Remodeling tradeoffs to flip foreclosures?
I see a lot of city-owned foreclosures for sale around 10-15k USD in my area of Wisconsin. It’s a fairly dense neighborhood with a lot of single family and duplexes from around 1900-1920. Those foreclosed houses sit unoccupied with green board over the windows until someone buys and remodels them. My thinking is this:
– Without worrying about getting to net-zero or solar-powered, they could be remodeled to be energy efficient
– I can made tradeoffs to choose durable materials and energy efficiency while keeping costs down.
– Buyers or renters aren’t going to prioritize energy efficiency, but if I bake it in to a remodeled house, I keep the neighborhood affordable (not gentrifying it) and I help lower-income families have more comfortable homes in our harsh winters. (When I was in college, a lot of my classmates shared stories of going through winters without heat due to bills, or without heat/hot water because of bad landlords — this is a story I’d like to reduce in my city.)
I’ve been talking it over with my wife, and I think we want to attempt one house like this at a time, in the next year or so. I’m not really doing it to earn a huge profit; and I have good working relationships with a local insulation contractor and HVAC contractors.
So the question becomes, if you had the above, and you were taking out a decent loan for remodeling on each property with intention to sell it around market value for a similar sized home (Let’s say I was aiming for selling in a neighborhood where duplexes are going for 220k and single families 160-250k), what materials would you choose? Given this is remodeling, what would you do to insulate?
here’s the rough tradeoffs I’ve made in my mind:
– Gut with as much with personal labor as I can accomplish myself. (Note: I work full time, so this won’t scale. But depending on how long my timeline is, this could help the cost.) A lot of these houses are a combination of plasterboard and drywall inside, so I’d want to take that all down to expose the wall cavities.
– Choose cellulose for attic and wall insulation.
– Go with basic house wrap on the outside, repair any wood that appears damaged. We’re not getting fancy here, and for most of these houses, it is probably that exterior rigid foam is overkill.
– One of the tradeoffs for rigid foam cost and building out walls would be instead to put in new windows. These won’t have the energy efficiency payoff, but since I’m not occupying, it comes down to: Are the windows open-able so they can let in a cool breeze? Do they look nice? Are they properly flashed? Old windows are great (my house has them still with storms) but there’d be a lot of labor cost in rebuilding old double-hungs.
– Go electric for kitchen appliances. Reduce the chance of fires and CO issues. People don’t like to cook on electric as much as gas, but I think getting some decent (but not high-end) Energy Star basic appliances is a good bet. Or don’t even bother with the kitchen appliances, depending on whether this is going to be a rental or not at the end.
– Vented gas furnace and gas water heater — yes, they’re still burning fuel. But these can be very efficient now, installer subcontractors are very familiar with them and running the vents, and gas cost is reasonable in Wisconsin compared to electric. The house envelope isn’t going to be super-insulated, but will be much better than before, so in a lot of cases, with a more efficient furnace, I’ll be able to downsize BTUs like I did on my own home. These houses will have old ducts, often falling apart, so they’ll get a full cleaning and mastic.
– Vent fans for bathrooms and ovens, but probably not an HRV/ERV. I don’t think we’ll be getting in to that level of air tightness with cellulose + house wrap. Broan makes very good stuff locally.
– Cheap but durable exterior finishes: vinyl siding and asphalt shingles. As much as I’d love to give everyone cement board siding and steel roof shingles, that’d probably be too expensive. The tradeoff here might be to make all trim and sills out of cement board / James Hardie board. These neighborhoods see a range of re-sided houses: everything from the original wood siding to vinyl and aluminum siding, to stucco and asbestos siding. I’d avoid the asbestos sided houses, but also I may choose houses that already have old/beat up vinyl siding in this scheme. The whole point is, a house with vinyl siding isn’t going to look out of place in these neighborhoods.
Some other thoughts about popular remodeling options I see here:
– No additions / etc. Maintain/rebuild existing porches to code. (Far more porches than decks in these dense neighborhoods.)
– Garages probably won’t get much love other than to match the house’s exterior finishes — most of them are detached on an alley.
– Depending on how old and inefficient the doors are, I’d probably go with cheap and efficient-enough Mastercraft steel doors, painted to match the house.
– Electrical, water and gas lines all brought up to code but nothing fancy and ideally, not ripping out everything if it can be avoided. If these houses are anything like mine, there might be galvanized water line that needs to be fully replaced by copper or PEX.
– These houses almost all have lead water pipes from the street to the water meter. My own house has this, and the cost to replace it is steep. So that’s one place I feel like I could be helping to create a healthier neighborhood but probably can’t, in the budget.
Anything I’m missing? How would you plan something like this?
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