I'm not sure where to begin so I will start at the beginning of my house hunting experience almost a year ago.
*If you don't want to hear my sob story, just scroll down to the smiley face to get to the details of the house itself.
I've known for the last 4 years that what I currently pay in rent for my studio apartment, is more than what many mortgages are here in town. About a year ago, a conversation took place between myself, my boyfriend, his brother, and their parents. I found out that they had wanted to buy their sons a home, for cheap, so that they could live out their college careers, fix it up a bit maybe, and sell it when they were done with school. This in combination with my situation made me decide that I wanted to buy a house. I wanted to buy a house where the three of us could live, renovate, and then sell about 5 years down the road.
Between the three of us we could get dirt cheap "rent" (although at any time I could still pay the whole mortgage myself if necessary). I would also be investing my money in something I had control over. I won't bore people with my dislike for stocks and the like.
I knew houses were cheap post-bubble, and that values pretty much had to go up (which they are starting to now).
So there were a number of good reasons to do this; and I remain confident for getting this far.
My max loan approval was 55K. I'm young, and while my credit is good, to finish my last year of college I have started working a third shift job so I can go to school during the day. The pay isn't great, but it can afford the apt, so any house with the same payment shouldn't be an issue.
I don't want to take a loan for the max 55K. Honestly, I don't want to pay more than 40K for a house. After spending a year looking here in Indiana, I learned that you don't get much more for that 10K. If a house is selling for cheap around here, it's 20-40K. Otherwise it's 50K+ The stuff in the middle is honestly overpriced versions of the cheap 20-40K options.
So I've been looking at cheap houses. Three categories of homes exist: 2 bedroom houses which aren't selling, houses that have a major major issue that typically costs more than the house to fix, or old houses.
So this is why I am here. There are old houses in our city (1905-1930s) which have been getting gobbled up over the last 4 years by investors and the like. I love old houses, but I fear their secret costs.
I've been through the house purchase process once already but the deal fell through after 8 months of toil back and forth with the bank (shortsale).
So today I come to this forum with a house that was built in 1925. The home itself is a Fannie Mae REO. The house has been on the market since April and this past Friday they dropped the price by 10K to 29K.
This $29,000 home is 1,616 finished sq ft & includes: 3 bedrooms, 1.5 bathrooms, unfinished attic (blown insulation), living room with fireplace, 4 seasons room, dining room, kitchen, and an unfinished basement. The house also features french doors throughout the first floor, hardwood floors (some have been carpeted over), and a two car garage.
So the bad news and the real reason why I am here is because it obviously has problems. I knew this with the previous house I tried to buy, but ultimately couldn't get the bank to come down enough on the price to cover those repairs.
Before I start listing problems I would like to emphasize that I honestly would like to at least try to DIY as much of this as possible. I'm going to have a learning curve at some point no matter what, so I figure as long as I can cover the major repairs contracted or otherwise in my budgeting, I can try doing the work, and let a contractor take over if absolutely necessary.
So, let's start with the roof. There's more than one. There's three of them. One large roof and two small side roofs. The small roofs are leaking. I have measured those parts of the house from the outside and come up with less than 200 sq ft of roof if we assume they need to be replaced. One of these small roofs is a flat roof that I would like to raise the pitch on so it isn't flat anymore. The other roof has a ridge running along the middle. The leak on this roof is along the valley where it connects to the wall of the second story.
Both of these leaks have made it inside the house, and one leak actually ran along the wall and into the hardwood floor. It damaged the plaster, lathe, and hardwood in that corner (this is the 4 seasons room).
The roof over the garage is dipping slightly, although it looks good you can see a difference if you look at it from the corner. As long as it doesn't cave, I'm not terribly worried about it if I can afford the rest of the house. Maybe that's naive, but I figure that's something that can be put off for a few more years with some tarp or something to buy time.
The main roof looks fine; we went into the attic, and where there was once a leak around the chimney; it appears to have been fixed (the chimney has a bunch of tar-looking stuff around the area where it meets the roof). Otherwise the big roof looks good.
The gutters need cleaning. This house has been vacant for some time I assume, and the owner mowed the grass like twice a year according to the neighbors. I wouldn't be surprised if the flat roof failed thanks to a stuffed gutter.
The house is on a slope and the gutters go into the ground where I cannot see how far away from the house they go. I don't know if there are french drains installed or not.
Next, the house still uses water radiators, powered by gas. All I know from this is that this means there's a ton of plumbing throughout the house. So if there's an issue, I fear it's going to be expensive...very expensive.
Bonus, the house does have central AC.
Finally we come to the basement. Here you can smell moisture, you can see condensation on the walls, and tiny puddles along those walls. There's some mold starting to form at the very bottom of one area.
The basement walls have been reinforced. At some point a second, shorter wall, was run along the inside of the basement. It covers every outside wall except one five foot area surrounding the sump pump. Here it appears someone ran out of money, because there's some rebar sticking out where it looks like foundation was carved away to put something else in.
This is the scary part. This is where I normally tuck my tail and run. I know foundations are not DYI. But, the area is quite small, and the house is so big.
I am honestly torn about the potential glory versus price of this home. 29K is a great deal.
The house is on a busy street now but with some bushes the noise can be managed.
So here's the big question. Is it worth the risk? Can I get the absolutely necessary repairs done for 10K?
I would have 5 years to live in/repair this home. I wouldn't feel comfortable putting more than 10K in a single year. If the house needed another 10k, I could probably spread that out over the remaining 4 years without too much worry.
As a bonus, my boyfriend is majoring in electrical engineering and has already done house wiring work if it turns out the electrical needs updating in the home.
I just don't want this to be a money pit where I spend more than I will ever get back. If the house will never be worth more than 50K then why invest more than that amount in it right?
To those who have read my lengthy rant, I am extremely grateful! I am genuinely torn about this property as I want to wrap up my house search and start building equity; but I don't want to be so delusional that I walk into a nightmare.
P.S. Here is a link to photos of both the inside and outside.