We just put House #19 under contract yesterday…and unfortunately, it was a victim of the major flooding we saw here in Atlanta last year…
I’ve mentioned many times about the flooding last September, and the real estate market around here is just starting to see the repercussions. Because many of the houses that were affected by the flooding were not in flood zones, the owners often didn’t have flood insurance. So, when the water came through and caused tens of thousands of dollars in damage, many homeowners were unable to afford the repairs, stopped paying their mortgages and ultimately lost their homes to foreclosure.
The foreclosure process can take many months, and dozens of those “flood houses” are now coming on the market. In some cases, houses that were built in the past 10 years and originally sold for $140-180K are now being sold for as little as $30K. In most cases the houses are completely stripped — the county came in and tore out all the drywall, all the cabinets, and all the finishes to keep mold from growing — and renovation means everything from new electrical to new plumbing to new drywall, cabinets, toilets, sinks, tubs, flooring, etc.
It’s not uncommon to walk into a house that looks like this:
While it’s certainly sad that a family lost their home to this type of unexpected destruction, one of the nice parts of this business is knowing that by rebuilding these kinds of houses, we are essentially helping to rebuild the neighborhood and ultimately helping the entire city.
In my next post, I’ll go into more detail on this property, including pictures, rehab schedule and a budget breakdown that goes into gory detail of what it costs to put a gutted house back together…
You are ambitious! I’m looking forward to seeing your budget and hearing the story unfold.
Wow. Good for you, I hope you can fix it up and make money on it. I think I have
finally discovered why my husband and I have been seeing dirt-cheap houses in
Atlanta on the real estate sites. We could NOT figure out how such large executive-
type homes were going for $150,000 or much less. Do you know if the flood from
last year is why? It was freaking us out to find you could get either an executive
home in a plush neighborhood or for the same money, something that resembled
a shack. We live in south Alabama and were thinking of moving to Atlanta but just
didn’t get it!
That looks like an easy remodel.
We just listed a flood home that is not in a flood zone but also flooded. If you can get flood insurance, it’s transferrable (grandfathered) to a new buyer.
Would you mind elaborating just a bit on one point?
Under what authority was the county government able to enter private property and remove drywall?
Mark
Mark –
The remodel will certainly be easy once we get concrete estimates on the work. Because all the utilities are off (don’t even have an electric meter anymore) and we can’t test the HVAC systems, because we don’t know the extent of any plumbing damage beneath the slab (the drain lines were cut and are filled with debris) and because I’m not sure what the codes will require for things like electrical wiring that may have been underwater for a period of time, I’m having trouble coming up with a ballpark estimate on the work (it’s a big range right now).
As for your question about the county cleaning out the property, I have been wondering the same thing since I was told this. It may be that the owner’s gave approval or that it was deemed allowable due to public health concerns…I don’t really know. But, I’ve heard of this happening in several subdivisions where homes were flooded and subsequently abandoned. Perhaps the bank gave permission upon foreclosure?
Hi Linda,
Only a few areas of Atlanta sustained major damage from the flooding last year, so that may or may not be the reason why you’re seeing low prices in some areas. It’s also possible that what you’re seeing are short-sales that haven’t yet been approved by the bank. Oftentimes, agents will list short-sales very low in the hopes they can solicit an offer and then try to get the bank to agree to it. Very often though, the bank isn’t willing to consider offers that low, and the homeowners are back to square one.
What specific areas are you looking in? If you give me a specific address, I might be able to give you more info about the property(s) you’re looking at…
Looks like you have your work cut out for you. What are you looking to do this one..fix and flip or fix and rent?
Looking forward to it!
Hey Sean –
I’ll talk more about this in my next post, but right now, the plan is to rehab and resell…
Sounds awesome! Glad to see that you are back in business and blogging after a bit of a hiatus!
On ours, we just removed the bottom 4′ of drywall and replaced the outlets that were underwater. None of the plumbing was damaged, but we did replace the HVAC.
We called to have the electricity turned on and it was done. Hopefully you’re not cut at the pole or weatherhead. Some companies do this and will require a permit before they’ll turn the service back on.
I wish my DC property would flood. Any advice?
Ez –
Put a towel over the bathtub drain, turn on the water, go to work. By the time you get home, the house will be flooded.
Hey Mark –
We lost most of the drywall in the house, which is a good thing (I’d prefer to start from scratch as opposed to trying to figure out if there is mold behind the remaining walls).
As for the electrical, the meter was taken out by the power company and until permits are pulled and rough inspections are completed, they won’t replace it (as you pointed out could be the case). Also, code says that any wiring that was underwater has to be replaced; unfortunately, we don’t know where the water-line was, so we aren’t yet sure how much electrical work will be required (hopefully the inspector isn’t more of a stickler about this than our electrician is).
I’ll post the pics later today…