Sometimes Doing What Everyone Else Says is Crazy is the Best Option in Real Estate.

in realestate •  7 months ago

How I Bought a HUD Foreclosure, Rehabbed it, Lived in it, Sold it for Profit.

2017-04-24 20_41_29-101 Lapham St, Rochester, NY 14615 _ Zillow.png

Back in Late 2008 the Real Estate Market was in Shambles.

I returned to Rochester, NY in September 2008 just as the financial markets were crumbling. All I had to my name was a short stack of silver and a bit of money from my IRA from my job at a hospital in Tampa. I was living with my best friend and times were uncertain. So I took a job at a local VW and Mazda dealership because I was already a Master VW salesman so I knew they would hire me on the spot. I also knew that I could not live with my friend forever.

So, with reluctance I asked my parents to help me buy a foreclosure. At the time the listings were full of them and if you had cash you were king. I found this old Kodak home just 300 meters from Kodak park. The neighborhood had a pond, easy access to the highway and a beautiful path that led to the Monroe County Zoo. I knew it was a good neighborhood so we put in a ridiculous bid of $19,500 which was below the HUD asking price. Since this was a new listing by HUD I knew that buyers who were planning to live in the house for two years had priority. We won the bid!

The Condition of the House was Rough.

  1. The pipes had burst in the upstairs bathroom during the winter and ruined the walls and the hardwood floors.
  2. The house had lead paint.
  3. The furnace was shot.
  4. The roof was in need of replacement.
  5. The windows were original single pane.
  6. The Whole House was dated.

Water Damage From the Pipes Bursting.

Stairwell with Water Damage.

Living Room

Living Room Opposite.

Second Floor

Bedroom 1 of 3

Bathroom

The Price was Right.

When my team inspected the house they were really impressed. They figured they could remodel the whole interior for around $13k and make it livable. We were thrilled and gave them the go ahead. There were aspects of the house that really set it apart. The lot was huge because the houses behind were torn down to make room for the new highway. The former owner bought the remaining property of three houses which made my yard T shaped as seen below. Also the prior owner had installed a beautiful chain link fence around the property.

The House is Finished.

After about a months worth of work my team was able to complete the total remodel of the interior. We did not replace the roof until I sold the house in 2014.

Closet Turned into Half Bath.

Bedroom 1

Bedroom 1

Bedroom 2

Bedroom 3

Attic

Attic Opposite

Main Bathroom

Basement

If You look at the center column you can see damage from the water. We had to add a new support column.

Block Windows

My Tenants Dogs on the Trail to the Zoo that Crosses the Genesee River.

In the End We Sold the House.

I had the pleasure of living in the house for just over two years before I moved to Panama. For a little over a year I had a tenant. Due to the burdens of being landlords my parents and I decided we needed to sell the house. So we put it up for sale and it sold after about 4 months on the market. We had to drop the price from $95k and ended up selling for $75k. In the end it was a great investment because it allowed me to live for cheap in a safe neighborhood. We were able to sell for a decent profit that the tax man ended up gobbling up. If I had to do it all over again I would.

If you can do it avoid the temptation to buy anything for top dollar. I know it sounds great to buy a new house but sometimes a house built in 1910 is the better option. this house was solid as they come. It just took a little tender loving care to bring it back to its former glory.

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Excellent post sir @hilarski, what he just did with that house is amazing, you can not believe the transformation he has suffered, there is no point comparing one thing with the other, I really congratulate him for the great work of recovering that house , Has been very beautiful.
Thank you very much for sharing the post

Wow. To call that house a fixer-upper would be generous. Well done!

My wife and I bought a property in Nashville in 2007 to use as a rental investment, and it was someone else's flip. We had no idea what we were doing and on paper, at one point, it looked like we had lost $40k. Thankfully she convinced me to hang on and now we've got great tenants (after so much drama) and a great property manager. We've had plenty of interesting moments including a fire with $50k in damages. That turned out being a net positive for us though as our insurance company really took care of us and our property manager owned the rehab project to stretch that money amazingly well. Now, on paper, we're doing quite well with it. Someday we may sell it, but for now it's cash-positive for us.

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Sounds like a winning investment to me. If I would have had a fire with my tenant I think I would have had a mental breakdown. I actually lived in the house without insurance to save money for two years. We owned it outright so we could swing it. It still made me nervous!

I would love to buy some rentals with my Crypto profits in the future.

What great before and after pictures. Well done!

It just took a little tender loving care to bring it back to its former glory.
I agree with you, we can make a historic house life again. :)

That house was in rough shape before you got a hold of it! Great job on the complete role model! I bet this was a blast to do!

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I spent a ton of time alone sanding that stairwell. The water damage sure took a toll but in order to save money I had to put some labor in as well. My Mom @Sunscape really came through as well. It was one of the best educations I ever had.

It's like you were Rehab Addict before Rehab Addict was cool. :) Awesome story!

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Is that a HGTV show? I wish we had that channel. Cable Onda does not have it. You need Cable & Wireless here in Panama for that one

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Yes, it's on HGTV. Or DIY Network (which is from the same people who do HGTV).

It is a nice post. Real information is always helpful. @hilarski

Very nice job. You and Bill Bonner.

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RandyHilarski Randy Hilarski tweeted @ 25 Apr 2017 - 02:41 UTC

Sometimes Doing What Everyone Else Says is Crazy is the Best Option in #RealEstate #Investingtwitter.com/i/web/status/8…

Disclaimer: I am just a bot trying to be helpful.

Great job Randy, the house looks beautiful. My father and I have just bought a doer uper here in Cape Town and I hope we have similar success! Nice post, thank you for sharing!

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Good luck with it, just be patient.

What a great story and cool pictures to tell the tale. I respect anybody that can fix a house like that because I'm not the greatest at it. Really awesome job.

What makes me jealous is the house price. just 75K for that place! Wow. Something like that in the Netherlands would easily be 4 times more.

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I hear ya, even most parts of the US are much more expensive. That region is known as the Rust belt and real estate tends to be pretty cheap. I used to imagine my house being 60 km away in Toronto where I could sell it for a Million USD. ; )

Great transformation!

Great post. What an amazing transformation... Superb

Great story @hilarski! I only wish that you could actually own property in the US. All property owners still have to pay rent to the ultimate landlord in the form of property taxes.

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Yes, this was the part I hated. Even though we paid cash for the house we still had to pay $300 a month for proprty tax.

Were the previous owners really going to live in it the way it was?

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It was a foreclosure but someone forgot to turn the water off and the pipes burst.

Oh, it was a great investment! I'm learning from you!

Wow! Impressive. You actually made one of my biggest dreams come true!! Amazing work and you gave me with your post hope, to let this dream once come true :-). Absolutely stunning!!!