- There's no question.
Old houses are filled with character.
Keep away from five-minute trends.
Keep true to the house.
And then consider yourself a steward of it
in a greater timeline.
- My guests today are Elizabeth and Ethan Finkelstein,
the couple behind "Cheap Old Houses."
You may have seen 'em on HGTV,
or if you've fallen down the rabbit hole
of their Instagram feed,
you know the dream they're selling:
beautiful old historic homes with great bones
at prices that actually make sense.
Welcome back to "Own It."
I'm your host, Angie Hicks, co-founder of Angie.
On this show, we talk about what it really takes
to own your home without it owning you.
Buying a cheap old house isn't just a fun side project.
It's actually a big financial decision
and a lifestyle decision.
It can also be a structural decision too.
Elizabeth and Ethan will walk us through
how to assess one of these properties,
how to finance it,
and then also whether you should pick up
that paintbrush yourself
or whether you should leave it to a pro.
What I really liked about this conversation
was how they taught us to think differently
about what home ownership can look like.
(air popping)
Elizabeth, Ethan, welcome to the show.
I'm so excited to chat with you.
I would love to just start out
with how you all got started with "Cheap Old Houses."
What was your inspiration,
and what led you to, you know, to building cheap old houses?
- It's kind of the only thing we can do.
I know that sounds crazy.
I do really believe
that we're all put on this earth to do something,
and I think we feel very much that it's in our blood,
and I guess it took us a little while to find that thing
although old houses have been in our lives forever,
but, you know, for us it was really a combination
of feeling like acquiring a house is a pipe dream
for so many people,
and loving old homes,
having grown up in them, working with them,
I have a master's degree in historic preservation,
and just understanding
that there is so much housing stock out there
if you're willing to think outside the box.
It was sort of our sort of house hack solution to a problem.
- We were posting old houses for sale
at all price points on social media
a little over 10 years ago,
maybe like 15 years ago now.
- Oh, gosh.
- Elizabeth was posting these houses,
these cheap houses that she found
on "Country Living Magazine,"
and then we started our own blog on "CIRCA Old Houses,"
and it was a fan favorite every single week,
and it went viral every single week,
these cheap old houses.
And we were, at the same time,
looking for a cheap old house for ourselves to fix up
and not flip per se, but to live in.
And it was sort of just this pipe dream.
We had always wanted this for ourselves,
and I think the moment that we knew we hit something
was when "New York Magazine" wrote about us
about four years after we posted these cheap old houses,
and they wrote a four or five page essay
on cheap old houses,"
and this beautiful thing that people buying these things,
and they said, "Would you change your life
"for a cheap old house that you saw on the internet?"
And that was the moment that hit us,
where we were like, "Wow! Like people are doing this.
We're not just posting this on the internet.
People are home shopping on our Instagram feed.
- So I know I might hit on a sore point,
but I'm going to go right to the heart of this.
So, Elizabeth, I know that you get really upset
when people say that old houses are money pits.
Tell me why.
- (sighs) Angie, you know, we've talked about this before.
(Ethan laughing)
(all laughing)
I know that you and I have had many a conversation
about old houses being money pits.
I would say this.
All houses need maintenance.
New houses need maintenance.
Old houses need maintenance.
I would rather work on a house
that has materials that I can fix
versus new materials: aluminum, vinyl, plastic,
things that you can't repair
and that have to go in a landfill.
I think the notion that old houses require more
has a lot of nuance and isn't necessarily true.
I know plenty of new houses that are built poorly, terribly,
went up very quickly with cheap materials
that might not need a ton of maintenance now,
but, in 10 years,
I don't want to be the owner of that house.
- Are there things, when you think about,
you know, kind of, if you're thinking about
going in and saying, "Hey, I want to own an old house,"
like what do you need to assess in yourself
whether you're going to be a good old house owner
because I think some people find it intimidating
quite honestly, right,
because they're just like, "Oh, this is a project.
"This is a labor of love."
What makes me a good old house person?
- I think you have to have the love.
I think, just from a very superficial standpoint,
I like to say, "Are you the kind of person that thinks,
"'I want go to the beach every weekend?'
"Or are you the kind of person that's like,
"'Wow, I can't wait till the weekend hits.
"'I've a lot of projects I want to work on.'"
