by Scott A. Des Planques
Historic
Preservation Planner
St.
Joseph,
Missouri
As
St. Joseph’s Historic Preservation Planner, I have had a number of experiences with good people who truly have the noblest of intentions when purchasing historic, yet run-down/blighted properties to restore. They see in their minds-eye how grand the home or business will look when it is done. This ultimate goal may be unobtainable if the owner does not have the financial resources to carry the project through to fruition. One of the biggest problems is that you can get some of these old houses very cheap. Hey, who doesn’t like cheap? We have some folks who are lured by the low asking price of these fixer-uppers without taking into account the true cost of restoring them. When someone calls and asks about buying an old home that needs a major overhaul I try to be up front and not give any false illusions. There are a number of stumbling blocks to restoring an old home:
1.) The investor can put most of their money in the purchase of the property and only afford to restore a small portion of the house before running out of funds.
2.) In many cases the cost of repairs can be financially problematic. If the house needs a new roof you can be looking at a cost in the neighborhood of $10,000 or much more depending on the property. The same approximate cost goes for foundation repair, re-plumbing or re-wiring a property, depending upon its size. These types of repairs are usually up front costs that have to be paid in large lump sums, not like the set house payments of $600 per month you may be used to. Call contractors and ask for bids or price the materials necessary before buying to see what kind of expense you may be looking at.
3.) Financial institutions may be leery of providing loans to restore a property if it is dilapidated or blighted. Call around and check into what type of loans are available before you buy.
4.) Insuring the structure, it can be difficult to find a company that is willing to provide Builder’s Risk Insurance. Call around to check what types of insurance policies are available to you before you buy.
5.) If the owner cannot finish the restoration and the property is still in violation of City Code, the Property Maintenance Department may start assessing fines to the owner for not finishing the work in a timely manner. Contact the city’s Property Maintenance Department, (816) 271-5342, prior to buying an old structure to check and see if there are any issues involving current code violations involving that structure.
6.) Also keep in mind the cost for clean-up prior to starting the restoration project. There is always the potential of lead abatement or cleaning mold problems just to name a few.
7.) If you plan on doing the work yourself, keep in mind that restoration takes a lot of time and energy. You will also need to contact the city’s Customer Assistance Department, (816) 271-4751, for obtaining required permits. Some of the work may call for licensed professionals; call before buying.
At this point, the owner has invested all of their hard earned savings into a house that they cannot live in because it in violation of City Code and does not have a Certificate of Occupancy. This is where the restoration burn-out occurs and the owner often loses interest; yet because of their investment in the property they are unwilling to sell it along with their unobtainable dreams of owning a beautiful, old historic home. Subsequently, the old property often remains unfinished and sits dilapidating further until it has to be demolished along with the investor’s savings.
As
St. Joseph’s Historic Preservation Planner, I want to see as many of these old properties saved, but I must stress that if enough funds are not available the new owner could find themselves out of their life savings without anything to show for it. I have seen what I have described here happen a number of times and try to convince investors of the potential dangers of under-investing when dealing with the restoration of these historic properties. Please research the cost of restoring an old structure prior to jumping into it with both feet, because you could be jumping into a money pit.
The city does have a Save Our Heritage grant program and a historic preservation loan program. You can find more information on these programs on-line at www.ci.st-joseph.mo.us/planning/histpres.cfm. As of now, there will not be any money in the Save Our Heritage grant program until next fiscal year starting in July of 2009. Feel free to turn in completed SOHG applications to me at any time before the deadline by no later than 5:00pm central time, Monday, June 1, 2009.
While you are on the historic preservation web-page, please check the
Hall Street
and the Museum Hill Local Historic District maps to see if the property you are interested in is located within one of those two districts. If the property is located within one of the two local historic districts, look over the Design Guidelines that will determine how you will be able to go about restoring your property and the Certificate of Appropriateness process. If you do not have access to the internet you may reach me at (816) 271-4797.
Posted by: admin on Sunday, October 5th, 2008
Filed under: Investing in St. Joe,
General |