So where do I start? I bought a house on the East Side of Austin Texas near the intersection of New York Avenue and Chicon. It is also near the infamous crime center at 12th and Chicon, where gang bangers, drug addicts, and prostitutes can be seen at any hour. It looked like hell when I bought it - a big-time fixer upper. I paid $214K with the seller paying $6K in closing costs, so about $208K. Why, you may ask, spend so much money on an ugly fixer upper that's not even livable in the middle of a notorius crime center? It's a good question and, believe me, I asked myself the same thing many times over, especially since this is my first home.
The answer is potential. First of all, the house is less than 1 mile to downtown Austin, which is where I work and I'd like to be able to ride my bike to work. All other houses within a mile from downtown (Travis Heights, Clarksville, Hyde Park) are selling for $350 K and higher. As the East Side cleans up, which it has been at a rapid clip, I expect home values there to be in the same ballpark. Also, the house is on a lot that is 0.25 acres, so it has a huge backyard and it's zoned SF3 so I can build another home on the lot. The lot has alley access so the 2nd home would have it's own driveway. The point is that I got a buildable lot along with my home purchase. Furthermore, I did some research and there is a redevelopment plan already drawn up and begun that is meant to extend all the way down 12th Street from I-35 past Chicon to Poquito. You can look at this plan here:
http://www.austinrev.org/crp.pdf
Bottom line is that corridor is the stuff near me including 12th/Chicon supposed to be complete by 2013 - just ike 11th Street has already been completed. My guess is it will take longer, but I bet $214K that it happens within 10 years. So, after I renovate the existing home, and after I build a second home on the back and begin collecting rent income, and after the redevelopment plan happens, and given the current rate of appreciation of properties in the area, and given the value of homes within comparable distances of downtown/campus elsewhere (Hyde Park, Travis Heights, etc.) - bottom line is I see this piece of property being worth a pretty penny down the road. Furthermore, I've been trying hard to amble in the direction of sustainability. This place gives me the opportunity to ride my bike into work, have a big garden, perhaps raise some chickens, practice native landscaping and rainwater harvesting - and basically have a place to begin this new lifestyle - not to mention being a short bike ride away from live music, bars, restaurants, etc.
The home itself is a 1968 ranch style house with brick all around, a fairly new roof (5 yrs), good plumbing (copper and PVC), concrete slab that's level within an inch, copper wiring - so the fundamentals are sound. Even so, it needs new floors, drywall work, kitchen renovation, bathroom updates, all new appliances, exterior cosmetics (paint, replacement of rotted window framing, etc.), and landscaping. My realtor estimated somewhere in the neighborhood of $20K needs to go into the house to fix it up. I am going to try to do some of the work myself to keep it affordable - with contractors doing things I don't want to or don't know how to do.
I started this blog at the suggestion of a friend to keep track of things and also pass tips along to folks who are interested and/or are doing something similar. I'll go through my decision processes and talk about what works, what doesn't work, and problems/solutions discovered along the way.
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