Good Deal or Not? Another Fixer Upper Edition?


This home is located at 3516 10th Street, NW.

View Larger Map

The flier says:

“$20K PRICE DROP! WOW! 6 Bed, 3 Bath Semi-Detached home with an unfinished basement. This home was rehabbed at some point and most of the original character remains. Hardwood Floors, Beautiful woodwork, Awesome fireplaces, etc. Great porch for relaxation. Off Street Parking. Currently Tenant Occupied at $3,050/month. Bank Owned. Sold in AS-IS condition. Seller will make no repairs.”

More info and photos found here.

From the photos it looks like this home may be a group house at the moment. But it does seem there are some good bones here. The original asking price was $699,900 but now they are asking $529,900. It has been on the market 149 days. So what do you think of the house itself? Does it have potential? Do you think $529,900 is possible?

28 Comment

  • love this style of duplex. and id say after their price drops they are getting closer to reality as it seems to be bigger than it looks. but the lot is small. and buying a place with tennants is a pain in the ass. so that will turn a lot of people off. I say it sells at 450

  • At the new price, I’d say good deal or at worst fair deal, although I wonder if there are some serious problems with it given the “as is” emphasis and the fact that such a large place in a good location that looks to be in decent shape from the photos hasn’t sold yet.

  • I think the “as is” emphasis is because it’s bank-owned. The bank is not going to make arrangements for any repairs, they just want it sold. So it will likely sell for a price that would reflect needed repairs. My guess is that the original asking price was from before the house went into foreclosure. Banks are pretty savvy about asking a reasonable priced for homes in foreclosure and don’t want it to sit on the market forever.

    It would make a decent investment for someone who wanted to buy it and keep on renting, if you had enough to make a 20% down payment.

  • Selling it as is could go for 100 or 200, rents could be sharply reduced, consider sweat equity in lieu of high rents or values, Habitat for Humanity, or other social concerns related could possibly invest, consier Catholic Charities St Martins Apartments on North Capitol street for example.
    Just because its near Metro doesn’t neceesarily mean there have to be more bars, just decent stores will do.

  • @1:56 pm: Huh?

    If it’s currently renting for $3K/mo., it’s not a good deal at the current price. Love the porch, though.

  • Why would you say that, Ed? With the rock bottom interest rates right now, your mortgage would be less than the $3k rental income. unless you think rental prices are going to tank, from a purely investment standpoint, it is a good deal. for an investment, the rental income should just be a high percentage of your costs, as you expect to be able to raise the rent, and have it balance out until you are making money. if the rent is covering the mortgage and then some, as it is in this case, it’s a great deal.

    It is a huge house with a lot of potential, i think it sells for more than $500k.

  • I dont know if I would call 2500 sq ft. a HUGE house. I saw a 3200 sq ft rowhouse on oak between 14th and holmead that was going for 500,000 and wasnt in much worse shape. had an equally shallow lot but room for parking and a patio and a much better location than this one. and that was 6 months ago. you could argue the market has only slid more since then

  • The lot size is 2500. Listings in DC don’t usually report the square footage for houses. It looks like this is three full stories above grade, which suggests that it is pretty huge by DC standards.

    For whatever it’s worth (and not sure the assessment does mean much), the tax assessment for this property in ’08 was $682,230.

  • Trying to figure out why people think this is a good deal, and can’t really figure it out. That said, it’s not a bad deal, I just think one could do much better. (aka, I just recently bought a beautifully renovated townhouse two blocks from petworth metro for under $500,000). This needs work — in this area, you deserve better for that price tag (at least at this point.)

  • oh, and tax assessments mean absolutely nothing

  • Ross, I think it’s worth more b/c it’s in Columbia Heights and it has 6BR/3BA. I also own a very typical rowhouse in PW close to the metro. My house is 3BR/1BA and 1250 sq ft. I think this one is probably close to double that size. I read the median home price in PW is $375K (and believe me, the median PW home is also a fixer-upper). This house is $155K more than the median PW home price. The CH address 2 blocks from the new developments on 11th St. probably adds $75K to the price. Then adding another $50K-75K for 3 more BRs and 2 more BAs I think adds up to a good deal. This house needs updates, but it’s definitely not a shell.

    I’m with RD that you could easily rent it out at a profit if you make a 20% down payment (without that down payment now you prob would not get the loan). I also think the rent is prob below market, too.

  • my tax assesment is currently 127,000 more than what I paid for it a few months ago… and that does not look like a 2500 sq ft lot. mine looks way bigger and is only 2000. but maybe the side yard adds a lot. still mine looks to be about 3 times deeper

  • With the rock bottom interest rates right now, your mortgage would be less than the $3k rental income.

    Do the numbers, how is this possible? At BEST the numbers have the owner depositing $25k and losing $100 per month.

  • I wouldn’t buy it. A money pit isn’t a good investment during a recession, however, if you are going to live in it for many years then it might not be a bad deal. But still, I would wait for prices to drop. The economy isn’t improving, and I’m willing to bet there are still some price corrections to be made in neighborhoods like CH or Petworth or any transitional neighborhood for that matter.

