I spent this last weekend showing some clients homes that they could buy for a lot less and have renovated. We looked at homes in various stages of disrepair; from needing just some modernization to needing completely rebuilt. As I was pointing out the pluses and minus of each home and giving them ideas of what we can do in their budget, we were in a completely stripped and gutted home when the wife says to me.. "this home has a lot of rotten beams". My response was that likely a lot of the other homes we saw had rotten beams too, but we can not see that under the drywall. The best homes to renovate are those that are either already stripped to the studs, or ones you are going to tear out the drywall and replace with all new drywall. The reason is you get to see what beams and studs need replacing. It is the home that was the ugliest to begin with and needs the most work that gets all the attention. Renovated to last another 100 years.
Letting the lender pay to renovate your home through the purchase transaction
I have clients that look for months and months and can not find a house in the area they like, in their price range ,that is acceptable. What they want in updates, well their budget just does not allow. This is not a problem though, as I have lenders who will finance the cost of the repairs and updates into the purchase loan. For example; I had a client in Spring, TX who's max budget was $215,00. Her wish list was 4 bedrooms, 2 baths, granite counters throughout kitchen and baths, all wood floors downstairs, minimum 2000 square feet and a large backyard. The problem was to get all these items was near impossible even over the budget, as all wood floors is not as common in this area. Everything we looked at was dated and wither too small or only 3 bedrooms or way over budget. What we did was found a house where the home layout and backyard and location were perfect (as these are not items that can be changed) and then we changed everything else! Large kitchen had laminate counters, we made them granite with a granite composite under-mount sink and a beautiful backsplash. Cabinets were solid wood but they this orange, honey color, we had them painted a bright white. The other 2.5 bathrooms received new granite counters and new under-mount sinks and new faucets and toilets. The entire house was really dirty, old carpet. We had the downstairs carpet removed and laid hand carved manufactured wood floors down. The tile in all the bathrooms and laundry room was old and the grout was nasty. We removed it all and put down some more modern 12x36 dark gray tile. Upstairs got all new thick plush carpet from Lonesome Oak Flooring in GA. (If you have never heard of it check them out, amazing carpet for the price) Fresh paint on all the walls and new molding. Took the closed in stairway banister and opened it up with a gorgeous wood railing in order to make the room appear bigger. The home was a 3 bedroom plus open office. We enclosed the office with double doors and the coat closet in the hallway was closed off and opened up into the old office/new bedroom.. House price was $184,000 contractors bid was $27,000 to do all of this including labor and material. Final Purchase price was $211,000 and renovation only took two weeks. In the end the house value is now a lot more than that instantly. If they wanted to list it tomorrow they could do so for at least $235,000. The point here is that when looking at homes, the only really important things to focus on are the neighborhood, layout and lot, because as long as the house is priced to take into account the condition, then the condition can be remedied. This is especially important for first time home buyers who do not have a lot of extra money to do these repairs after closing. This one was a FHA loan, down payment was only 3.5% of the $211,000 purchase price.
reflecting back
I was 23 when I purchased my first home in Seattle. It was 820 sqft with 2 bedrooms and one bath. This home had two things going for it: one, it was a 20 minute drive to downtown and two, it had both an attached and detached garage. You see where I am going with number two? No way a growing family of 4 could survive in an small 2 bed/1bath, but add 400 sqft more onto it and it was doable for a few more years. And that is just what I did. Cut my construction teeth on a little home in Seattle. I learned how to hang drywall, cut baseboard and crown molding, lay tile and install windows.. this was in the days prior to goggle.. I spent my weekends in Home Depot, getting a part time job there crossed my mind.
Fast Forward 20 years and 2000 miles, living in Houston now and I no longer inhabit the homes I renovate (have to keep my sanity somehow). I have a process that works well, though I am always looking to improve it, hence this blog.
Because we all have to start somewhere
I am told I have a lot to say, and there is so much bad information out there regarding not just flipping homes, but home rehabs and remodeling. Where does the money come from? Where do you start? For someone wanting to get started it can be very daunting. I had to stumble my way through, and I am still learning as I go. There is not one project that I complete that I do not have a notebook of tips, tricks and advice for the next project.. does that make me not qualified to write about this? I do not think so, as if you ask anyone who has owned their own company for years, they will be the first to tell you that they are constantly learning, growing, changing, and rewriting their game plan. I just like to think of it as my next rough draft..