Can anyone tell me about the neighbourhood Ritchie

[jodijackson]

Hi all, for my first purchase as a REIN member I bought a really bad house in Ritchie. It was painted up nice but I was talked out of the inspection at the height of the boom and due to my inexperience/excitement I went ahead with the deal. I have put so much money into the place just to keep it liveable and now the house is shifting - cracks in the foundation, cracks in the walls upstairs, doors not fitting right, etc. Major problems.

I am trying to decide what to do with this property:

It is in Ritchie which from what I can tell keeps getting worse and worse in terms of crime etc., but I am Calgary so I would love some insight.

If the neighbourhood is going downhill without some short-medium term signs of improvment, perhaps I just sell as is, take my loss and lesson learned (not so great for my money partner!)

If there is some hope for the neighbourhood, perhaps I put the money into repair and then sell, or just bulldoze the place and build new. I would really like to sell one way or another within a year or two since I am finding it difficult to manage the exent of work this place needs from Calgary.

Those are the three options I am trying to weigh out but I need more information and some advice from more experienced investors would be greatly appreciated.

All the best,
Jodi

 

[DaveRhydderch]

I don`t know about the area (I`m Calgarian too), but a couple of thoughts.

1. I think you can evaluate the area. Walk the streets, get stats on crime and incomes in the area (likely available from the city). How has it changed since you first bought there?

2. Even if the area is turning around, do you want to get into the house building business? Its a different ball game, and you`ll have some growing pains as you learn about it.

3. What is your money partners thoughts? Its likely you will have to sell for a lost, are they ok with this? Have you let them know what is happening?

Just a few things to think about.

Good luck,

Dave

 

[brentdavies]

I am assuming the property is in Edmonton.

Many of the homes in this neighborhood were constructed in early 1900`s.

Is your foundation concrete or brick?

Is water penetration an issue?

Does the house show signs of shifting or settlement, ( Cracks in the plaster upstairs)?

How close is the property to Mill Creek Ravine?

Most of Edmonton is built on clay ground that is fairly stable, but some areas are shifting due to dropping water table in Edmonton.

 

[jodijackson]

QUOTE (brentdavies @ Jul 5 2010, 11:34 AM) I am assuming the property is in Edmonton.

Many of the homes in this neighborhood were constructed in early 1900`s.

Is your foundation concrete or brick?

Is water penetration an issue?

Does the house show signs of shifting or settlement, ( Cracks in the plaster upstairs)?

How close is the property to Mill Creek Ravine?

Most of Edmonton is built on clay ground that is fairly stable, but some areas are shifting due to dropping water table in Edmonton.


My foundation is concrete and we do have both water penetration and signs of settlement. This house was built in the 40`s. We are only two blocks to the ravine and one one block off Whyte and 99th. In theory the location seems good, but good enough to sink more money into is the big question.

 

[jodijackson]

QUOTE (DaveRhydderch @ Jul 5 2010, 11:32 AM) I don`t know about the area (I`m Calgarian too), but a couple of thoughts.

1. I think you can evaluate the area. Walk the streets, get stats on crime and incomes in the area (likely available from the city). How has it changed since you first bought there?

2. Even if the area is turning around, do you want to get into the house building business? Its a different ball game, and you`ll have some growing pains as you learn about it.

3. What is your money partners thoughts? Its likely you will have to sell for a lost, are they ok with this? Have you let them know what is happening?

Just a few things to think about.

Good luck,

Dave

Thanks for the input Dave, I appreciate your thoughts.

 

[brentdavies]

You have a couple of choices. You need to know what equity you have in the property, and how much can be put into repair. Or sell as is and bail out.

If the property is fairly sound, and the water issue can be corrected cheaply ( under a couple of thousand), why not do this and continue to rent out a property in ok condition, and wait for the market to rebound.

If you do nothing, then the potential for Alberta Health to issue a repair order and potential order for non habitation. Mold and water infiltration are 2 key items to avoid if possible.

If the structure is in good shape, then your choices are 1. Crack repair, and landscaping to move water away from the foundation
2. Install an interior support wall to take the weight of the building and hold the foundation from caving in.
3. Lift up the building and install a new foundation

Or sell the property for land value, less cost of house removal.

Cheers

 

[Luong98]

QUOTE (jodijackson @ Jul 5 2010, 09:59 AM) Hi all, for my first purchase as a REIN member I bought a really bad house in Ritchie. It was painted up nice but I was talked out of the inspection at the height of the boom and due to my inexperience/excitement I went ahead with the deal. I have put so much money into the place just to keep it liveable and now the house is shifting - cracks in the foundation, cracks in the walls upstairs, doors not fitting right, etc. Major problems.

I am trying to decide what to do with this property:

It is in Ritchie which from what I can tell keeps getting worse and worse in terms of crime etc., but I am Calgary so I would love some insight.

If the neighbourhood is going downhill without some short-medium term signs of improvment, perhaps I just sell as is, take my loss and lesson learned (not so great for my money partner!)

If there is some hope for the neighbourhood, perhaps I put the money into repair and then sell, or just bulldoze the place and build new. I would really like to sell one way or another within a year or two since I am finding it difficult to manage the exent of work this place needs from Calgary.

Those are the three options I am trying to weigh out but I need more information and some advice from more experienced investors would be greatly appreciated.

All the best,
Jodi


The crime rate in Ritchie and surrounding neighborhoods is one of the highest in Edmonton and that`s due primary to Whyte Ave. The police has put more patrols during the summer months and special events and is still a great neighborhood for renters and homeowners. The area has one of the lowest vacancy rate as per CMHC and is in transition.

Unless you bought the house for under $300k, it would be difficult to recover your cost of building new assuming that it was a single family house that you would build. Majority of the houses builded prior to 1960 in this area typically requires some work. It`s not uncommon to see houses with crack foundation. Find out the cost to repair will help determine if it`s worth fixing. Properties with a basement suite and a 2+2 bdrm is desirable in this area. If it comes with a garage, that`s even more of a bonus.

 

[jodijackson]

QUOTE (Luong98 @ Jul 6 2010, 12:42 AM) The crime rate in Ritchie and surrounding neighborhoods is one of the highest in Edmonton and that`s due primary to Whyte Ave. The police has put more patrols during the summer months and special events and is still a great neighborhood for renters and homeowners. The area has one of the lowest vacancy rate as per CMHC and is in transition.

Unless you bought the house for under $300k, it would be difficult to recover your cost of building new assuming that it was a single family house that you would build. Majority of the houses builded prior to 1960 in this area typically requires some work. It`s not uncommon to see houses with crack foundation. Find out the cost to repair will help determine if it`s worth fixing. Properties with a basement suite and a 2+2 bdrm is desirable in this area. If it comes with a garage, that`s even more of a bonus.

Thanks for the information. I really appreciate your insight.