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Possible Guest House/Rental Property


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#1 Juthro

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Posted 25 October 2018 - 04:23 PM

So, a property a few lots away from my house came on the market for relatively cheap.  It's 1.6 acre lot in a fairly private location at the end of a road.  It has a  driveway, and utilities (including well) already in place.    It is literally 2 lots away from my house on the other side of the main road.

 

The problem is there is a shit ton of garbage on the property, including the unfinished foundation for a split level house.  I'm at a loss as to how I would deal with the foundation, or if its still useable at all.  There are no obvious issues I have seen with it, but I haven't inspected it closely at all, and honestly construction isn't my field, so I don't know what I'm looking for.

 

There is also 1965 single wide mobile home that is gutted but still livable inside.  Its plumbing has been frozen and is all destroyed.  Water is scabbed into the place with hoses to supply one sink, and a washing machine, but it is not hooked to a septic system (sink and clothes washer drain to a dry well), there is an outhouse.  It has a working gas(NG)  furnace, and a gas range in the place, as well as electric.  It is currently being lived in.

 

There is also a derelict motor home on the property, I don't know the entire story about it, as far as what works and what doesn't.  But I assume very little works if anything, and its a big'n.  Its a 3 axle job that would require a big rig wrecker to move.

 

Garbage is free to dump here (its paid by taxes), and the scrap yard will take the RV, if the AC's (it's got two), the fridge and the black water tank are removed.  There is also some large pieces of structural scrap metal that would require some heavy equipment to remove, but mostly it could be loaded into a drop box, or the into the back of my pick up truck.

 

We think we could pick up the property for about $40k, and we are trying to decide if its worth all the work and headaches that will be attached, and we are also trying to estimate how much it will cost to clean it up....   Its location right next to our property makes it quite attractive.   That's harder to put a price on.

 

Its all a little overwhelming looking at it, and just typing this out helps me wrap my head around it some.

 

I would appreciate hearing any and all perspectives, and thoughts about my situation.


Edited by Juthro, 25 October 2018 - 04:24 PM.

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#2 PJammer24

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Posted 25 October 2018 - 04:39 PM

So, a property a few lots away from my house came on the market for relatively cheap.  It's 1.6 acre lot in a fairly private location at the end of a road.  It has a  driveway, and utilities (including well) already in place.    It is literally 2 lots away from my house on the other side of the main road.

 

The problem is there is a shit ton of garbage on the property, including the unfinished foundation for a split level house.  I'm at a loss as to how I would deal with the foundation, or if its still useable at all.  There are no obvious issues I have seen with it, but I haven't inspected it closely at all, and honestly construction isn't my field, so I don't know what I'm looking for.

 

There is also 1965 single wide mobile home that is gutted but still livable inside.  Its plumbing has been frozen and is all destroyed.  Water is scabbed into the place with hoses to supply one sink, and a washing machine, but it is not hooked to a septic system (sink and clothes washer drain to a dry well), there is an outhouse.  It has a working gas(NG)  furnace, and a gas range in the place, as well as electric.  It is currently being lived in.

 

There is also a derelict motor home on the property, I don't know the entire story about it, as far as what works and what doesn't.  But I assume very little works if anything, and its a big'n.  Its a 3 axle job that would require a big rig wrecker to move.

 

Garbage is free to dump here (its paid by taxes), and the scrap yard will take the RV, if the AC's (it's got two), the fridge and the black water tank are removed.  There is also some large pieces of structural scrap metal that would require some heavy equipment to remove, but mostly it could be loaded into a drop box, or the into the back of my pick up truck.

 

We think we could pick up the property for about $40k, and we are trying to decide if its worth all the work and headaches that will be attached, and we are also trying to estimate how much it will cost to clean it up....   Its location right next to our property makes it quite attractive.   That's harder to put a price on.

 

Its all a little overwhelming looking at it, and just typing this out helps me wrap my head around it some.

 

I would appreciate hearing any and all perspectives, and thoughts about my situation.

 

 

What's shaking Juthro... you just plopped yourself right down into the middle of my wheel house...

 

Obviously, in this forum, direct assistance with your issue becomes more difficult... I am not exactly well versed in the northwestern united states market, but I can try to be of some help...

