Buying a new (old) house - inspections?

jhynesrockmtn · 10-07-2010, 09:11 AM

Okay, now that the girlfriend/fiance thing is cleared up and I am single I've decided to buy a house much closer to work and get back into the real estate mini investment business. I own a shop with an apt. above on a single family buildable lot that rents for $1,000 per month and the house I'm in now should rent for $1,500 or so. I want to hang onto both places and ride out the downturn in the market. I've been a smaller scale landlord in the past and have some money saved. That is primarily how my ex and I built some investments together. Post divorce my net worth is half what it was and I'm not getting any younger.

With rates and prices at such low levels I started looking and found something I think will work for $400k. I'm balancing what I want (smaller, walking distance to stuff, cool) with resale (larger, more family oriented neighborhood, good shape but room to improve) and found a 1941 house 10 or so minutes from work, several blocks from shops, restaurants, bars, etc.

It's got new windows and roof, is bigger at 2,700 sq. ft. than I need, good parking but will need a proper large garage later. It could use new paint, updates, etc. but stuff I can do along the way. It's very clean now and move in ready.

Now, to the inspection process. I don't have any money to lose here on something that could go wrong in a big way. I'm having a really good inspector go through the place with me and having the oil furnace serviced/inspected, tank tested for water, sewer line camera inspected. Anything else I should look at? I'm a bit nervous that the electrical is all or mostly original and pipes the same. The place is 70 freaking years old but looks/feels very solid. I've owned many old homes and learned some hard lessons along the way.

Anything else the brain trust would recommend I do?

RWebb · RWebb's Garage

check the roof carefully - it rains here ya know
get up in the attic and nose around

also check the area near the bottom plate on all ext. walls - see if there is any rot or not

check the tops of all windows & doors also for rot

Rot 911 · 10-07-2010, 10:39 AM

If the electrical is original, you may not be able to get the house insured. Most insurance companies will no longer insure houses with knob and tube wiring or service panels with screw in fuses. To update will cost you from $8K to $20k depending on the size of the house.

Halm · 10-07-2010, 10:53 AM

EPA and oil tanks are not a good mix. Before you buy, ask the owner if you can have an environmental service test the soil. If the sellers say "yes" and the test comes back contaminated, run away. If the sellers say "no" also run away. The only way to buy a house with an oil tank is test before you buy and have the test come back "clean."

We did not know this when we bought and it cost us lots of $$$. PM me if you need more info.

looneybin · 10-07-2010, 11:19 AM

have a mold inspection done

krystar · 10-07-2010, 11:22 AM

yea oil tank is a big PITA. i walked away from a steal of a property because of oil tank. especially since it was underneath concrete slab patio

looneybin · 10-07-2010, 11:33 AM

oil tanks are usually an east coast thing, they are pretty rare on the west coast, not to say there couldn't be one there, just not likely

jhynesrockmtn · 10-07-2010, 12:26 PM

The panel is breaker type but older. I think 1940's is post knob and tube but that will get a thorough going over on Sunday. It has oil heat and a 300 gallon tank. The system has been serviced annually, filled regularly and tested for water at each fill. I spent a half hour on the phone with the furnace/oil place today. Just got lucky and talked to the company that has the contract. The contract with the provider carries insurance on the tank and for environmental issues through the state. I will still check into a soil test. Oil is the new green home heating source with 100% bio fuel available. Don't know that I believe that but they now sell blends up to full bio heating oil.

Halm · 10-07-2010, 01:24 PM

Here are the Clift Notes on oil tanks. Since it is post 1984, the owner at the time any leak is detected is responsible for clean up. It does not matter when the leak started. You can be talking 10's of thousands of dollars in clean up. I know about this because this happened to me 3 years ago.

I can not advise you more strongly than to say do not buy without a soil test as part of inspection. You simply don't want the EPA poking around and have to disclose that when you want to go sell.

dad911 · 10-07-2010, 02:01 PM

I would not buy a house with an oil tank in ground. Have it removed and soil tested pre closing. Hal is correct, owner responsible for cleanup.

