The other night I ran into some people looking for a home. They said they wanted to buy before the market turns around in order to cash in on the lower prices. I was getting ready to tell about the rehabs in Tower Grove East, but they stopped me and said that they didn’t want a home that was already finished, they wanted a home that they could renovated. As I was telling them that it was possible to buy places for 20-40K, they added one more stipulation: They want a home for around 60-80K which a needs some work, but would be livable while they were doing the renovation.
Usually those homes are a little tougher to find. But in this instance I could think a perfect option. My listing at 3247 Morganford was exactly the kind of place they were describing.
3247 Morganford was built in 1901 and has been reworked a few times. Currently it is set up as a two family, but the owners are using it as a single family. The first floor apartment flows much better as living room, dining room, kitchen and the second floor makes three large bedrooms and an office. To complete the conversion back to a single family there are a few remaining projects.
Install AC units $7000
Remodel Kitchen $7-12,000
Sand/Stain Floors $3000
Replace Roof $4000
For roughly $25,000-$30,000 the renovation could be completed. It is currently priced at $89,900 which means that after making the improvements the new owners would have about $120,000 into the home. That’s a good price for a 3 bedroom 2 bath home with new kitchen, wood floors and updated systems. Compare that to any of these homes which are all within a one mile radius of 3247 Morganford.
There are a few things on that list that new owners could do themselves putting in a little sweat equity and saving money. There are other items on the list that could wait awhile giving the new owners time to save up for the improvements.
Because the home has been well-kept and many of the necessary improvements (updated plumbing and baths and updated electric) have already been made, this home is ready for occupancy.
The number I used for the projects are only estimates. On what did I base these estimates?
AC: Choice Heating and Cooling charged me $3500 to replace and old AC with a new unit tying it into the existing furnace and ductwork, so I doubled it.
Kitchen: I spent $7000 for materials and labor for a kitchen on a house I remodeled on Hartford.
Paint: Mirsad, remodeler, handyman and all around good guy gave me a bid of $2100 to repaint a 3 bedroom, 2 bath, 2000 square foot home.
Floors: Original Floors charges $600 for the first room and $400 for each additional room to refinish wood floors.
Roof: The two rehabs is TGE just had both roofs completely torn off and replaced, each for $4000.
Again, these are just estimates. It would be prudent for the new owners to get their own estimates prior to purchasing this home so that they know what they are getting into. Additionally, if this is their first home purchase they may want to talk with other people who have taken on similar renovation projects. It can be stressful and without good contractors, it could be risky. However, if they have the stamina and skills to manage the process, buying a home that needs some updating can be a very good investment. Additionally, it will give the new owners the opportunity to participate in the creation of their home.