# Buying a distressed property



## fetch33 (Jan 15, 2010)

My husband and I are looking for our homestead property. I had been watching a place online and the price has been dropping in large chunks, like 20k very few weeks. So we went to see it with a realtor. House is 1960's model, so some updating there. Downside is the mechanicals are all original, but there is a wood stove and pellet stove already installed. There are 2 very nice barns, I call them him and her barns...one is a giant man-cave barn with concrete floors and an exercise room, complete with cable TV. The other barn is set up for horses, goats and chickens. There is a small fenced pasture, a place for a shooting range, about 10 acres in alfalfa, some fruit trees and a large pond, which is mysteriously bone-dry. The reason the property is distress, and going to be a short-sale, is the 100 year flood plain was just redrawn. The very nice barns are now in the flood plain and the line in fact only misses the house by a few feet. The mystery compounds when you put together the fact that in the barn's exercise room, about a foot of the drywall and insulation have been removed from the bottom. There is a large ditch/creek to the east of the property. The realtor mentioned we could have the property with the barns carved off from the rest and purchase with cash and put the mortgage on the house and rest of the property, negating the need for flood insurance on the house. I suspect has been done in the past because there are already 3 property tax records associated with this property. Now the question. This property could be had for a significant amount of money less than comparables, probably under 200k. We are in a position to purchase barn for cash. Our concern is when we would go to sell, probably decades away, we would also have the same problem with selling the place presumably. We are being cautious and thinking through all options. My husband thinks some very tall hugelkulture beds placed to the east would stop the possibility of flooding to the property, but the property is scarred with this flood plain designation. Any thoughts?


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## Haven (Aug 16, 2010)

Have a septic inspection, replacing that costs thousands. Also, drywall removed near the floor means standing water was in there that molded it. I would be careful and maybe wait till heavy rains in the spring and walk the land then.

I think a lot of water issues can be solved with permaculture or excavation but some cannot. For instance, I have a low spot on my land where willows have been planted and that helps dry it up 99% of the time. A few times a year it will flash flood because a neighbors pond 20 acres away overflows and the railroad mound on the other side of this land acts like a dam. You have to look at all possibilities like this.


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## Darren (May 10, 2002)

There may be a reason the mechanicals are still there from the sixties. In that era the combustion chambers in furnaces were cast iron instead of the sheet metal used today. Some hot water heaters had monel tanks which never rot out. AC units had compressors that make todays units look like something out of a crackerjack box. If it's an old R500 AC unit, you can buy that freon off ebay much cheaper than the "new" freons. You'd probably need to replace the A coil and the coil in the outside unit to continue using it, if it leaks.

I'd look at the stuff closely. If it's operational it may last another 50 years. It won't be as efficient as new stuff. But it will easily outlast the new stuff by decades.

Compare the savings on the yearly utility bill on old vs. new to determine how long the savings will have to accrue to pay for the new equipment. Also figure the much shorter lifespan of new mechanical equipment to determine how many times you'll have to replace that equipment over the time you live in the house. The old stuff may never have to be replaced.


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## Darren (May 10, 2002)

The 100 year flood plain designation is a statistical calculation. It's meaningless from a hydrological standpoint. The last flood of record in this area was a 2,250th year event. When you consider that flood records don't go back 2,250 yaers, it tells you how flawed the process is and how much real risk may exist.

You need to look at the history of flooding in that area and understand a bigger flood is only a matter of time. Unless the house is much higher than the barns, it will be flooded at some point. It may be a thousand years from now or one year from now.


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## edcopp (Oct 9, 2004)

Will you be forced to buy flood insurance? If so this may be a "deal killer" until the price comes down a lot more. Find out the exact costs that you may be saddled with. Most likely you will be in shock.

Now the Hougl beds are a great idea. Might just work very well. Unfortunately nobody in government, with any common sense (possible oxymoron) has seen the video.


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