 

If you are trying to develop an idea of the property's market value, you are looking at land value less site clean up. Any cost necessary to remove the existing foundation and personal property (junk) should be deducted from the value of the land... If you had the property valued professionally, no value would be put on the mobile homes, RV, foundation, none of it... It would all be viewed as a negative to the buyer who in most cases wants to come in and do what they want with a property like that and not be tied down dealing with the last owner's headaches.

 

I don't know how your county is set up but the County assessment office or auditor (depending how they do it there) could probably help you do a search for land sales in your area. Collecting an array of comparable sales should help you to develop a range for what similar properties sell for. I would analyse the data on a price per acre basis and adjust upward or downward for characteristics like topography, zoning, utilities, access, etc.... I would adjust the price per acre of each comparable sale up or down and develop a range of value for my property as if it were vacant and ready for improvement... Once I had that value on a per acre basis, I would apply it to the size of the property, deduct the cost of removing that stuff, and voila.... Market value...

 

I hope this helps... Difficult to explain on here...

 

:cool:


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#3 Juthro

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Posted 25 October 2018 - 05:02 PM

Thanks PJ, we are in the process of doing just that.  We found most of the info online with the Burrow (that's what we have instead of  counties) 

 

But part of my problem is I haven't figured out how much it is going to cost to clean the lot up.    Like there would be choices with the foundation, as to whether to remove it completely, or to back fill it, or possibly try to use part of it.  There are a lot decisions to be made and a lot of number crunching left to be done.

 

I think maybe we would be better served to talk to our own realtor, she was a godsend when bought the house we are living in now.  She would/should have much more insight into whether we were making any big mistakes in our calculations, or overlooking something that would come back and bite us.

 



#4 Alder Logs

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Posted 25 October 2018 - 05:58 PM

You should buy it and ship me the structural steel.  Then fly me and my sawmill up there, if the burrow will allow you to make your own lumber.


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#5 Skywatcher

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Posted 25 October 2018 - 09:11 PM

Determining the market value is obviously important, but in my opinion, what you would want to do with it long term carries a lot of weight in the consideration.

 

Questions like what would you want it to become, and what would that dream cost in time and money? If the objective is at some point to be generating income, there should be a timeframe consideration for that, that is realistic. How long would you be willing to float debt and cost, before the switch flips and it is now generating a positive cash flow? Is the property itself a good investment?

If you are wanting to add to your own property for guests and investment, then the question is really about what you are comfortable with for cost.

 

I personally walked away from a rental property and sold it, because of the endless stream of cost and time I just couldn't deal with physically and mentally anymore.

 

If it has a view anything like yours, I'll be your summer rental............................................


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#6 wharfrat

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Posted 25 October 2018 - 09:59 PM

you had me at "guest house"  :wink:


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#7 coorsmikey

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Posted 25 October 2018 - 10:09 PM

Juthro, During my stay there I had an interesting experience that if its not at all helpful to you hopefully you will get at least a laugh from it because you will see the ironic humor. I purchased a new refrigerator because I had an opportunity to get a fancy discontinued display model for a really good deal. ( you know where I was working) So had to get rid of the old one which worked perfectly fine. I put it out in front of the house with a FREE sign on it. Well its sat there for a couple of weeks and nothing. One night after a few beers I was trying to think how to get rid of it without me hauling it to dump. So I went outside and took the FREE sign down and replaced it with one that said $50. weirdest thing happen that night.......I woke up the next morning and the fridge was gone. Now that it had some value, someone stole it. Problem solved.


Edited by coorsmikey, 25 October 2018 - 11:56 PM.

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#8 coorsmikey

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Posted 26 October 2018 - 12:17 AM

 

 

If it has a view anything like yours, I'll be your summer rental............................................

Yeah that could help with your current sleep situation as well,OR NOT! The sun goes down just below the horizon a lil after midnight and comes back up a few hours later without actually getting dark. All I know is that since my stay in AK and now I'm back in the lower states, a nice dark room makes for a good night sleep. In AK I can't quite remember if I slept at all during the summer because its all just one big blur. Once your get your tie dye long undies ready, don't rule out a winter vacation at the up and coming "Juthro's Winter Resort" for some Killer light shows and some cold smoked cheese and salmon. Just don't get up to early if it snows. Juthro has a record of shoveling snow in his birthday suit. I'm sure he would mind some help shoveling though.