I think there are two kinds of people,
and if you're in the right camp there,
that's a starting point.
- I think that that's the real thing
is if you enjoy the projects
and you enjoy working on your house,
and, you know, if you have young kids, you're home anyway.
It depends on your lifestyle
and where you are in your life and your season of life,
but if you are a beach person
or, you know, someone who likes to fish,
you know, hopefully you have a stream in your backyard
or the beach outside.
(Angie and Elizabeth laughing)
(all laughing)
- So, for someone who's listening
who might be considering buying an older house,
who doesn't know if it's worth investing in,
what's the first thing you would tell them?
- I would look at the structure itself.
I think you have to make sure
that the structure is in good condition.
It's very easy to fall in love, speaking from experience.
with all the pretty stuff.
There's no question, old houses are filled with character.
It's what makes them pop on Instagram.
It's what makes us successful. People love it.
It taps into sort of this nostalgia and beauty,
and they love that.
It's very easy to fall in love with that.
And I think if you're looking at a house,
you have to understand
that if what you're buying can fit into your lifestyle,
either you have to have enough money to fix it
if it needs extreme repairs,
or you have to be handy and crafty
and have the time to be able to do that.
And it also depends on what the house needs.
So if the house has active water issues,
you need to be able to seal them up.
If the foundation requires, you know, heavy lifting,
that's something that you can consider.
If there are just aesthetic problems,
and you have a lot of patience,
and you can work on your house over time,
I mean that's a great buy.
I think also if you're buying,
this is an, you know, age-old adage,
but if you're buying the worst house on the best block,
you know, that's going to go far for you.
So there are a lot of factors to consider.
I don't think this is a one-size-fits-all answer.
- All houses are going to take some investment.
I think looking at the cheap or affordable price
or cheapest house on the block
is always sort of a good nod to
if you can get a little bit of value out of it.
So, you know, we don't like to look at houses
as investments, personally,
but obviously that's a big, huge part of it
in terms of home ownership and trying to acquire, you know,
that wealth and have that house gain for you.
So I think the bones matter a lot.
I think, yeah, buying the worst house on the block
can sometimes work
as long as you're smart
with the maintenance and the repairs.
- I will say too, there is emotional investment.
I think this is a place you're going to be in
every day of your life,
and you need to love it,
and there are certainly times
when we have worked on old houses
where we're probably not going to get back
what we put into it,
but we love the thing we put in, and it's our house,
and it's, if you think of houses just as, you know,
sticks and stones and sort of just materials
that are very transactional,
you're going to have a different approach
to what you think of an investment as being.
- Sometimes it is hard to define
where kind of your financial head stops
and your emotional heart comes in and plays in this.
When you're talking to people that are redoing houses,
like how do they think about that?
I mean, because it is honestly,
it's like there's an element of how much enjoyment
you get out of the home while you're living in it.
- I think it's a few different factors.
On the barometer scale,
we know we're like 70% emotional and 30% financial focused.
I think you have to know where-
- Which one of us are you talking about?
(all laughing)
- Well, we both have, we both play our parts.
- That's why we make a great team. (laughs)
- And there there's a part to that 70%.
Maybe I'm 50%, and Elizabeth is 20%,
and, you know, or she's 50% emotional.
(Elizabeth laughing)
But, you know, I think you try to find that balance
and find out where you are on the barometer,
especially when you're buying that house.
And then things also do change.
You know, if you're in the house for 5, 10 years,
a lot of stuff is going to change,
and if you're deciding to stay,
or if you're deciding to go,
so I think the seasonality of just living there
and focusing on kind of how you live there
and if you're going to stick it for the long term.
- You both have seen so many of these old houses.
What are things, what are features you're like,
"Hey, this one's got real potential because of X."
- Yeah, I think anytime a house is in truly original state,
I get very excited,
and I know our audience does as well.
You know, when the original features are in the house.
If a house settles over time,
its original windows settle with it.
They're shaped like the house, the features that are in it.
And they say, right,
there are no right angles in old houses.
But the things that were there in the beginning
have shifted and formed with the house,
so that nothing will fit better
than the original features in a house.
So we always try to encourage people,
if you're buying a house, to keep those bones.
Anything affixed to the house,
save as much of that as you possibly can.
And then your own personal stuff in the house
that's movable, have fun with that; express yourself.
