How do you know they didn't invest a significant amount to fix issues? What they paid for it isn't a useful measure if you don't know the condition it was in.
Comparable sales prices for recently sold similar homes would seem a better measure.
I'm genuinely curious - why did he do all the repairs in his house before selling it? Was the market for housing that bad that he couldn't sell it as-is for the new owner to do repairs?
That’s why I just went ahead and fixed the issues my house had — I assumed any other new home would have similar issues, and I couldn’t sell the place without remediating them anyway. I had expected to recoup at least some of the cost though.
There was a house for sale close to where I live. It was at a fairly comfortable price, a normal family could have potentially gotten a normal mortgage for it and paid it over time, eventually owning it. It was a modestly sized house, perhaps around 70-80m² enough for a couple with one kid and a dog. It needed some repairs, not anything serious, but some work over time; and the homeowners could live in it, perhaps get some savings over the next 5-10 years before starting the costly repairs. I was hopeful. I did consider it, but I thought if I didn’t get it some other nice working class family could move into it.
Alas, no mortgage agency would loan for this property, there was no central heating system, and the roof was suboptimal. Only people that had $200k at hand could possibly consider it. And off course a cash offer came from a rich family who lived there for a week, did some renovations and sold it again for more then double the price, more then anything that a normal family could afford, even with a mortgage.
The author wasn't the original owner, the house was built years before they moved in. They purchased it for less than the original owner had paid to have it built, so it doesn't sound like they were stretching themselves too thin - they thought they were getting a good deal and would be able to deal with any issues that came up.
The fact that they own their own backhoe, and the pictures that they have shown, indicate that they have tried quite a lot of solutions, and as indicated in the article they are not interested in doing a full rebuild as it would not make financial sense, considering the depreciation of underground houses.
When I was new to house shopping my wife and I found this house we loved. It had intricate patterns of mixed woods in the hardwood, French doors closing off a super nice dining room with wainscotting, and this super cool mid century river stone fireplace.
We had made all these plans to renovate the upstairs which was all that was needed. Then the day of the sale came, we got massively outbid, it sold at a silly price. We figured whoever bought it loved it equally.
Nope, a year later it was back on the market. The dining room had been torn out to make the ground floor open plan, the hardwood was completely replaced with cheap grey vinyl floor boards, and the fireplace was replaced with a small dining area.
It was painful to look at was clearly a well finished house turned into a cheap looking listing on AirBnB.
I don't know very much about housing and construction, but this part set off a big red flag to me:
We should have been forewarned when we were able to purchase the house for $45,000 less than the cost to build it.
Yeah, that should have been a forewarning about everything. Someone else knew that the house was a lemon, and they managed to dump it off on this unfortunate buyer.
To be fair, they're making a tidy profit so they can afford to do some remodeling. They just can't tear it down and make a huge new house, which would trigger a reassessment.
I get that psychological aspect - it makes you think the current owners have poor judgment, and so what else did they mess up? That's also why you should do simple maintenance and cleaning when trying to sell a house, because if a person neglected to eg rake the leaves, who knows what else was necessary which they didn't do.
The house was originally built by a now famous architect. Over the years it had been extensively remodeled and was in poor shape. The city is using a dispute to force a private citizen to restore the building to its original state, even though it was far from that and not in good shape when he bought it.
Back in 1999, an acquaintance of mine bought a $2.3MM home in an exclusive neighborhood. As he was driving me and a few friends through his neighborhood, he explained that all the houses could be knocked down and rebuilt if desired. The price included location, security (theater really, but hey, it sells), footage, looks and fancy appliances. Not quality.
They didn't build it, they bought it 6 years old. But apparently they overlooked warning signs too at the time. It already had cracks and leaks, and was being sold $45K below construction price.
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