Also have asbestos & lead paint tested. New rules make lead paint very expensive to deal with.

jhynesrockmtn · 02:36 PM

Great info. The brain trust is providing great service here. Thanks! I dug a bit deeper and spoke to a soil testing and tank remediation service. Washington has an insurance program for active oil tanks which provides up to $60,000 of coverage. He checked the records and this tank has been registered since 1996 with the program and given that recommended not moving forward with the soil samples. For tanks not registered the testing is $250 per sample, they do 3 and stop at 1 or 2 if they find oil. Does that smell okay?

Zeke · 10-07-2010, 03:10 PM

Quote:

Originally Posted by dad911

Also have asbestos & lead paint tested. New rules make lead paint very expensive to deal with.

Just don't sand it. We are now chemically cleaning the surface paint and going directly into a primer coat. You can gently sand the primer coat only to knock off any nubs and apply the finish coat.

The rules say that we can't "disturb" more than 6 sq. ft. of paint that contains lead. Fine, we won't disturb it. There is hardly any painted surface left that hasn't been repainted at some point since 1978 encapsulating the offending paint.

The real problem is going to be with renovation that requires removal of any materials that have lead somewhere in the layers.

Just know that no laws have been broken if no one can find any lead while work is progressing. What has to be done about existing lead in homeowners' furniture and carpets is another issue.

Personally, I will test beforehand for loose lead contamination, work on newer homes, or walk away.

Right now I'm favoring walking away.

Halm · 10-07-2010, 03:55 PM

If you have to go through remediation, are you given a letter from the EPA saying that the property is now clean?

dad911 · 10-07-2010, 07:16 PM

Quote:

Originally Posted by milt

Just don't sand it. We are now chemically cleaning the surface paint and going directly into a primer coat. You can gently sand the primer coat only to knock off any nubs and apply the finish coat.
......
Personally, I will test beforehand for loose lead contamination, work on newer homes, or walk away.

Right now I'm favoring walking away.

You won't touch it, someday perhaps no-one will. And lead paint is alot easier to deal with than asbestos or contaminated soil.

Problem is, laws get stricter not easier, and it never goes away unless removed.

I expect someday in the near future you won't be able to finance a house with lead, asbestos, or an underground tank.

And every year goes by, remediation gets more expensive and more complex.

dad911 · 10-07-2010, 07:19 PM

Quote:

Originally Posted by jhynesrockmtn

Great info. The brain trust is providing great service here. Thanks! I dug a bit deeper and spoke to a soil testing and tank remediation service. Washington has an insurance program for active oil tanks which provides up to $60,000 of coverage. He checked the records and this tank has been registered since 1996 with the program and given that recommended not moving forward with the soil samples. For tanks not registered the testing is $250 per sample, they do 3 and stop at 1 or 2 if they find oil. Does that smell okay?

What if 60k isn't enough? That's a 'feel good' program so people still buy houses with underground tanks, probably in place because of lobbying from the heating oil companies........

jhynesrockmtn · 10-07-2010, 09:04 PM

Quote:

What if 60k isn't enough? That's a 'feel good' program so people still buy houses with underground tanks, probably in place because of lobbying from the heating oil companies........

Good point. I'll do some more asking around. From what I've read and the discussion with the tank remediation guy, $60k should cover it and tanks in continual use with no water penetration should be ok but you have a good point and I'll keep digging and talk to the people at the state.

I met a buddy for drinks tonight who invited another friend who just happens to be an electrician so he will look at the panel and wiring for me for a few beers.

notfarnow · 05:15 PM

Quote:

Originally Posted by jhynesrockmtn

The panel is breaker type but older. I think 1940's is post knob and tube but that will get a thorough going over on Sunday.

I was looking at a house with knob & tube the other day, built in 1952. That's as late as I've seen for the stuff.

I always assume the worst with an older home, expecially if it's been through several hands and had additions/renovations. Never know what you'll find.