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#9 PJammer24

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Posted 26 October 2018 - 09:33 AM

Thanks PJ, we are in the process of doing just that.  We found most of the info online with the Burrow (that's what we have instead of  counties) 

 

But part of my problem is I haven't figured out how much it is going to cost to clean the lot up.    Like there would be choices with the foundation, as to whether to remove it completely, or to back fill it, or possibly try to use part of it.  There are a lot decisions to be made and a lot of number crunching left to be done.

 

I think maybe we would be better served to talk to our own realtor, she was a godsend when bought the house we are living in now.  She would/should have much more insight into whether we were making any big mistakes in our calculations, or overlooking something that would come back and bite us.

 

 

Depending what you plan to do wit the lot, I would consider removing the block that is above grade and back filling the foundation...

 

You might be better off speaking to an appraiser than a realtor, but I am biased.

 

I would struggle to pay more than market value for any property. The maximally productive use (income potential) should be considered when developing an opinion of market value.


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#10 Juthro

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Posted 26 October 2018 - 01:59 PM

you had me at "guest house"  :wink:

 

 

 

 

 

If it has a view anything like yours, I'll be your summer rental............................................

Yeah that could help with your current sleep situation as well,OR NOT! The sun goes down just below the horizon a lil after midnight and comes back up a few hours later without actually getting dark. All I know is that since my stay in AK and now I'm back in the lower states, a nice dark room makes for a good night sleep. In AK I can't quite remember if I slept at all during the summer because its all just one big blur. Once your get your tie dye long undies ready, don't rule out a winter vacation at the up and coming "Juthro's Winter Resort" for some Killer light shows and some cold smoked cheese and salmon. Just don't get up to early if it snows. Juthro has a record of shoveling snow in his birthday suit. I'm sure he would mind some help shoveling though.

 

 

 

Let me start with, I would totally be intune with sharing a place to play with my brothers in arms :)  I'm not really looking at the property for a means of income,  I am however looking at possible ways to make it help generate some of the funds that will be needed to turn it into what I want it too become.   

But while this move is more about enriching our lives, as opposed to enriching our portfolio, but we still have to make ends meet.  So the rough plan is to start with is making its use by others at least come out financially neutral, so that if we let others use the place while we are not, that its not costing us anything.  

 

Since I would let family stay there for free, and the fact my friends are valued as high as (or higher) then family.... I'm sure we could come up with a place that people could come and enjoy seeing a piece of the world that not all that many get to see.

I would like to think of myself as a fairly lenient and understanding landlord, and my visitors would be mostly free to do what they feel like as long as it doesn't hurt anyone, or anything.

 

I couldn't put myself in a position to supply party favors (with the exception of the cheese and fish) to most guests as I won't risk the property over possible legal issues.   But, if someone wanted to send up a self addressed package in care of me, with some personal items that couldn't be taken on the airplane (cuz of weight restrictions, and things like that).  I would be happy to pick it up from the post office and hold it for them until their arrival.

 

Who knows, maybe I can start some kind of psychedelic friendly bed and breakfast, lol.  

 

As for the view, Skye, their is only about a city block distance between the two properties.  The rental doesn't have a lake view, and is mostly surrounded by trees (a nice view on its own),  but my personal guests would be welcome at both properties. 


Edited by Juthro, 26 October 2018 - 02:04 PM.

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#11 Juthro

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Posted 26 October 2018 - 02:08 PM

 

Thanks PJ, we are in the process of doing just that.  We found most of the info online with the Burrow (that's what we have instead of  counties) 

 

But part of my problem is I haven't figured out how much it is going to cost to clean the lot up.    Like there would be choices with the foundation, as to whether to remove it completely, or to back fill it, or possibly try to use part of it.  There are a lot decisions to be made and a lot of number crunching left to be done.

 

I think maybe we would be better served to talk to our own realtor, she was a godsend when bought the house we are living in now.  She would/should have much more insight into whether we were making any big mistakes in our calculations, or overlooking something that would come back and bite us.

 

 

Depending what you plan to do wit the lot, I would consider removing the block that is above grade and back filling the foundation...

 

You might be better off speaking to an appraiser than a realtor, but I am biased.

 

I would struggle to pay more than market value for any property. The maximally productive use (income potential) should be considered when developing an opinion of market value.

 

 

Hadn't considered an appraiser, thanks for the idea PJ.  ANd I agree with you about knocking down and backfilling the old foundation, it is probably the best plan.


Edited by Juthro, 26 October 2018 - 02:09 PM.





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