If it doesn't go with the era of the house but you love it,
you know, that's not as important to us,
but you are not the only person
that's going to live in that house,
and, fortunately, the people before you living there
didn't muck it up before you,
and that's why you have this beautiful, you know, thing.
So we say keep away from five-minute trends,
keep true to the house,
and then consider yourself a steward of it
in a greater timeline.
- Sometimes you can find these little gems
with some modern LVL flooring over,
and then you have the old wood floors underneath.
So that's something easy.
You can kind of peek in the corner.
Or maybe you have carpets.
So that's a really fun one to have,
old original flooring in the house.
I think old fireplaces, old mantles,
obviously the newel posts when you walk in.
Original windows, we like,
but some people might want that more modern window,
but I think a lot of these houses, you're coming in,
and potentially there's hasn't been updating
of plumbing, electrical, sometimes HVAC systems.
So those are the core things.
And insulation, you know.
I think it depends on
if these houses have had some of that updating
and some of that love.
So those are the things that, you know, aren't...
Those are the financial, non-emotional side of things
that if they have been updated, that's amazing.
- I'm a big fan of fireplaces.
Like I think those can be,
like, those can make make a house.
I have one that I like a lot in my house,
and I'm just, like, if we change the house,
I think I would reconfigure around it.
- So in our fixer upper that we bought for $70,000,
you know, I think most people design their beach home;
we're designing our winter home
where we have seven fireplaces in this place,
and we are designing it around the fireplaces
because we love that hygge sort of, you know,
very warm, cozy.
We live in the northeast; it's very cold.
It was really cold this last year,
and, you know, I think we like to plan around the fireplace.
- Fireplaces are one of those things
that in all the advancements
and all the things we've done in homes,
fireplaces are kind of the same as they've been, (laughs)
you know, 300 years ago.
It's just fire heating your house,
and I think that people love how real that feels,
and there is a reason why you and us,
and we always want to kind of gather around that.
- I feel like it kind of helps
to replace the phone in your hand,
and you're like, "Ah, I don't need that.
"I can cozy up with a book and get back to real life."
I think Gen Z is coming into this
where they want real experiences.
- Hey, we want to actually have something that we can feel.
Right.
- Right.
- So, Ethan, you said you bought your house for $70,000,
which, you know, that is like, "Wow!"
to buy a house for $70,000,
but walk us through what the budget looks like.
When we're looking at a house that we see on your Instagram,
and it's, you know, $70,000,
how should I be thinking about that
as far as like over the first couple of years
that I'm owning it.
Some of those $70,000 ones might be livable; some may not.
You know, what's the path?
- Well interestingly, Ethan,
if you could talk to,
we have a really good example of this
because we just finished a house for Ethan's mom
that we bought for $27,000,
and we just wrapped that project,
so we have all the numbers,
and so I think that, for us too,
that was an interesting test case
'cause it was really full circle for us
in talking about that.
- So, for us, that house, you know,
this was a soup to nuts house.
This is a...
It needed everything.
So I have a great perfect budget.
It's a 2,400 square foot house, three bedrooms.
It's sort of your average home from the 1880s, 1890s.
We bought it for $27,000,
and we worked on it for about a year and a half,
and the first phase for us
was really structural, foundational, and systems.
So we needed to get the basement up and running.
We needed the floor joists to be up and running.
Many of the floor joists on the first floor were not good.
This is a very low, a high-level water,
high water table area,
so there's a lot of rot that kind of started to come up,
but the old bones, the main sticks,
were all in great working order.
So we spent $50,000
on all structural and leveling systems
and then some exterior painting.
So that was where we landed for some concrete work,
basement-leveling work, and putting our basement joists in.
Then the next 50, I would say, was in systems:
plumbing, electrical, HVAC.
So HVAC is about 15,20,
and then you have electrical 10 to 15
for whole house rewiring,
and then plumbing about 10 to 15 as well.
So just in terms of looking at those,
and then we're talking drywall, trim, millwork, paint,
and that's the last 50.
So we spent $150,000 on one of these soup to nuts projects.
I hope someone out there buys a house
that's cheaper and has more things
than we had in this home, (laughs)
so they could be a lot more advantaged
in terms of their budget.
Obviously you can spend much more.
Our $70,000 house is a personal pet project of ours.