  • @RD: You’re right – I was a bit harsh. However, even with a 20% down payment, you’re still likely to be just on the wrong side of the Jumbo threshold (at least, from the various lenders, including credit unions, that I’ve checked with recently), so your rate isn’t going to be *that* good. Even so, if the property requires basically no significant improvements or upkeep, you’d be right around the break-even point at this price (though you don’t get the homestead bonus on your property taxes if you’re not living there). The calculator over at the Irvine Housing Blog is pretty handy for figuring this stuff out. I’m too lazy to do the html thing to make the link all fancy, but here it is: (when playing around with it, note that DC’s property tax rate is something like 0.376% for owner-occupied properties, but higher for rental properties – though I’m relying on the itnterwebs for that info, so please correct me if I’m wrong).

    So yeah, it’s more like a halfway decent deal – you won’t make much, if any, money on rent if you buy it as an investment property, but you won’t really lose money, either, and if you hold it long enough, it’s likely to appreciate a fair amount. If you need to put more than $50,000 into it to keep it as a viable rental property, then you’ll have to raise the rent a bit.

    At $699,000, this was a bad deal…at the current price, or something like it, it should sell eventually.

  • a side yard would add a lot. figure if that lot is 100 feet long and the space from the side of the house to property line is 3 or 4 feet and you are tacking on an extra 3-400 sq feet to the lot than if it wasnt a semi.

  • I must say. I thought i was buying at the lows a few months back. I saw areas I didnt think were in my grasp and then jumped when I saw something in a location I didnt think i would ever be able to afford back when I started paying attention to dc realestate in 2005. but now I cant help but wonder. should I have waited another 6 months. eh. who cares I like my place. but is anyone else wondering how much more things will slide. anyone out there sell for a loss yet? I have friends looking to sell a condo they bought in 2005 and they are not too happy as the question isnt if they will sell at a loss but just how much that loss will be.

  • DC’s current tax rate for residential properties is .85 per $100. of assessment. The difference between owner occupied vs. investment is the homestead exemption, which currently rolls back $60,000. of the assessment value. Owner occs are also capped for increases. Vacant properties without exemptions are currently taxed at $10. per $100. of assessment value.

  • I have someone in my building contemplating just that anon4:24. Currently, she is willing to go 10K below the price she paid in 2005. She still hasn’t had any nibbles. The economy sucks and everyone knows these houses shouldn’t be selling for more than they’re really worth. This recession might cause some permanent change in spending habits.

  • See, I knew the intertubes weren’t to be trusted! Thanks, hipchick.

    A final note, if you’re asking over half a million, is it too much to ask that you make all the beds before you photograph the bedrooms for the listing? (That’s a rhetorical question.)

  • Ed…tenants…who get to stay whether the property sells or not…prolly don’t give a…

  • Seriously though, for a foreclosure, it’s nice that the agent included interior pics. If I were the agent, I wouldn’t feel comfortable touching a tenants belongings, even to straighten up a bed.

  • Re: potential for future slip in housing prices. If you intend to stay there for at least a few years, you have nothing to worry about. Nobody can predict the bottom of the market. The question is – do you like the house, and can you afford it. Don’t try to make the “perfect” investment, it will be just fine as long as you aren’t going it with the intention of selling in a year or two. And you shouldn’t buy a house with that intention no matter what the market.

    Further – at the low end of the market, further declines are less likely than the higher end, and even if they do drop more, the “real value” loss is far less since the price wasn’t that much to begin with. 10% loss on a 300K house is only 30 grand. Sounds like a lot but as far as real estate goes, it’s not much and it’s unlikely you wouldn’t recoup it in a few years. But if you wait 6 months, you’ve already poured 6 months of rent down the drain, you’ve missed the benefit of living in a place you own and presumably like better than whatever you were renting before, and there’s no guarantee things will be cheaper then, anyway.

    Final point of observation is that housing prices in DC have actually risen in the last year, not declined. The market in DC is not a mirror of the national housing market. I’m sure there are dramatic variations neighborhood to neighborhood, but a good deal is a good deal no matter what you read in the newspaper. If you just want to toe the conventional wisdom, you are unlikely to get a good deal. Figure out where you want to live, what you can afford, and look at LOTS of houses until you get a good sense for what the range of conditions/prices/etc is and wait for the right one.

  • Ok, some people made some comments about how the size of the lot can’t be X square feet, and my lot is Y sq ft, and it is so different, etc. Well you’re right in your skepticism. the listed lot size on the tax records is the size of the land you actually own, and the actual land that is ‘yours’ is bigger than that number because of the city easements. for petworth row houses, you don’t own from about the middle of your porch forward. i live in an end house with a huge yard (the kansas ave good deal or not), so you get the easements on both sides. The actual lot by the assessments is only 2200 sq ft, but it is actually one of the biggest lots around.

  • Right now, the way thing are going, I have seen in media, where people have gotten tax write offs for donating a house, does not matter if one is urban or rural.

  • ok, and as far as the price and whether it’s a good investment:

    if you are an investor, and have the 20% to put down, buy it for $500k, and take out a $400k loan at 5%, your mortgage and interest payment is $2150. property taxes last year for the house were $5k, so let’s say $2650 payment with taxes and insurance. So you have $100k sunk, buy you are turning $400 profit after payments. obviously repairs, holding costs, etc. are going to be a factor. if you fix that place up, you could be getting a LOT more than $3k, though. if you had the cash, you could definitely turn a profit as an investor.

  • Not everyone is an investor, and is unfortunately overlooked that a safety net, by necessity, is there and needs to be strengthened.

  • Some advice: this is a great time to pick up an investment property, but DON’t LET THEM KNOW IT’s VACANT — those taxes HURT

Comments are closed.