• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Celebrating Financial Freedom

THE Christian Personal Finance Blog

ARE YOU READY TO PROSPER? GET UPDATES
  • Home
  • Blog
  • Get Started
  • ToolsYou Need to Succeed
  • CoursesThe Divine Art of Money
  • Budgeting
    • Budgeting Worksheets
    • Premium Worksheets
  • Hot Topics
    • How to Get Out of Debt
    • How to Start Investing
    • Manage Money Better
    • Biblical Wealth and Prosperity
    • Real Estate Investing
    • Money Making Ideas
    • Credit Cards
    • Giving
    • Living Paycheck to Paycheck
    • Marriage and Money
    • Money Behavior, Mindset, and Habits
    • How to Make a Life Plan
    • Desperation and Hope
  • Start a Blog6 Easy Steps
  • About Us
You are here: Home / Investing / I Bought a House! (Part 2)- Inspection and Estimates

I Bought a House! (Part 2)- Inspection and Estimates

By Jason Cabler on February 16, 2012 15

11 shares
  • Share
  • Tweet
I Bought a House! (Part 2)- Inspection and Estimates

Welcome to my ongoing saga.  In the first “I Bought a House” installment I told you about my disaffection with my stock market investments and why and how I recently bought my first investment house with cash.  In today’s second installment I’ll deal with the process of finding out if there are any major issues with the house and getting estimates for repairs and renovations.

I Hired a Home Inspector

So to continue, now that I’ve put down refundable earnest money, it’s time to find out what kind of shape this place is really in and how much money and time it’s going to cost to fix it up.  By doing this I can determine if there will be enough room to make money after renovations if I decide to sell it, or maximize the potential rental rate if I decide to rent it out.

The first thing I did, and that anyone should do before buying a house, is to hire an inspector.  Hiring a home inspector is extremely important because it helps you make sure that you know exactly what you’re getting yourself into.  If you don’t, you can end up knee deep in a big mess that you may not be able to work yourself out of financially.  Getting a home inspection is like getting insurance against the unexpected.

 The Inspection

My realtor recommended Mike, an inspector she had worked with for years and whom she trusted.  I met Mike at the house and followed him around as he went over the place with a fine toothed comb.  He pointed out every issue and wrote a detailed report that he emailed to me a few days later.  He found no major issues and several minor ones that were easily fixable.

No deal breakers here!

Repairs and Expenses

So with that information I began to make a list of all the repairs and upgrades that were needed and began calling contractors to get estimates for the work.  My guess was that it would take $10,000 to $12,000 to get the place in shape, but guesswork doesn’t cut it, especially when you’re inexperienced at this like I am.

So over the next week or so I met with contractors at the house and got estimates as follows.

Joey- Paint interior, fix post on front porch, drywall repairs, power wash siding and deck.  Estimate:  $2175

Billy- Demolish outbuilding and haul away debris.  Estimate:  $2,000

Jeff-  Replace 6 old windows and trim, clean gutters, install gutter guards.  Estimate:  $2,680

Jamie-  Fix deck (materials and labor).  Estimate: $1,000

So the total estimates from all the contractors came to just over $8,200.  I also estimated about $1,500 for general repair that I would do myself and tacked on another 15% to the total in case of any surprises to get a good feel for how much it would take to do the job.

The total estimate including 15% surprise expenses came to $11,155.

So after all is said and done I would have invested about $54,000 after closing costs if I chose to proceed with the purchase.

Will this house be worth more than that when it’s finished?

I handed over the check for $43,418 with a pit in my stomach- Is this house flip worth it?

Is Rehabbing This House Worth It?

According to comparable sales in the area, I think I should be able to get $70,000 to $80,000 for it if I decide to sell, or about $800-$900 per month rent if I decide to go that route.

Barring any major problems, I decided that those were numbers that would work for me.  After processing all this information for a few days, praying over it, and trying to get past the reluctance of spending a lot of cash on something I’ve never tried before, I called my realtor Sherril and told her that we’ll go ahead with the deal.

We made the appointment with the title company and signed the papers on a Friday.  On the way to the closing I first went to the bank and got a cashier’s check for $43,418 (House + Closing costs, title insurance, etc.), then to my insurance agent to take out insurance on the house ($426 for the first year).

Oh God, that’s the largest check I’ve ever written!

I’d be lying if I said there wasn’t a pit in my stomach as I handed it over at the closing table.  But hey, when you take a leap of faith into the unknown it’s never easy, but there is always a payoff.

Expenses For The House So Far

So to recap today’s post, I’ve spent $275 for an inspection, and $43,418 for the house plus closing costs for a total of $43,693.

Stay tuned for next Thursday’s post when I dive into my weird and funny experience with my demolition contractor and how I managed to dodge a bullet when dealing with him.

‘Till next week!

Read the rest of my house flipping series here

Is Buying a Home a Good Investment?

My Series on Investing in a Rental House

Primary Sidebar

What are you looking for?

Follow Us!

Follow Us on FacebookFollow Us on TwitterFollow Us on LinkedInFollow Us on PinterestFollow Us on YouTube

Welcome to CFF

Sidebar- Divine Art of Money

Visit Our Etsy Shop

Premium Finance Worksheets
Rakuten
How to start a blog in 6 easy steps
How to budget book

How to Get Out of Debt- The Ultimate Plan for Getting Out of Debt Even if You Have No Money

The Ultimate List of Money Saving Tips So You Can Save More Money on Everything!

How to Start a Blog in 6 Easy Steps- The Best Tutorial

The "How to Make Your Own Life Plan" Series

The "Ten Commandments For Making Money" Series

The "Money Making Ideas" Series

Welcome to CFF!

Thrive Live free event ziglar family mark timm
Ziprecruiter find a job search
Follow Us on FacebookFollow Us on Google+Follow Us on TwitterFollow Us on LinkedInFollow Us on PinterestFollow Us on YouTubeFollow Us on Instagram
Time to Get Out of Debt-

Check Out My Budgeting Book

Got a Question- Ask Jason

how to start a wordpress blog easy steps

Featured

The "How Do You Get Out of Debt?" Series

21 Things You Can Do Today to Set Up Your Finances For Massive Success

13 Ways to Save Money on a Low Income

Should You Tithe While Getting Out of Debt?

Should You Buy or Rent, Which is Better?

How to Start a Blog- All The Steps You Need to Start Your Own Wordpress Blog

The "How to Make Your Own Life Plan" Series

The "Ten Commandments For Making Money" Series

The "Money Making Ideas" Series

Living Paycheck to Paycheck?  How You Can Get Ahead

How to Budget...

WHAT ARE YOU LOOKING FOR?

  • Home
  • Blog
  • Get Started
  • Tools
  • Courses
  • Budgeting
  • Hot Topics
  • Start a Blog
  • About Us

Copyright © 2011-2021 · All Rights Reserved · Celebrating Financial Freedom | Privacy/Disclaimer | Affiliate Disclaimer | Terms of Use | DMCA Policy

Copyright © 2022 · Smart Passive Income Pro on Genesis Framework · WordPress · Log in

11 shares