How do you handle paying for a big remodel?
In this case, the buyers bought the home with FHA financing and used their cash for the remodel, which included all new plumbing and electrical too:
In the end, you get a new house with huge yard and no fees!
Here are the “before” photos from the first day we saw it:
Seems like a pretty decent idea in today’s market. If you wanted to work the numbers I’d guess you say 1.75% for Up Front FHA MIP + 1.25% Annual MIP (of the purchase price) until you appraise for 78% LTV. So if you assume you’ll appraise for 78% LTV in 5 years then you’d want a minimum of 1.75 + (5*1.25) = 8% discount to the turn key ready assuming you’d do the 20% conforming mortgage.
Agreed, and with a little boost in values the appraisal should be easier. We’ll see, they are refinancing now to get out of the $500/mo MIP, and just need a $625,000 appraisal, which should be doable.
That is a really nice remodel. What was the budget for something like that? Maybe as a follow-up post you could highlight the builder and what was involved with something like that? Was there an architect, decorator, or just a good builder/contractor with a good staff? What was the time line from closing to move in?
I am starting to lean in this “fixer” direction. I have lived in two different rental houses that were built during the boom in San Elijo (yb 2004) and Bressi (yb 2006) and the quality of these “new” homes are extremely low. However, the owner’s paid premium pricing. A friend of mine commented that “These are 15 year homes with a 30 year mortgage”. My complaints with these track homes are:
* They had inefficient floor plans
* Extremely poor insulation and poorly designed central HVAC (some rooms need space heaters / fans while others rooms are 10 degrees warmer / cooler)
* The appliances and fixtures started to break at about the 4 year mark (faucets replaced, refrigerator replaced, microwaved replaced)
* The cabinets were the cheapest of the cheap. There are two screws holding on the drawer facing, zero strength & stability, poor durability. Ikea cabinets would have been better and probably cheaper. I regularly snag my shorts on the cabinet drawers and the whole front with just rip off. Cheap, cheap, cheap!
* The second floor is paper thin and you can hear your guest’s “bathroom noises” on the first floor. A tap of the foot in my 2nd floor office and it sounds like I am playing drums on the second floor.
* I could go on…..
Beautiful home…nice selection of materials, the 60’s ranch house conversion to the modern contemporary style works well. The remod certainly had a heft price tag.
Speaking of numbers…this home was purchased 8 months ago, for $760k 8 mos ago something purchased in CV 2500sq ft or 92129 3000+sq ft, would have appreciated much better. Would not have gotten the gorgeous lot though.
Looks great — love the totally open kitchen / great room!
Looks awesome…thanks for sharing that with us Jim! Most people can’t visualize something like this when they looking at a house that needs redone.
After showing this video to my wife, I realized that many of the questions I was asking above were actually answered in the last 10 seconds of the video.