wait until Monday.

Your rental contract says you do repairs promptly, not immediately. I treat this stuff exactly the same way as I do in my own house.

 

[Dargo]

I believe I'm about to fall off the fence and actually buy this old farm house. We got a whole lot closer on price as well as added more acreage with the sale. Unless something changes this week, I should own the place by about this time next week. I do have a question though that maybe someone here could answer. About what "closing costs" are reasonable for a cash sale on a home? I've already done the title search and have title insurance lined up. I'll be handing the owners cashier's checks when they sign off to me. In my mind, that doesn't leave much work to do unless I'm missing something. Based on what I just described, what cost should I expect from the attorney for "closing costs"?

 

[riptides]

Based on what I just described, what cost should I expect from the attorney for "closing costs"?

Attorney fees vary greatly, but you already know that.

I have seen JUST attorney fees of 150.00 - 675.00 on my closings. The later being an attorney who specialized in real estate and title "issues".

Then you have crazy stuff like county stamps, filing fees, water, sewer pro-rate billing, even FED-Ex overnight charges... add another couple of hundred.

Oh, congrats! More land? Cannot go wrong on that one!

 

[Erik_in_Hoyt]

Not knowing how much you're spending on the property, I still wouldn't be surprised if all the filing fees, etc... run close to $1000.

 

[buckle97]

Dargo, I have just done something similar to this. 4.13 acres went up for sale that adjoins the 53 acres we live on. I really wanted the land but the property happened to have a 1950 house on it. I bought the entire property without really having much money in the house at all. As far as I can tell this will be my only opportunity to add acreage to my property and have it all adjoining. The interesting thing is that when this house was built in 1950, it and my current house were the only two houses on this section of road. My house was built in 1926. We closed on it a week ago and I have started some demolition of the interior where some flooring needs to be replaced. Like you, I do not know exactly what I am going to do with it. My daughter is only 8 months old so she will not be living there anytime soon. My mom has just retired and it is possible she may end up living there at some point. The house we live in now is the house she grew up in, so she would not mind being back in the area.
I think this would be a great thing for you to do. I agree that you will kick yourself in the future if you do not do it now.