3 deal breakers I typically look for:

WIRING
1) Is it grounded? Check all the outlets with an outlet tester. Many ungrounded homes have 3 prong outlets.
If it's not grounded, it's going to be:
- 40's/50's/early 60's ungrounded romex wiring - insurance co's are usually OK with it except in kitchens & baths
- knob & tube: deal breaker for most insurance co's

If it's ungrounded but you can't see whether it's k&t or romex, see if you can get a good look at a switch or outlet. A LOT of the k&t copper wire was nickel plated. It'll look like aluminum (many inspectors mistake it for AL) but if you look closely at nicks, or where it was cut, you'll see the copper. Anyway, if that's what it looks like, there's a pretty strong chance you have k&t... although some early rubber insulated, cloth sheathed romex was plated too.

2) Is it aluminum? Not necessarily a deal breaker, but it does require special attention and most insurance co's are going to want a letter from an electrician stating that it is up to code.

Mold/rot
I use a moisture meter to check under all the windows, corners of the house, and in the corners of the ceiling on the top floor. If there is a finished basement (scary in an old home) I check all around.

In the attic, check for mold/mildew on the inside of the roof sheathing, especially near the eaves. Many old homes were insulated through state/provincial/federal rebate programs, and lots of the "contractors" were the *worst* fly by night schysters around. Their MO (around here anyway) was to jam the attic full, stuffing the soffits tight. I often see mold right around there. Needs to be pulled away and vented.

Asbestos/uffi
I check for asbestos wrap around hot water pipes, and asbestos tape on hot air ductwork. Also, check for asbestos vermiculite insulation in the attic... and don't count yourself as lucky if you see fiberglass or cellulose... check underneath it! Twice this year, I've found 6" of vermiculite underneath fiberglass batts in an attic.
Asbestos siding: doesn't bother me but it's a consideration for resale

The attic is also a good place to check for uffi, might be the only place you'll see it exposed. You might find dust from it if you take an outlet or switch cover off. It can be tough to spot. Uffi isn't really considered a health issue anymore... but if it's a disclosure issue, it's a resale issue

Zeke · 10-08-2010, 05:15 PM

Quote:

Originally Posted by dad911

You won't touch it, someday perhaps no-one will. And lead paint is alot easier to deal with than asbestos or contaminated soil.

Problem is, laws get stricter not easier, and it never goes away unless removed.

I expect someday in the near future you won't be able to finance a house with lead, asbestos, or an underground tank.

And every year goes by, remediation gets more expensive and more complex.

That will be a sad day. Might as well tear the White House down along with the Capitol building and every other historic building.

Some do-gooders are so myopic that I wonder how we got this far.

notfarnow · 10-08-2010, 05:19 PM

Quote:

Originally Posted by dad911

I expect someday in the near future you won't be able to finance a house with lead, asbestos, or an underground tank.

Last fall, I had a deal fall apart because the bank wouldn't finance a house with asbestos SIDING, ffs!

jhynesrockmtn · 10-12-2010, 05:23 AM

Update:

The inspection went pretty well. It does have knob and tube and I'm getting bids on taking care of the panel and key wiring today to present to the seller. The inspector said the panel has to go.

Pipes are old galvanized and rusted pretty bad. Low pressure when upstairs and downstairs water are both run. Bids coming today on that as well. Sewer line in excellent shape per camera inspection.

Furnace is old but functional. Tank is ok. Everyone I've talked to in this area says I'm covered. The inspector has tons of experience with oil tanks in this area. Tank in continual use, no sign of leakage or water infiltration when tested, fill records and level testing during non use show steady levels, state insurance registered tank for 15 years. If I change heat sources it can be filled in place and certified for $400.

Rest of the house is very solid older construction. It's amazing to compare old timber with the *&^% that gets used in newer construction. Old growth cedar siding in good shape, new windows, roof and gutter, foundation is solid, no water penetration. Kitchen is older remodel using cheap cabinets so I'll be trolling re-use places for some cool old cabinets to retrofit in. My buddy in construction looked it over as well. He may room with me for a while to save some money and help with some projects. Looks like a go if the seller will come to the table with some $'s for electrical upgrades and plumbing retrofit.