So we're doing a lot of things
like these seven fireplaces
that no one needs in their house,
(Elizabeth laughs)
but we are doing it.
So it's a little bit of a specialized project that.
- We plan to be there forever and ever and ever,
so it's for sure something that we're investing.
- You're doing it for your life,
not for, yeah, yeah, not for others.
- But what's amazing, I'll say,
in terms of the financial component
for my mom and her setup
is that, you know, we got a construction loan
to get this $150,000,
and we're paying 6.5% on it,
and that's equals to about $1,100 a month,
and we got into the housing game with that house
by paying it $27,000 and paying it off right away.
So we didn't have a mortgage on the home per se,
but we did have a mortgage on the construction,
and so we're going to be stuck in this for five years
paying this $1,100,
but if we wanted to bring it to a 30-year mortgage,
we could get the payments down to like $600-$700 a month
which is wicked affordable for my mom,
and just, I think, a solution for folks
who are looking for affordable housing
just all around the country.
We have these houses that are really all around the country,
and I think this is a really fun solution tool capability,
but it's been a fun case study and test for us.
- Do you feel like you have to be a DIYer
to tackle an old house,
or is this something
that someone that is going to hire it out,
or do you get your finances upside down
if you don't have a knack for kind of hanging drywall
and things like that yourself?
- I think you need to prioritize.
So I think you need to know what your skill level is,
and you need to know what your bank account looks like,
and parse it out.
So I absolutely do not think you need to be a DIYer.
and I would suggest not DIYing things
that might burn your house down. (laughs)
(Angie laughing)
So I say that jokingly,
but one of the,
you know, - It's true.
one of the things that often
it's not the old house that's the problem.
It's the thing that the guy did in 1984
where he, you know, connected something wrong in a new part
that messed up the old bones of the house.
So I do think DIY can be as detrimental as it can be great,
and it can be very great if you find yourself handy
and you like doing it
and you want to learn the things.
We have people in our "Cheap Old Houses" community
that have figured out how to DIY everything,
and they do not come from contractor backgrounds.
So I do think it's possible,
but we don't feel any bias one way or another.
I think it's specific to your case,
and if you can afford to pay an expert,
by all means pay that expert to come in and do it right.
- I think, regardless, you're going to want be involved
because you're going to want to do some paint,
you might want to do some stripping,
you might want to do something
and find out where your place is in it,
so I think just not shying away
because there's going to be times
where your purse strings are a little tight,
and then you're going to want to spend more on something
and get it moving fast 'cause you're busy.
- My takeaway from this
is be super honest with yourself about whether you can DIY.
This is not a time to kind of, you know,
kind of stretch your truth, right?
If you're in over your head, hire a pro,
and then also it's a great time to be curious.
It's a great time to be curious about what they're doing.
You should invest in time with that contractor you're hiring
so that you can pick up some tidbits along the way.
- Oh, yeah.
Home ownership is such a journey,
and it's like raising a kid, you know.
You keep learning as you go.
There's no manual per se. (laughs)
- There is no manual. That's exactly right.
I tell people that there is no manual
for owning a house and maintaining it.
I lived, 20 years ago, in a 1920s house.
I would tell people, I was like,
"That was my favorite house."
But we ended up moving, you know, to the suburbs,
to a newer house when I had my second child
because we didn't have enough space.
I don't know that I'm alone in this, right,
that the old houses, you know, kind of their structure.
So, you know, people like bigger bathrooms.
People like bigger closets.
So what's your take whether you invest in a larger bathroom
or a larger closet in a house,
or does that cross the line
of staying true to the integrity of the house?
- I do think it is okay to retrofit houses
for basic modern needs.
There are things that some old houses just don't have,
but I think you can do it sensitively.
I don't think that adding a closet to a house
necessarily means completely destroying the character
of the house.
When you add that closet,
look at the millwork in the house,
look at the height of the other doors,
try to align it, try to match it up.
You know, if you're just removing a corner of a room,
it's okay.
Old houses, in many cases,
have been added to over time,
and those are sometimes the quirks of them
that we love the most, right,
like the pink 1920s bathroom in the 1850s house.
It's really fun now 'cause it's a vintage
even though it might not be original to the house.
I do think that you can do it sensitively,
and I don't think the conversation should ever be,
"Don't do anything.
