Property stabilization costs?

onecity · PostApr 25, 2017#12017-04-25T20:48+00:00

https://www.google.com/maps/place/Whitt ... 66!6m1!1e1

This is a pretty remarkable building, and LRA shows it can be bought for <$5k (including an adjacent empty lot). It has a slate roof, but obviously it's been rained in a lot so it is a total gut job I am sure at this point. I'm increasingly interested in it, because of 1) its proximity to the north Sarah development (1 intersection to the southeast), which is quite nice, and 2) the fact that it is a good example of the local Richardsonian Romanesque style. But it could be a prohibitively expensive thing to do as well, given what it is. And then there's the surrounding abandonment.

Does anyone have any gut sense of what is involved in stabilizing something like this and what it costs? I know there have been discussions in the context of smaller homes, and in the context of large buildings like the Cupples bldg that came down recently.

Also, does anyone know of any other development activity occurring in this area surrounding the BMS Sarah project?

framer · PostApr 25, 2017#22017-04-25T20:57+00:00

Sorry, I can't help with your questions, but I've admired that one for years now. Sure is a beauty!

PostApr 25, 2017#32017-04-25T21:43+00:00

Here's a bit of history on the house:

http://kenzimmermanjr.com/the-big-house-on-cook-avenue/

And more from Michael Allen:

http://preservationresearch.com/histori ... an-assets/

http://preservationresearch.com/abandon ... -whittier/

imran · PostApr 25, 2017#42017-04-25T22:03+00:00

I have done a few rehabs. The cost depends on what you are planning to do with the renovated property.

If you chose good quality finishes with an aim to sell, you could easily sink 300k into it.

If you are looking to stabilize and renovate into say 3-4 apartments with good design but not expensive materials, I think you would need about 100 k. Big costs would be roofing, hvac & ducting, tuck-pointing, floor joist reinforcement if necessary and new plumbing.

I hope you do go for it. It is a very fulfilling process and definitely a labor of love.

bwcrow1s · PostApr 26, 2017#52017-04-26T12:34+00:00

imran wrote: ↑
Apr 25, 2017
I have done a few rehabs. The cost depends on what you are planning to do with the renovated property.

If you chose good quality finishes with an aim to sell, you could easily sink 300k into it.

If you are looking to stabilize and renovate into say 3-4 apartments with good design but not expensive materials, I think you would need about 100 k. Big costs would be roofing, hvac & ducting, tuck-pointing, floor joist reinforcement if necessary and new plumbing.

I hope you do go for it. It is a very fulfilling process and definitely a labor of love.

Thanks for the insight here. It would be great to have more threads like this.

I've been looking into some of the smaller LRA properties as well -- does anyone know if you're able to apply 203k FHA loans to wrap in renovation costs? Or do they only apply to HUD properties? I'd love to have one of these properties rehabbed for when I'm done with the rental market, but lack 100k-200k in assets to make it happen. Also assuming that most banks would never loan that amount of money on a rehab property without a wild interest rate, yes?

onecity · PostApr 26, 2017#62017-04-26T14:19+00:00

Those issues are why there should be a NextSTL development corporation.

Also, in this particular ward, it is my understanding that there are no tax credits, because the councilperson (Kennedy) doesn't want to see these places rehabbed. So anything that makes redevelopment and gentrification more possible in his ward is a win in my book.

urban_dilettante · PostApr 26, 2017#72017-04-26T16:44+00:00

bwcrow1s wrote: ↑
Apr 26, 2017
I've been looking into some of the smaller LRA properties as well -- does anyone know if you're able to apply 203k FHA loans to wrap in renovation costs? Or do they only apply to HUD properties? I'd love to have one of these properties rehabbed for when I'm done with the rental market, but lack 100k-200k in assets to make it happen. Also assuming that most banks would never loan that amount of money on a rehab property without a wild interest rate, yes?

The 203K loans are made for wrapping in renovation costs. My husband and I are using a 203K loan to purchase/rehab a house in Dutchtown. This one happens to be a HUD property but I don't think it's a requirement. You find a contractor and have him/her put together a bid for the work you want to do with the construction part of the loan, and then the lender appraises the house taking that work into account and if it appraises favorably you get the loan (provided you have income, good credit, etc.)

bwcrow1s · PostApr 26, 2017#82017-04-26T16:47+00:00

urban_dilettante wrote: ↑
Apr 26, 2017

bwcrow1s wrote: ↑
Apr 26, 2017
I've been looking into some of the smaller LRA properties as well -- does anyone know if you're able to apply 203k FHA loans to wrap in renovation costs? Or do they only apply to HUD properties? I'd love to have one of these properties rehabbed for when I'm done with the rental market, but lack 100k-200k in assets to make it happen. Also assuming that most banks would never loan that amount of money on a rehab property without a wild interest rate, yes?
The 203K loans are made for wrapping in renovation costs. My husband and I are using a 203K loan to purchase/rehab a house in Dutchtown. This one happens to be a HUD property but I don't think it's a requirement. You find a contractor and have him/her put together a bid for the work you want to do with the construction part of the loan, and then the lender appraises the house taking that work into account and if it appraises favorably you get the loan (provided you have income, good credit, etc.)

Thanks for the info. I've tried to have the bit about LRA vs HUD clarified for me, and no one seems to be able to give me a definitive answer..

urban_dilettante · PostApr 26, 2017#92017-04-26T17:15+00:00

bwcrow1s wrote: ↑
Apr 26, 2017

urban_dilettante wrote: ↑
Apr 26, 2017

bwcrow1s wrote: ↑
Apr 26, 2017
I've been looking into some of the smaller LRA properties as well -- does anyone know if you're able to apply 203k FHA loans to wrap in renovation costs? Or do they only apply to HUD properties? I'd love to have one of these properties rehabbed for when I'm done with the rental market, but lack 100k-200k in assets to make it happen. Also assuming that most banks would never loan that amount of money on a rehab property without a wild interest rate, yes?
The 203K loans are made for wrapping in renovation costs. My husband and I are using a 203K loan to purchase/rehab a house in Dutchtown. This one happens to be a HUD property but I don't think it's a requirement. You find a contractor and have him/her put together a bid for the work you want to do with the construction part of the loan, and then the lender appraises the house taking that work into account and if it appraises favorably you get the loan (provided you have income, good credit, etc.)
Thanks for the info. I've tried to have the bit about LRA vs HUD clarified for me, and no one seems to be able to give me a definitive answer..

Well, all I know is that LRA = city owned, HUD = government owned, and HUD = a huge pain in the ass.

Lots of hoops to jump through when buying from HUD.