House in our neighborhood for sale

[jp1]

Yesterday one of the units in our townhouse development went on market at virtually the same price we paid ($725k vs. $727k that we paid). It's 300 square feet smaller and one less bathroom, but otherwise quite similar. Since I have a contractor I like currently working for us, and am paying, he and I went to the open house today with an eye towards what would need to be done if I were to buy it as an investment. The kitchen and upstairs bath are both original with crappy cheap builder grade wood cabinets and a bizarrely ugly tile kitchen counter. That would be $100k work right off the bat. All the cheap quick fixes have been done. New floors, updated outside areas, etc. The realtor is being aggressive. She is asking for "best and final" offers by next tuesday. I won't be submitting one because the cash flow for turning it into a rental just doesn't make sense. It will be interesting to see what it ultimately sells for.

https://www.realtor.com/realestateandhomes-detail/M2342653395

[iris lilies]

it is a happy and bright space, it’s so California – bright – sunny. I think the flooring choice is unfortunate. I don’t hate the kitchen even the ceramic tile countertops, but I know most people wouldn’t put up with it. I certainly don’t want to clean the grout, yuck.

the outdoor space is nice. Does that entire double garage go with the unit? That’s a huge garage. The exterior is uninteresting, it is garage and fence and a little bit of a second story. But man I love those big black double front doors they are substantial, they make a statement.

Today I was looking at real estate in Las Cruces and I saw this condo in an area I really like. I have always liked this condo complex. It reminds me a little bit of the unit you’re showing only look at the price difference.



https://www.realtor.com/realestateandhomes-detail/905-Conway-Ave_Las-Cruces_NM_88005_M97785-66364?from=srp-list-card

[ToomuchStuff]

No decent picture of the front, and down below, makes it look like that wall was put there to keep peoples cars from going off the street and into the front door.

[pinkytoe]

I would be concerned about the sloped land (it appears as such) behind the unit. Drainage, etc.

[jp1]

The outdoor space IS nice. And I know from experience that's the easiest space to upgrade.

The garage is all for that unit. I wish ours was off to the side like this one. The living room is much brighter as a result. Our garage is directly in front of our unit. I hate that but accepted it as the cost of getting an otherwise lovely place. The wall around the front porch is more an effort to hide the ghetto development across the road. Those townhouses are all densely packed together and have car ports instead of garages. And I agree that the super narrow master bedroom balcony is silly. Ours is much bigger but we never use it.

The front door is actually interesting. We'd looked at a unit in this development that had the same layout as this place. Only one front door opened. The other was fake. In this unit they both open so the owners spent money making that happen. Much nicer. We only have one front door, which is fine.

After we'd looked at it contractor asked "would you be moving there" and I was like "uuuuuhhhh no. Our place is bigger, and now it's nicer." And then I started crunching the numbers out loud and by the time we got back to my house I was like "we won't be buying this place. don't waste any time figuring out total cost of the renovations we discussed." The cash flow of this house as a rental was almost $800/month negative once it was upgraded. And the sale price if we were to flip it was also negative unless our neighborhood has just had a big bump in value. But without this place selling for near asking as it is now the neighborhood isn't worth that much.

[jp1]

I would be concerned about the sloped land (it appears as such) behind the unit. Drainage, etc.

We were too when we bought since we face that same hill in the back. It's turned out not to be an issue. Six months before we bought our unit it and the ones on both sides of us flooded so the HOA invested in a concrete drainage ditch and sump pumps and even in the worst storms (15 inches in 3 days was probably the worst) our backyard hasn't even come close to flooding.

[jp1]

These are pics of the view of across the street from the for sale unit and secondly of the unit itself.

5782
5783

[catherine]

I have a hard time imagining that updating a couple of cabinets and replacing the tile countertop would cost $100k but that's how out of touch I am. I think that place is a showplace! (It helps that it has been staged beautifully). I'm shocked that it would be that much. And would renters really care? Yes, the tile countertop is a pain to clean and certainly not in style compared with granite or even quartz, so that should probably be replaced, but that would probably be--$5k? And you wouldn't need custom cabinetry for the bathroom, right? Home Depot and Lowe's sell good quality cabinets. Would you have to replace the sink/bath/toilet, too?

In any case, it sounds like a risky move to take it on as an investment.

[Rogar]

A relative recently redid his kitchen with high end cabinets and granite counter tops for around $30K, although I'm sure the cost varies by region and who you can find to do the work. If I were doing things as a rental I'd be tempted to look into cabinet refinishing rather than replacement, but the tile countertops would have to go. Otherwise it looks like a very nice place. The all white interior paint is pretty sterile by my preferences, but it's a personal thing.

[iris lilies]

A relative recently redid his kitchen with high end cabinets and granite counter tops for around $30K, although I'm sure the cost varies by region and who you can find to do the work. If I were doing things as a rental I'd be tempted to look into cabinet refinishing rather than replacement, but the tile countertops would have to go. Otherwise it looks like a very nice place. The all white interior paint is pretty sterile by my preferences, but it's a personal thing.

My condo’s kitchen renovation, a tiny kitchen, was around $22,000 but it had custom cabinets, high end marble counter and backsplash and expensive small appliances with DH doing all demolition, cabinet installation, and tile work.

Our Hermann kitchen was around $35,000 with higher end factory cabinets ( they go to the ceiling) dishwasher with panel, granite counters, marble backsplash, semi-expensive stove. Again, DH installed cabinets and tile. But this is in no way a “luxury” kitchen.

I was disappointed to see how they cheaped out in my old family house, newly renovated. Kitchen cabinets are short and stubby in that tall room. The proportion is awful.