"Don't change anything in your old house,"
because that just creates, you know,
a world in which people can't evolve.
And I think people need to be educated
and really think about how to retrofit these houses
to modern living for sure.
Another thing that you didn't mention
that are very different
than how we used to live are kitchens.
In Victorian houses,
the kitchen was considered dirty, off-limits.
It was all the way in the back of the house.
Now we have kitchens,
that everybody hangs out in the kitchen.
It's in the center of the home.
So how do you think about that?
And it doesn't necessarily mean
that you have to rip out whatever room
is in the center of the house of the house
and put the kitchen there,
but you can definitely think about ways
to integrate the kitchen more into the home,
and that's not a bad thing at all.
The $70,000 house we own is from the late 1700s.
It's quite old.
And even back then,
when they needed more space,
they would just add on to the house.
They didn't have a mentality that you keep the house frozen.
They would add on.
And so when we needed more space in that house,
we did exactly what they would've done back then.
So the idea of evolving a house is not wrong,
and so, it's for sure okay to do it,
but always do it with the character of the house in mind.
- Yeah. That's great.
So you've built a community
of nearly 3 million people that are following you,
checking out your cheap old houses that you're posting.
What are people most excited about,
and what are they looking for right now?
- I think people always get obsessed
over the unique properties,
something that is on a lake or a mill or a bank.
(Elizabeth laughing)
These odd properties, these are always fan favorites,
and they're always cheap over at "Cheap Old Houses."
- It's always a good idea to spend beneath your means.
But I think, too, in this AI world,
we see people really digging deeper into authenticity,
and that is something that these houses have.
These houses remind you of a past time,
or they remind you of, perhaps,
the kitchen that your great-aunt had
that you're, like, "Oh my gosh,
"I've totally been in that kitchen," (laughs)
And I think that there's something
that is grounding about that for people.
People love a good time capsule,
the kind that looks like the lady left the house in 1947
and just never came back, (laughs)
and it's just,
- Oh, yeah.
- as it is.
And I think the combination
of these houses being cheap and being old
kind of leads to an interesting study
in that a lot of them are in places
where the property values are lower.
There might not be as much sort of disposable income
for people to be updating their house constantly.
So, because of that, they have the same kitchen
that they had for 70 years,
and so they're kind of a window into another time.
In a world where you're scrolling,
and you're constantly seeing things updating,
and, you know, these are kind of like the befores,
and there's something very soothing about that for people.
- So I have a practical question for you.
I've been on your Instagram feed.
I've seen some houses.
And I'm thinking about this.
I'm like, just the practical process
of going through buying a house like this,
'cause it's probably not near my house today.
How do I have the support that I need
to kind of make that decision
if I'm kind of jumping into an old house for the first time
'cause sometimes you've got to make a decision quick
on whether you're buying or not, you know,
especially if it is priced at a really interesting price.
What do you suggest to buyers who are venturing out?
- I think we've heard all the stories
of how folks have acquired these houses.
Some folks actually get in their car,
and they make an appointment with the agent.
So the first thing is,
you gotta contact the agent that we list on the post.
So you're going to contact the agent directly.
You might be able to have them do a little video tour,
or they might be able to give you
a little bit more information.
So you might want to just kind of contact them,
see what this house is about,
get a little bit more information,
see if it's a project you're worth taking on.
And then you're going to really want to see it.
Try to avoid taking on a project
that is across the country from you
unless you're going to move there.
- Or you have family there that can work on it for you.
I think you will begin to resent it.
And that's a mistake we haven't made yet
but we have nearly made,
and I think we've talked ourselves out of it many times and-
- But when we first bought our fixer upper,
I was driving three hours away from the family,
and I, you know, I was able to stay with family
when I was working on the house initially,
but it was like, "Oh, I want to also be home
"or near the family."
- So maybe the fixer upper isn't the thing
that causes you to move across the country.
Maybe you just need to expand your circle.
So if you live in a metropolitan area,
like what towns are within two hours of this area
that, you know, might have some interesting finds.
- Definitely.
- Well and if you can live in the house
while you're working on it,
that will make your life easier too.
If you can at least make one or two rooms livable
and then be able to work on the rest of the house,
that will change your situation.
- I think another point of support
is if the house has enough systems and services
that you can get a mortgage.
