One Man's Scary Mess is another's College Fund

Well, for starters, you could ask an informed Realtor.  Typically, a Realtor could do a little research and tell you what similar homes have sold for in this or that neighborhood, what neighboring homes might be in contract at what price and what nearby homes on the market are listed for.

Not just any homes though, you have to be smart about such things. Look at the real numbers, look into the numbers and talk about the market. Ask Questions. Don’t take your Realtor’s word for it. Trust your instincts to a degree.

How much work does it need? Can you do the work? Do you have people you know who could do the work? Can you live in the house in its current condition? How long would you live there? Would you rent it or sell it when you leave for your next house? Are you considering flipping this house? What is your life situation, where will you be in 3-5 years?

Let’s take a look at  this house listed at $149,900 at 1189 Hunter Ave in the Short North area.  It’s about 8 homes south of 5th Avenue, it’s not my listing, it’s across the street from the city’s aquatic center and Thompson Rec Center and a quick walk to all the Short North Hoopla available on High Street in the Long North.

That price at that location has drawn lots of visits but, last I heard from the listing agent, no offers.  It came on the market last August listed at $234,900 and has dropped somewhere between $10K and $19K every month.  It sold for $181,000 in March of 2006.  It needs work.  Depending on your needs and tastes, anywhere from minimal work to make it livable to weeks worth of renovation.

When you buy a foreclosure, there are a lot of unknowns.  These unknowns typically add up to an expensive laundry list of items to be fixed. Tack that on to your already knowns–this house could use some bathroom fixtures, some drywall work, all appliances, a new AC compressor to replace the one that was stolen and a paint job on the outside, to name a few.

Walk around it, walk through it, it feels quick and shoddy. It probably won’t come crashing down around you, but it’s not the level of workmanship you would hope for. It’s also listed at $149,000. It’s bank owned and the bank wants to sell it. Do you think there’s some built in equity there with the potential for renting later? I do. Add on $8,000 in Stimulus money for first time buyers and various other buyer program help and you may have a winner in a neighborhood that you thought you couldn’t afford the first time around.

Added Bonus — The Dairy Family has a great beer selection just down the street and the proprietor tells me he’ll order whatever you like.