[iris lilies]

I was just thinking about the stoves we bought during our frugal years. Our stoves were so cheap they didn’t even have a light in the oven. Ha, but I didn’t care. I was perfectly fine with that.

so now I buy expensive stoves ($5,000 ish) for their color, not performance. But I think of Aga stoves that start at what, $30,000? And go up from there. Compared to that my stoves are still reasonable in price.

[iris lilies]

For income property, an easy rule of thumb is 1% percent to 2%. Here’s what that means:

You should be able to get a monthly rent that is 1% of the total purchase price.

The people over at Mr. Money Mustache say that properties in the 2% range are practically impossible to find anymore. 1% properties can be found. I like this rule and I look at it often when I’m looking at real estate, not that I ever want to be a landlord because I don’t, but I think it’s a great rule of thumb to weed out most properties that will not cash flow for income.

Another bit of wisdom is that in flyover country, you’re not going to make money on appreciation, so you better make money on monthly cash flow. But on the coasts you may not make money in monthly rent, but appreciation might be where the value lies.

[catherine]

I was going to say that back in 2007, I think the cost to renovate my MILs kitchen when she moved to NJ was about 20-25k. I went to Home Depot and used their designer to lay it out, and purchased the factory cabinets through them and hired our own carpenter to install them. We bought mid-grade appliances. Quartz countertops. My "splurge" was bamboo flooring and Susan Jablon backsplash tiles. Of course I would expect that my costs would have inflated to the 30-35k range by now.

[chrisgermany]

Sorry wrong post.

[chrisgermany]

Wow, I had family in your town and have so many happy memories.
But the fence is so close to the windows. Is there a garden at all?

[pinkytoe]

Five years ago, our kitchen was around $12,000. New wood floors, some electrical upgrades, RTA cabinets, sink and hardware and stone counters. We did the painting, cabinet and backsplash tile installation ourselves. DIY saved us a lot of labor costs.

[jp1]

Yeah, if we were going the income property route we'd probably just replace the bathroom vanity and kitchen counter. Maybe $10k including having them installed. If we were going to try to flip it we'd do full renos on the bath and kitchen, closer to $100k. But neither make sense financially so instead we'll hope that someone buys to live in it and spends the money to up grade the bath and kitchen nicely and then perhaps sells a few years down the road profitably, providing a nice comp over $800k, which is currently the highest price anyone's ever gotten in our development.

Regarding the yard, yes it's small. Other than the small astroturf section it's all deck area. If one wants they can use the HOA space beyond the fence for gardening. That's what we do. This place doesn't have a gate because the fence is actually a retaining wall (we have a gate out of our backyard) so they would have to build a staircase to get out of the backyard (or climb the fence...)

[jp1]

Five years ago, our kitchen was around $12,000. New wood floors, some electrical upgrades, RTA cabinets, sink and hardware and stone counters. We did the painting, cabinet and backsplash tile installation ourselves. DIY saved us a lot of labor costs.

Yeah, labor is probably 2/3 of the cost of a renovation, at least in my experience. I'm ok with that since really the last thing I want to do is spend months of evenings doing projects and living with a mess the whole time. Plus our contractor does an amazing job of just making everything look great where if we did it ourselves we'd struggle to make it look at least competent because we just don't have the skills.

[rosarugosa]

If another data point is helpful, our kitchen cost just a hair under $47K when all is said and done. That included: gutting (then the surprise that subfloor needed to be removed to the joists and rebuilt), hardwood floor installation (we had the flooring material already from a prior project), blueboard, plaster and painting, complete electrical rewiring and installation of recessed lights, garbage disposal and range hood, tile backsplash, granite countertops, cabinetry and installation, new stove, fridge, range hood, sink, faucet, disposal, replacement of radiator, replacement of 2 solid wooden doors.
The first two contractor quotes I got were for $40K and $48K, and did not include cabinetry, appliances, fixtures, radiator, nor of course the subfloor surprise.

[iris lilies]

If another data point is helpful, our kitchen cost just a hair under $47K when all is said and done. That included: gutting (then the surprise that subfloor needed to be removed to the joists and rebuilt), hardwood floor installation (we had the flooring material already from a prior project), blueboard, plaster and painting, complete electrical rewiring and installation of recessed lights, garbage disposal and range hood, tile backsplash, granite countertops, cabinetry and installation, new stove, fridge, range hood, sink, faucet, disposal, replacement of radiator, replacement of 2 solid wooden doors.
The first two contractor quotes I got were for $40K and $48K, and did not include cabinetry, appliances, fixtures, radiator, nor of course the subfloor surprise.

I didn’t include the building, cost of electric, plumbing, drywall, and flooring, in our Hermann house, because all of that was happening throughout the entire house.

[littlebittybobby]

okay-----that sounds like a giveaway price! is it a stigmatized property, perhaps the scene of a mass murder where the victims weren't found for months? but yeah---if i did not have a full plate of projects and lucrative side hustles, i'd snap that one up in a heartbeat, hire an architect to take the design in a new direction, and hire a contractor and give them carte blanche do do as they see fit. hope that helps you some. gotta go now, and put casters on my nice new used surplus file cabinet. thankk mee.

[jp1]

So the house I mentioned at the beginning of this thread closed last week at the full asking price of $730k. That's good news if/when we decide to sell. That's $3k more than we paid 3 1/2 years ago for a 300 sq foot smaller place with one less bathroom and no updates other than flooring. And no A/C. Our place has an updated kitchen and two updated bathrooms out of three. Even at the same price per square foot and not accounting for our upgrades that would make our place worth $880k.