Welcome randyjackola ! Great question, older masonite siding had problems with water damage especially low down on walls where rain could bounce back up after hitting another surface and splash against the masonite. I see that there are new similar sidings coming out the last couple of years, time will tell if they are any better! Anyways back to your question of removing and replacing rotted masonite siding.Depending on the extent of the rot I would typically go past the rotten areas by about 12" more so as to be sure that I got it all.Use a square to mark a square line vertically at each end you want to cut then use a circular saw to cut as far as you can without making a saw mark on the row above or below the one you are cutting. Remember to set the saw depth so that it does not cut to deeply into the wall cavity behind the siding.Use a prybar or your hands to pull the bottom edge of the siding you just cut free from the wall. You can now use a recipricating saw with a long blade to reach up behind that piece toward the top edge and cut the nails that will be holding it.You should then be able to cut the last bit of the vertical cut you could not finish before.Use the recip saw for that.Now you can measure and cut the replacement piece to fit and slide it into place.You will need to face nail through the bottom edge of the row above where you are working at the point where the two rows overlap using a "hot dipped" galvanized siding nail.Add other nails where it seems necessary. Also use a good quality exterior caulking along the two vertical joints to help seal it up.Hope this helps you and good luck.
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