Sure, my wife and I wanted to live in a leafy neighborhood within walking distance of restaurants and public transportation, but an old house with architectural character, an inviting front porch and yard space were also important. We knew going in that the hunt would be challenging, and we were prepared for it.
After more than 100 candidates and nearly two years searching, we closed on a 1924 farmhouse that meets (almost) all of our requirements. It has high ceilings, an efficient floor plan and large windows, but it’s outdated and has the right amount of neglect that we won’t feel guilty about ripping out the kitchen, bathrooms, HVAC, windows and other elements.
So for the next six months, our life will revolve around picking plumbing fixtures, cabinet styles, decking materials and all of the other decisions that come with such an undertaking.
How did we get here? The hunt began in 2014 with Redfin searches in Maryland suburbs such as New Carrollton, Mount Rainier and Forest Glen. We saw old hovels in Cottage City, broken-down ramblers in Brentwood and overpriced Victorians in Takoma Park. We dismissed lackluster 1970s split-levels, uninspired ’60s ranches and ’50s Capes with misguided additions.
After about a year, we kicked our search into high gear, narrowing our focus to University Park and Historic Hyattsville.
University Park is a sought-after, tree-lined community located about a quarter mile from the University of Maryland. It has no commercial or retail amenities within its boundaries, but it’s ideally situated along the Route 1 corridor, near the soon-to-open Whole Foods Market and the Prince George’s Plaza Transit District Development Plan on East-West Highway.
We love University Park, so we seriously considered a 1934 Tudor on a large lot. Situated among mature trees and a great collection of Dutch Colonials and Victorians, the house had great bones, but we calculated that the sales price of $422,000 plus the estimated cost to renovate would push us way past our budget. We drew up a contract to make a low-ball offer, but ultimately we passed.
The next promising candidate was a 1911 Victorian in Historic Hyattsville, another desirable community with lots of trees and an excellent stock of Queen Annes, Italianates and bungalows. Listed for $325,000, the home had a chopped-up layout, an ominous-looking third-floor balcony and serious cracks in the foundation. No thanks.
A 1917 farmhouse in Brentwood for $230,000 looked hopeful on paper, but in person it lacked charm. We loved a large 1900 Victorian on a double lot in Brentwood ($400,000 asking), but we balked and someone snatched it for $427,000.
Early in 2016, we spotted the one that eventually became our house. Located in Historic Hyattsville, it had lots of charm, an open floor plan, nine-foot-high ceilings and a great location. More importantly, it had a grand front porch and good yard space. Alas, it was under contract. We stalked it anyway, hopeful that the deal might collapse. When it did, we pounced.
The sale of the house was conducted via an arcane online auction system where prospective buyers bid on a property up to a preset time; when the deadline comes, there is a 15-minute grace period that allows buyers to match the winning bid or increase it. If 15 minutes pass and there are no additional bids, the highest bid wins the house.
Buyers have 60 days to close on the property and follow a strict set of procedures. These requirements are so tedious that buyers sometimes lose interest or fail to meet the demands. In this case, the previous deal collapsed and bidding reopened in April 2016.
We instructed our agent to start bidding, setting our max at $296,000. Unfortunately, we lost the bidding and had to go back to stalking the house. But once again, the deal fell through and the bidding reopened in June. We increased our max bid to $314,000, and this time we won.
We were determined to close the deal, so we answered all queries and promptly submitted every document even when they required a strict 48-hour turnaround.
We bought our house with a 203(k) loan, an FHA-back instrument that allows buyers to fold the cost of repairs into their mortgage. Such loans are intense because the maximum loan amount depends on the proposed appraisal value, and banks have increased their due diligence to make sure a home is a viable candidate.
As part of the process, we met with six contractors, two electricians, a plumber and a landscape designer, and provided countless financial documents. But it was all worth it: After 90 days and three deadline extensions, we closed in late September.
Our renovation is not dramatic, but it will be extensive. The floor plan is nearly flawless so interior walls will remain as is, but we’ll replace the HVAC system and add a second one to the third level, upgrade the water heater, add a sump pump, enlarge the rear deck, repair the front porch, replace the windows, gut the kitchen and bathrooms, replace all light fixtures, run a new gas line, refinish the wood floors, add new wood floors on the second level, repair the staircase and add a bluestone walkway, among other minor items. A phased landscape plan is in the works, too.
I’m not a real estate investor, but this is house number five for me. My strategy is simple: Look for undervalued properties in good neighborhoods and avoid homes with structural or foundation problems to help keep rehab costs in check. I also do the work myself — until now.
The reno loan is a great tool for getting the work done, but it stipulates that a licensed general contractor must run the job. That means I cannot do as much DIY work as I usually do. On previous purchases, I did almost all of the renovations myself — save for electrical and plumbing work. But for this one I’ll be relegated to observer and supervisor.
Fortunately, I’ll still have opportunities to make cabinets and other built-ins and plan to do some painting and tiling to help save money.