Went out today to take a look at this house with an investor client of mine. This is a newly updated foreclosure listing in Canal Winchester, OH, which is a suburb of Columbus, OH. He is always on the lookout for good project homes that are too nasty for the normal handy homeowner to want, but not needing any major renovation. He generally looks for foreclosure homes in Reynoldsburg, OH and East Columbus, OH. He likes projects that are close to his home in Pickerington.
Now the listing photos for this house were taken before July 2,2010, the date of the unfortunate event. I got there a bit earlier than my investor client, and I knew right away that this one was too much. He agreed when he arrived. We did a once around, peeked in the windows, and that was that. Another seasoned rehabber/investor arried soon after we did, who has more experience with fire-damage properties.
The "Before" looked very nice, which led alot of the investors to run out and go see it. Here are the actual photos:
Here's the back:
In the 3 minute conversation with him, I had two good takeaways:
1) This particular house is in the Lehman Estates subdivision, and is situated in Canal Winchester. The structural inspectors of certain suburban towns and villages tend to be very particular. In this case, they will require the rehabber to replace many of the beams and studs that are black and charred, but are still structurally sound and intact. They could be sanded down, and still be fine
2) (I knew this one, but had forgotten until I got there) With fire comes water, with that water, comes mold. (Turns out firefighters down blow-dry everything when they are finished putting out the fire. That mold can potentially add a significant amount to the rehab costs of this project, as some areas that were undamaged by the fire, now need to be completely gutted and replaced, due to mold damage.
3) ANY HOUSE WILL SELL FAST, AT THE RIGHT PRICE! When someone says, "My house won't sell, it must be this recessionary market...", show them this house: location=Okay, condtion=Horrendous, price=Attention-demanding. The agent on this listing said they had an solid offer within 12 hours.
My client will be passing on this. The other investor might as well. Even at $27,900 (Price was $117k before the fire), the rehab costs could be $80k or more. With the ARV (after repaired value, or market value) at about $120k, conservatively, those margins are too close for most rehabber investors. And there are almost always cost overruns with big projects like these.
Good luck and Godspeed to the person that gets this one. BUT, it will be good for the neighborhood, and the new buyers -- a freshly restored home in the Lehman Estates neighborhood.
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