Only trouble is that I have no money, so all of my ideas stop at the edge of my imagination. Now that I work full time and am getting my student and personal debts in order, I can make some plans for savings and such, but I'm just getting started so I still feel completely limited. Leigh and I are doing a great job of budgeting ourselves, living within our means, and starting a substantial savings account. If all goes well we should be able to put a down payment on a property within the next 2 to 3 years. Otherwise, if we are happy renting a place (which is far from the case at the moment, but we're moving in the Fall so maybe...), we'll continue building our savings for several years to put toward our dream vacation/retirement/investment property. It's all up in the air right now, and that's fine, but I'd just like to have some options.
What spurred this post? Well, as usual I've been trolling the real estate websites. Partly out of curiosity and partly because a friend of mine has expressed interest in buying a house in the area sometime in the next year or so. I look at places, send her links, or just oggle at the possibilities/cringe at the lack of quality homes in Anchorage. Until last week, when I found this listing. It's an adorable two bedroom log cabin style home in a decent neighborhood. Originally listed for $121,000, now reduced to $108,000.
Leigh and I drove by it yesterday to find that nobody lives here and there's a foreclosure sign on the front door. We snooped around, looked in windows, etc. All-told, the house has 1400 square feet of living space divided between the main floor and the converted attic space. The yard is enormous and contains a small shed and a very large shed (which I'd like to have moved or removed entirely), both look brand new. I wonder if the large shed could be dismantled and sold? The house also has a very small attached garage space, which might find a better use as storage for bikes and skis and such, since it would be a tight squeeze just getting our little Toyota Yaris in there everyday.
The interior looks pretty good, as though someone started updating it and then ran out of money. The bathroom needs to be ripped out and replaced and the hardwood floors in the bedrooms need to be sanded and refinished, but otherwise the main level is perfect.
See how nice the kitchen is? I would have sprung for nicer countertops, but these will do just fine. It also is lacking a dishwasher, but that's a quick, $300 fix. No problem! The interior walls of the livingroom could use some drywall and a nice paint job, again, something I could do myself. The back door leads into a very large mudroom area with w/d hookups.
This is a picture of the attic space, but it hardly does the room justice. Altogether the attic is about 600 square feet. Again, this is bigger than the apartment Leigh and I currently share. From the outside one can see two very large windows providing natural light to this space. Also, some basic flooring has been laid down. All this space needs is some carpet or hardwood and finished walls, perhaps running some wire for electrical outlets in the walls. Initially I imagined this would make a great guest sleeping/"Emily Cave" because I'm always whining I don't have any space for projects and such. Leigh, on the other hand, always manages to take over the common spaces with her OCD version of organizing things. I'm always getting into trouble for not knowing where to put things because, you know, my ability to read minds is so powerful that this is a completely reasonable assumption. Anyway, it would be great to have my own space.
Then I realized this wasn't entirely fair or useful, so I now dream that this space would be a guest sleeping/TV room space. It would also be great for a kids' playroom or generally for flex space, leaving the living area on the main floor for quieter pursuits like reading or working from home. Basically, this would be the perfect little house for a young family who doesn't mind doing some fixer-upper work on weekends. So what's the problem, exactly?
Well, to start the era of $0 down mortgages is long gone, and for good reason. Ironically, if we were to put down just $1,000 on this house and take out $110,000 (to cover the property and closing costs) our monthly payment would be just under $800, which is $200 less than what we pay for our shitty 500 square foot apartment on the other side of town! However, even if we got a mortgage at $0 down to cover the property cost, I doubt we could get any extra money to cover the more costly repairs like the bathroom. Secondly, the neighborhood is fine but not great. I can't help but imagine that we'd buy the place, but $50,000+ into fixing it up and making it perfect only to sell it at a loss or break even because buyers wont' want to pay the appraised value on a small property in that blue collar neighborhood (which also borders a kind of shitty neighborhood).
Another major problem is the long list of caveats in the listing: "for sale as-is" and "the value is in the land" and "distressed property." How distressed? I have no idea. Perhaps the fact that a bank is selling the property is leading to all these warning signs just to cover their asses, but I'm hardly in a financial state to take such a risk at this point. While this investment could be a wonderful adventure with a great financial pay-off in several years, it could also lead to financial ruin for Leigh and I, as it seems to have done with the previous owner.
Basically, we shouldn't be taking any risks like this right now. In two years we'll revisit the idea and it's very likely we'll find a very similar property (albeit for a higher price because this is Alaska and everything is crazy expensive) will fewer "distressing" problems and hopefully in a better neighborhood. If we never find our ideal house to purchase here that's OK too, we'll just buy a place in Mexico!
Now we just have to hurry up and wait.
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