Need advice on restoring in a depressed neighborhood
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octongue



Joined: 13 Oct 2006
Posts: 2
Location: Columbus, Ohio

PostPosted: Fri Oct 13, 2006 6:55 pm    Post subject: Need advice on restoring in a depressed neighborhood Reply with quote

Hi, first post..
I am new to the idea of restoring aging homes, but am very into preserving and rescusitating failing neighborhoods in my community. In buying a house for the first time, I have decided (80%, anyway) to buy a home in Columbus' "Old Towne East" Historical neighborhood. 75 percent of the neighborhood is in need of rehab, which is why the market is so low there. I need to know about properties such as the following link:

http://oldetowneeastrealty.kingthompson.info/cgi-bin/prop-detail/CBR/2625627

There is a wealth of beautiful, although disheveled, homes there. I want to participate in the rebuilding of the neighborhood, and make it as beautiful as it once was, but am afraid to know what issues lie ahead. As reference, here is another home that is 4 blocks away, that has a mild re-moderning done to it (for only $30,000) dollars more...

http://oldetowneeastrealty.kingthompson.info/cgi-bin/prop-detail/CBR/2630701

THAT IS MY MAIN QUESTION----HOW MUCH IS IT GOING TO COST TO REHAB THE FIRST PROPERTY?

Thanks, and if this is the wrong place, please point me to the right...

--brian
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oldhomeowner



Joined: 04 Oct 2006
Posts: 55
Location: albany NY

PostPosted: Wed Oct 18, 2006 6:18 pm    Post subject: Reply with quote

Unfortunately you are asking a question no one can answer. A good visual inspection can tell you what serious problems the house has. Examples are foundation issues, roofing issues, updating the wiring and electric service, age and quality of furnace and heating systems.
Then there is the question of what you consider a priority and in need of rehab. You can get an idea of the costs by assessing which structural components need repair and how much. That gets the house back to where it should be in a functional sense. Then there's aesthetics and that part is entirely up to you.
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johnleeke
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Joined: 20 Aug 2004
Posts: 2924
Location: Portland, Maine, USA

PostPosted: Wed Oct 18, 2006 7:35 pm    Post subject: Reply with quote

All good advice, but there are ways to get the dollar numbers.

You hire an architect, development consultant or contractor who has actually done the kind of work you are contemplating. Usually you don't want to get this advice from a real estate agent who may have a vested interest in their own advice. You want someone who is willing to sell objective advice and has done actual very similar projects at least 10 times, and 100 times would be even better. You have them visit the house, examine it's condition, recommend a strategy and plan to improve it, and then run a detailed costing of all the work that needs to be done. This might cost beween $1,000 and $5,000 to develop a plan and do the costing. You can do all this before making a commitment to buy the place.

Just in case you have found a real "sleeper" (way undervalued, but in good easily upgraded condition) it usually makes sense to have a non-compete clause in your written agreement with your advisor, so they don't have the opportunity to buy the place out from under you. I've heard of unscrupulous advisors doing just this.

Always check with your local and state preservation and housing agencies to see if there are financial aid programs that will help you. They may also have a program to give you an advisor to assess conditions, etc. It's surprising how many programs there are these days, from fedral tax act programs right down to nieghborhood association revolving loan funds, and sometimes outright grants of money for maintenance. I heard of an interesting one recently that gives up to $10,000 grants to homeowners that doesn't have to be paid back until the house is sold. When the house is sold you pay back the load amount plus a certian percentage of the increase in the value of the house--neat! (it's not in Columbus.)

IF you are new to this keep in mind that there are probably very experienced people already "covering" the potential in such a neighborhood. If you find what looks like a "sleeper" you want to ask yourself "why hasn't someone already snapped this one up." The answers to that one will uncover things you need to know, even if there is no reason, and if there is no one else considering it.

Keep us posted on your progress.

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milledj



Joined: 15 Nov 2006
Posts: 29
Location: Athens, AL

PostPosted: Thu Dec 21, 2006 10:39 am    Post subject: Reply with quote

The first people to participate in bringing back an old neighborhood will probably have higher costs than later restorations. That is because you are breaking ground...however, there is much potential for payback of both the financial and social kind. If you are going to hold on to the house for a while, at least until a number of other homes are restored and the neighborhood revitalized, you will stand a better chance of profit. There are many less pioneers willing to gamble on an 'ify' neighborhood. Many folks may worry about schools and their children's safety, and a transitional neighborhodd isn't the best area for that. However, the more properties that are brought back, the easier it will be to sell the house, and the entire neighborhoods resale value will increase. If you buy now, you are getting the benefit of the lower resale values...but at a cost, and that is probably why "deals" are still available. Probably the best thing you could do is to get partners and buy up a whole block and restore it....This has been done in a number of formerly 'ify' neighborhoods with good results. (Detroit, Cincinnati, and Nashville come to mind). You will know that you were part of a good thing, though, when you got done, regardless of the profit figures....

I guess this isn't anything new to you, but I wish you well.

The other thing to consider is the quandry of gentrification, where the original neighbors are displaced because they can't afford their homes anymore (if you are too successful). . .

Good luck!

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MA in Historic Preservation
BS in Architecture
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