That's, you know, a lot of times,
these cheap old houses are cash only,
or, you know, you have to fix 'em up,
and they say, "Bring your contractor."
(Elizabeth laughing)
And so I think if you have enough systems and services,
that kind of gets you,
even if it's $100,000
or, you know, under $200,000,
you're kind of getting that support
to kind of work on the house while you're in it.
- Yeah, let's touch on that one more time there, Ethan,
'cause I think that's important.
So to qualify for a mortgage,
a house has to have certain criteria.
- Right.
So the house has to have electrical heating and cooling
or potentially just heating
if you're in the northeast anyway or in a colder climate,
and you need a kitchen and a bathroom.
So you need some basic systems to qualify for a mortgage,
and if your fixer upper has those,
you can get assistance from the bank,
and that kind of gets you in the house
so you can work on projects a little slower.
- So you might, when you're debating, it's like,
"Hey, do I want the $20,000 one,
"that I'm going to have to pay cash for,
"versus spend a little bit more
"and find one that I could live in."
You might opt to do that.
- Right.
- Which brings me back.
You know, you all have said
that we were thinking about the American Dream wrong,
and I think you're actually pointing to something that,
you know, it could be much more accessible, you know,
when we think about kind of taking advantage
of the cheap old housing stock
that people have kind of left and forgotten.
So tell me a little bit about that.
- Well, there's just so much of it,
and I do think it takes opening your mind
to maybe different locations,
but we found in the sort of post-COVID world we live in,
where there is so much remote work happening,
and, you know, we live in a very sort of rural area,
and it has a very high percentage of entrepreneurs,
so people doing all sorts of things:
craftsmen, contractors.
You know, they run their own businesses,
and so you do have opportunity to move
wherever, you know, you want to be.
And I think, I just think our world,
we're feeling a little bit kind of grossed out
by, you know, you order something new,
and it comes to you,
and it's wrapped in so much styrofoam,
and all of that is going into the landfill,
and the thing you bought, you know,
that took forever to get to you, isn't even well made,
and I think we live in a very disposable world,
and so a lot of people are becoming more and more anxious
to sort of get something that's going to outlive you,
that you can nurture,
that feels worth investing in.
I think the idea that instant gratification
and you can get everything quickly,
I think that's exhausting for people.
I think people are overwhelmed.
Yes, you can do things instantly,
but do you have to do everything instantly all the time?
I think the alternative lifestyle we're proposing,
which is to slowly and methodically
and with intention and with saving money,
work on your house,
is great permission to throw that philosophy out the window
and say, "You know what?
"I'm just going to take my time with this."
I think people really want that right now.
I think it's exhausting. (laughs)
- I think for us, I think that for us,
I would call us elder millennials.
So we were maybe one of the first generations
to really go through a digital evolution
and to be burnt out by it,
and then to want to retire
by painting and doing things methodically and slow.
I think, as the younger generations come up,
and we are scrolling constantly
and just constantly exhausted
and being blasted in information in digital,
we are going to want more human experiences,
and I think that's what this allows us
is the capability for slow methodical thinking
and intentional living
with things that are beautiful around us
that we want to be surrounded by
instead of just the scroll.
- Great. That's great.
Awesome. Well this has been a lot of fun.
It was good to catch up.
- Great to see you.
- Thanks, Angie.
- Here's what I'm taking away
from my chat with Elizabeth and Ethan today.
On the surface, this feels like a conversation
about budgets and basements,
but it's actually more than that.
It's a new way to think about home.
It's slow, it's intentional,
it's something meant to outlast you.
And for a lot of people right now,
that feels less like a renovation project
and more like a relief.
But as it turns out,
that philosophy has a business case too.
Know where you land on the financial to emotional barometer
and be honest about it.
Folks that thrive on these projects enjoy the actual work,
not just the result.
So you need to clear your weekend calendar.
The phrase that really stuck with me was actually
"to consider yourself a steward in a greater timeline,
"not an owner."
That's a real mind shift,
and it really makes you rethink how you define home.
Thanks for watching "Own It,"
and if you enjoyed today's episode,
please subscribe and give us a review,
and don't forget to share it with someone who could use it.
No matter what house you live in, live in it
like someone's going to be living in it after you.
Skip the five-minute trends.
Save the bones.
I'll see you next time.
This is Angie Hicks with "Own It."
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