It took a long time to land my first deal. Probably 10 months of active searching, and several years before that casually feeling around the market and the renovation business. My criteria was:
Not far from my home in Malden, Massachusetts - I have a family who I have responsibilities to, and enjoy spending time with
Reasonably favorable numbers - Purchase Price + Conservative Renovation Estimates <= Expected Sale Price
A smart renovation (as opposed to a knock-down) could result in a beautiful home with a Greatly (with a capital G) improved energy consumption footprint.
In October, I finally found the right place. The home was built in 1890. It’s a 1800 sf single family in a charming, high-value neighborhood north of Boston. 3 bedrooms with 1.5 bathrooms. The walls/ceilings/floors/windows are in rough shape. It smells like the dog that lived there before I bought it. The Brady Bunch would have made fun of the dated kitchen. The layout was very funky, as it had once been a 2 family with 2 (crappy) staircases and awkward dividing walls. None of the systems worked and knob & tube was everywhere. The owner understood the problems with the home, and wanted to move before the winter freeze. PERFECT! A blank canvas! I made a cash offer on the day I saw it at the price he was asking, and ended up getting it for $40K less than that due to a property line misunderstanding.
My big idea is to fix the layout, reclaim poorly used space, gut & redo the interior, dormer the roof to add a bedroom, add an ensuite bathroom to a master bedroom, insulate the ba-jesus out of it, maybe finish the basement, install efficient heat pumps and on-demand water heating. If all goes well, I might sell it for twice what I bought it for. The renovation initially looked like it would cost 250K, but a lot of that was a mildly-educated wild guess. The only way to know for sure, was to try. The worst that can happen, I figure, is that I pay more for the renovation than I budget and lose money, but gain an education. Let’s do this.