Practical Architecture: What I bought - spotting diamonds in the rough

What we almost bought

This was at a point in 2016 in Oslo where a lot of apartments would go before the viewing through private bids, so-called “couping”. The market was insane and people were buying apartments for 4-5 million NOK unseen!  Statistics showed that the housing market in Oslo rose by 23,3% in 2016! (Norway in total by 12,3%)

We were open to explore different scenarios. Urban and pedestrian friendly, or more remote and closer to nature? Small townhouses, or efficient apartments? It was all about the perfect combination. I was mostly looking for somewhere I could apply some practical architecture and take theory into practice, but then I found this 50sq.m pearl done by Bonum:

Sleek white minimalist deisign, fancy modern interpretations of arks in the living room

Black kitchens and a rooftop balcony to pop the Crémant on after a long day.

A freshly refurbished loft in an old courtyard block, with white stained, wide-spaced parquet, fancy slim arcs clad in white stained plywood. A black sleek kitchen, a little outdoor nook, 2 bedrooms, bath, and large open living spaces. Facades on two sides, giving plenty of daylight. And even if the formal square meter number was low, the floor area was actually huge due to the slanted ceilings.

It was located in a calm, yet an urban area of Oslo, and I was in love even before I saw it in person.

So I decided to jump on the zeitgeist and YOLO coup it. Unseen. Before the open house. I sent the realtor a mail a week before the open house telling him I would like to buy it privately for 4.5m NOK unseen. The realtor took it to his clients, but I didn’t hear anything from him for a few hours, so I got on with my life and went out for drinks with some friends. at 11 pm the realtor called me back and told me the sellers made me a counter-offer of 4.6mill. 

Me, being the responsible kind of person that bids a few million for an apartment unseen, decided that this didn’t seem like a bad idea, and told the realtor that I would like to accept the counterbid, on one condition: That I got until the next morning to sober up before officially accepting it. I figured I had done my share of drunken shopping on Amazon, and decided that to escalate that to real estate perhaps wasn’t a pattern I would like to nurture.

As the realtor and the client did not want to give me until the morning to answer, the deal fell through the deal, and I decided not to be the kind of Oslo stereotype that buys apartments over the phone with borrowed money holding a glass of prosecco at some douchey bar at Vulkan.

So where is what we actually bought

Wallpaper for days

Yes thats real faux grass in the hallways

Slightly dated kitchen

Fancy bathtub to soak in after a long day of …who am I kidding, we were never going to touch that tub.

Now, why would we buy this?

Honestly, we found it at a price where I could design it to be whatever I wanted it to be, not like we were going to keep the bathroom or anything right? It was priced in such a way in the market that when accounting for the potential costs of refurbishing, I’d at most land on average flat market value for the area.

We paid 4,550,000 NOK for this apartment (that’s 555,340USD for anyone curious at the time of writing). Which placed the price per square meter at 49,450NOK. I checked comparable, but fresher apartments in the same zip code and area, which gave me another key number: The average price/square meter in the area was 60,000NOK at that time.

So assuming the apartment was fresh and “at market value” I’d be worth 5,520,000 NOK at the time of our purchase. That meant that I had a budget of 965,000 NOK to refurb for, just breaking even with the average market. To me that was plenty of time to maneuver, we’ll get back to some budget numbers in a later post.

Cost and budget:

price paid: 4,550,000 NOK

price/sqm: 49,450 NOK

average price/sqm in area: 60,000 NOK

assumed price if “at market quality”: 5,520,000 NOK

budget to play with:  965,000 NOK

You can do a lot with an apartment and a decent budget. and I knew my girlfriend and myself were ready to invest massive sweat equity into this place. So after some deliberation, and passing on a third apartment I managed to talk my girlfriend out of buying something liveable and instead investing in this piece of shit together with me. It had good bones. It had a great location for us, close to subways, quiet, child-friendly, close to nature. Buying child-friendly as a DINK couple made sense for several reasons, we could obviously in the future be considered children, but also it’s like buying a station wagon, you’ll always be able to sell a station wagon to a family in a few years right?

I checked my directions, the apartment had two balconies, one smaller east-facing one, with morning sun until noon (the breakfast balcony as it later became) and one huge west-facing one, that was sunny until it set behind some neighboring buildings late in the summer evenings. It was a dual aspect apartment, so even though it is deep (13m deep, plus covered balconies) it had good light and potential for creating a draft through on warm summer days.

And lastly, the number of openable windows, our key metric for “number of bedrooms”-potential. We had 4 windows spaced in such a way that they would work as great bedrooms, on top of the balcony door and windows for the living room. So for those of you that are good at math, that’s an apartment sold with 3 bedrooms, with a potential for a 4th. And that my friends, is one of the surest ways to increase value in the apartment housing market today!

Next time we’ll go over the key identified potentials, we’ll have a real look at the plans and why they shone in my eyes like gold when I saw them, and we’ll talk about the greatest tax loophole in Norway since before WWII