I want to flip a house but it has a lot of issues. This is a long one.?

I am a first time home buyer and I want to buy a distressed home from a friend. The home is worth 100K right now, but she only owes 70K and wants to sell it for that price. The house next door just sold for 185K. This home is the eye sore of the community, so if it’s fixed up I think it will bring up the value of the whole block. I don’t want to “flip it” as in ‘in and out in 4 months’. I’d like to spend the next couple of years fixing it up. Maybe by then the market will have picked up.
The home needs a lot of work, though. Completely redoing the electrical and plumbing. It needs new siding. I’d be stripping the carpet and adding hardwood floors, new cabinetry, hardwood door frames and doors. It’s about 100 years old and 1100 Sq ft. It has a HUGE backyard, the width is about 1 1/2 times the size of the house and the length is about 5 to 6 times the size of the house. So, I would like to double the size of the home to occupy more of the backyard. In doing this I would be relocated the kitchen, expanding the size of the original bath, and adding 2 baths and 2 bedrooms, expanding the basement (if it’s even possible!!!) and finishing it.
To me, being inexperienced in this field, this sounds really freaking expensive. Here is where I need your help: this is what I’m thinking with the price being 70,000 and it being valued at 100,000 there is already equity that I can borrow against eventually. I think I should get a loan for 100,000, put the extra 30,000 into adding on to the house and redoing the electrical, plumbing and siding. Then the next couple of years I’ll take care of the aesthetic things.
I also want to add central air and heating. I heard about solar energy, but I hear it’s so expensive. I know I need to be talking to contractors about this and I will once I have more realistic goals for the house.
I just need to know from you guys how UNREALISTIC I’m being. Is it going to be a SHLOAD more expensive than I think? I’d be willing to put as much as 70K into it. Because eventually it’s going to be worth as much as 200K.
I don’t know if there is insulation. I assume that would have to be removed and replaced when they do the electrical? I do plan to live in the house for a few years. I’m a bit of a gypsy so probably no more than 5 years, but at the least until I get ALL of the renovations done, w/o personalizing. Appliances will all be stainless steel– k, maybe a little bit of personalization, all energy efficient. I want to take into consideration the cost of utilities for potential buyers.
I will find out about the other homes in the area to be certain that it fits.
Thanks everyone for the info. I will definitely pick up books and do some research.

Register New Account
Reset Password