I just put in an offer on a house....

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yoshhash's picture
yoshhash
Status: Martenson Brigade Member (Offline)
Joined: Sep 20 2008
Posts: 271
I just put in an offer on a house....

Despite the general trend to head for the hills, I did quite the opposite, but it wasn't just any house:

It is a 5 bedroom house in Windsor Ontario, walking distance from the university (not a bad neighbourhood)- for $39k. Cash offer, no mortgage. Because of the depressed automotive sector, the house prices have almost bottomed out- though clearly not as extreme as Detroit. It is our first house.

I am a builder/architect, and my plan is to buy up even more of these bargain basement houses eventually, fix them and rent them out. While I am feeling confident about this (this is the epitomy of "trust myself") I welcome any comments, even ones that tell me that I'm crazy- but would like you then to follow up with the reasoning behind it.

Clearly, I believe that the Canadian situation will not be as bad as the American or most of the world. I believe that things will get much worse before they get better, but I do believe that good will come out of this mess. And the first example of that good is home prices dropping to a more equitable level and allowing guys like me to come in and buy them outright.

so.......am I crazy?

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: I just put in an offer on a house....

Sweat equity has worked for a lot of people. That price for a house near a university would be unheard of in the States unless it was next to a pig farm.

If you've got the fix-up skills, go for it.

Don't buy too many at once, though, IMHO.

 

SG

Ready's picture
Ready
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Joined: Dec 30 2008
Posts: 917
Re: I just put in an offer on a house....

Yosh,

My first house was an older, larger home (as I suspect yours is based on the price). It was awesome for my wife and me as a first home, but looking back on it, it was a huge money pit. More accurately, it was the biggest project I ever had. I spent every night and weekend working on it for a couple of years, as there was always something needing doin'.

With your background, you probably know far more about this than I did when I first bought, so I'm sure you have it handled. There is no way that I would want to enter into that type of servitude to my home right now (again, your situation may be very different) because it would take away from my focus of preparing, including gardening, poultry, food preservation, etc. etc. etc.

As far as the price, location, community, only you can decide if that works for you! Canada has a better outlook than the US, but you also have to look at the fact that it is across the bridge from one of the USA's worst cities. I hope we don't "contaminate" you!

Hopefully you got a nice chunk of ground with this property, and can grow a nice patch for yourself.

Cheers and congrats,

Rog

gregroberts's picture
gregroberts
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Joined: Oct 6 2008
Posts: 1024
Re: I just put in an offer on a house....

"More accurately, it was the biggest project I ever had. I spent every night and weekend working on it for a couple of years, as there was always something needing doin'."

A man's home is his hassle. ;-) 

Ed Archer's picture
Ed Archer
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Joined: Oct 12 2008
Posts: 225
Re: I just put in an offer on a house....

Need a roomate? :)

grl's picture
grl
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Joined: Nov 30 2008
Posts: 188
Re: I just put in an offer on a house....
yoshhash wrote:

Despite the general trend to head for the hills, I did quite the opposite, but it wasn't just any house:

It is a 5 bedroom house in Windsor Ontario, walking distance from the university (not a bad neighbourhood)- for $39k. Cash offer, no mortgage. Because of the depressed automotive sector, the house prices have almost bottomed out- though clearly not as extreme as Detroit. It is our first house.

I am a builder/architect, and my plan is to buy up even more of these bargain basement houses eventually, fix them and rent them out. While I am feeling confident about this (this is the epitomy of "trust myself") I welcome any comments, even ones that tell me that I'm crazy- but would like you then to follow up with the reasoning behind it.

Clearly, I believe that the Canadian situation will not be as bad as the American or most of the world. I believe that things will get much worse before they get better, but I do believe that good will come out of this mess. And the first example of that good is home prices dropping to a more equitable level and allowing guys like me to come in and buy them outright.

so.......am I crazy?

crazy?

Absolutely not! I would say that is a very smart move if you get it for what .... $39K?

Please let us know how the offer went. If you can buy such a house for ~$40k, I will deal with the chill and move to Ontario!

 

Ragnar_Danneskjold's picture
Ragnar_Danneskjold
Status: Silver Member (Offline)
Joined: Feb 23 2009
Posts: 100
Re: I just put in an offer on a house....
Lisa G wrote:

If you can buy such a house for ~$40k, I will deal with the chill and move to Ontario!

You usually need to deal with more than the chill.  We've had some foreclosed houses going for about the same, but they're in a bad part of town.  And Windsor is right across the river from Detroit, where houses sold for $7500 on average this past December. 

 

chris_m's picture
chris_m
Status: Bronze Member (Offline)
Joined: Feb 7 2009
Posts: 36
Re: I just put in an offer on a house....

Cash deal on a 40k house.  Well done in my books.

Like what has been said. Just don't over borrow.  It may be some time before you see a return on your investment after property taxes etc....etc. & interest rates will rise in the future.

Also keep an eye on the neighborhood.  You don't want to be the only rose in a sea of weeds.  If there are too many foreclosures & houses end up rundown,vandalized or worse (unfavorable elements) then you could be 'stuck' with an empty house.  Are you going to live in it while you fix it up?  otherwise....Keep your place looking lived in.  Cut the grass & rotate lights on a timer.  Put up window shades if the house is empty.

yoshhash's picture
yoshhash
Status: Martenson Brigade Member (Offline)
Joined: Sep 20 2008
Posts: 271
Re: I just put in an offer on a house....

well, they accepted the deal, so we are the proud owners of a 5 bedroom house! 

Windsor is really a far cry from Detroit.  Yes, it is depressed, but there is no crime problem, vandalism, looting of houses.  There are even cheaper houses- we saw a bunch between 26k and 30k, which weren't all that bad, but definitely in the bad part of town (ours is not in a rich neighbourhood by any stretch, but still not what you would call bad).  Even the worst parts of the city, however, are bad only because they are so deserted and boarded up.  If they were bought up en masse (and properly cared for), the problem would be solved.

 Seriously, if any of you are self employed and in the market, I would highly recommend it.

We take possession in one month- hope to get a quick tidy-up in to rent out rooms 2 weeks following. 

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: I just put in an offer on a house....

Congratulations and good luck, homeowner! (I disagree with Chris about this. No @@#$#%@ landlord is going to show up at my home unannounced and ask to check the plumbing or some BS).

Let us know how it unfolds.

 

SG

fxfarms's picture
fxfarms
Status: Member (Offline)
Joined: Feb 22 2009
Posts: 10
Re: I just put in an offer on a house....

I personally think you did a smart thing. Canada's government is highly linked to commodities and as long as fiat currencies are falling, which they are and will continue, then commodities will inevitably rise. It's a cycle.

Therefore, you're right that Canada will be much easily be able to rebound from the current situation(s). Nonetheless, just be careful. You picked up a great deal, continue looking for others, but I would not purchase homes in "rough" areas. Because, more than likely, your tenants are not going to give the house much respect and you'll find yourself putting a lot of money into the rental property.

Suffice it to say, I think you've done a good job.

yoshhash's picture
yoshhash
Status: Martenson Brigade Member (Offline)
Joined: Sep 20 2008
Posts: 271
Re: I just put in an offer on a house....

slight correction.....I was mistaken about it being a 5 bedroom.  It is only 3.  I guess in our frantic excitement we got our wires crossed.  I also discovered some dicey businesses nearby.   However, it is a huge house, building inspection was positive, neighbourhood was even nicer than we remembered it, except for these 2 establishments I just mentioned.  Thank you all for your comments, I am always going to be watching for other such deals, but will be careful not to overextend myself.  We take possession in 2.5 weeks.  I also have an informal job offer already.

I just read this over, I realize I sound like I'm bragging....I don't mean to, this isn't my nature!  I'm just delirious with excitement. 

bigpicture's picture
bigpicture
Status: Member (Offline)
Joined: Sep 14 2008
Posts: 3
Re: I just put in an offer on a house....

Good move, especially near the University. Keep cash aside as future deals will continue to present themselves. What is the going rate for rent per room for University student housing?

yoshhash's picture
yoshhash
Status: Martenson Brigade Member (Offline)
Joined: Sep 20 2008
Posts: 271
Re: I just put in an offer on a house....

thanks bp- yes, we're still riding an adrenaline high, just now having caught up on urgent repairs, now we can start talking about taking in tenants, and finding a real job (a whole other issue, will post as it develops.  Unemployment is indeed widespread around here.  I plan to start my own business).  We also have small vegetable garden.

The "going rate" seems to start at about $350 for a room with shared facilities right by the University.  We are 12 blocks from the actual campus though, so we may have to drop the price a bit or throw in some other incentive. 

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