Dream Big and have that coffee, eat that donut and flip that house!
Be yourself; Everyone else is already taken.— Oscar Wilde.
This is the first post on my new blog. I’m just getting this new blog going, so stay tuned for more. Subscribe below to get notified when I post new updates.
This blog is about the trials and tribulations of renovating homes. Everything that can go wrong most likely will so if you are the type of personality that expects everything to go as is from the morning to the end, then this is not a venture you should ever consider. If you’re the kind of person that loves change, problem-solving and making things work; even if the reality says they won’t, then I recommend you start flipping homes.
Can flipping homes be lucrative, yes it can. Can you lose your tail when u flip, yes you can if you are not on top of everything. This is my second flip and I can guarantee you that everything will be different than the last one. The first home you flip; you will learn for your next one! You can eliminate the possibility of the latter by doing your homework upfront. Don’t just open up your web browser one day and say “oh I love this, house I’m going to go buy it.” There’s an old adage in real estate and it’s 100%.. true..the entire idea of investing in real estate is always about location location location. You could get the best deal on a home in a bad location and sit on that house for two years and not be able to sell it. Find a little town somewhere that maybe is within walking distance to the school, low crime, has a nice yard, real estate taxes aren’t high because you won’t find a lot of investors bidding on Freddie Mac and Fannie Mae homes or REO (bank owned homes) that had gotten foreclosed on in smaller markets. Find that little town that has everything you need to turn the house over quickly; renovate it, list it; sell it and move on. Some things you should consider when you’re looking at these homes is the foundation, is it solid, is the basement dry, how is the drywall or plaster, does it need repaired, insulation, how’s the furnace, hot water tank and really really read your inspection report because Fannie Mae and Freddie Mac will give you a detailed inspection report and pay attention to those details as that makes a big difference. The utilities generally aren’t turned on but sometimes the electric is on as in this home I just bought and the gas and water or sewage usually aren’t. When some of the things in the house are deficient in those areas, those are not always deal breaker’s. That’s why it’s important to budget every aspect of the purchase. I was sloppy, went overboard, let contractors steal from me as I trusted too much and I just took too long to finish it. On this home, I was going to use a contractor that I really did trust because he was able to be there and finish in four weeks. I asked him several times in front of the realtor if he’s sure he can commit before I made the offer and he reassured me. Well after I made the offer, sent the earnest check in I decided that I could not live with his request of half the money up front for his labor. In general, contractors can ask for a down payment up front but asking for half was way more risky than I was willing to be. I told you everything is different this time around. What this contractor didn’t understand was that up front money usually covered his cost for material but since I took care of all that; no up front was necessary. I don’t know a job you walk onto and you get two weeks salary before you lifted a hammer. He kept demanding and I kept saying no I can’t do that and I’m not doing that this time. A real piece of work theft contractor stole a sizeable amount of money from me last time…be careful on Craig’s List, and I refuse to allow that to ever happen again. I stood my ground, he said he couldn’t take the job and I said good-bye. The actual person I wanted to do it works a full-time job but he agreed to do it and he said he will be done in four or five weekends so I don’t know what that other contractor was thinking that he thought he was going to get all this money and telling me it was 30 days of work for two people…..
Prior to you making your bid, you should’ve done all your homework on the real estate in the area. What sold in the last six months, what’s listed right now and for what price, and you should try to do your own comps in the area because once you buy the home, put the money in it and do all the work and the appraisal comes in and it’s not appraised near what you spent on the house: you’re in some deep trouble. The bank won’t lend more than the appraised value. That’s why it’s important to budget every aspect of the purchase from beginning to end. There are quite a few websites that will help you do that you can go to Trulia.com, Realtor.com, Zillow.com and more.
Lack of preparation in this field is the number one reason why people lose money flipping. That was me on house number one, that won’t be me on house number two. I didn’t lose money but I made $ 25,000 less than I should have because of a theft loser contractor and me taking too long to finish. Don’t listen to anyone but yourself. It could take 1 to 2 months to figure the perfect house out. I highly recommend that you spend that time finding the right home and doing your homework. I’m giving you solid advice so you don’t make the same mistakes I made the first time. This time I used Google Sheets. It’s a completely free program that allows you to use the Excel part of it to make a perfect budget out to guarantee you make your maximum profits. Make it a point to stick to budget and at the same time maximizing your choices on some really great unique things inside the home. Everyone wants something in their new home their family, friends and neighbors don’t have so go the extra in putting at least 15 different ideas in the home that gives it some serious “sex appeal”.
In my experience, when I walk into dilapidated and dated home I can envision it completed and then I think even completely updated, do I like the area, is the yard an area for children to play safe in, is there a garage and is the lay out doable. You don’t want a master bedroom in an area they have to traipse through the kitchen to get to. Some older homes are set up that way so really try to see someway you can use the space in a better way. There are a lot of homes out there for sale so set yours apart from all the others. Use the internet to look at your competition and what’s selling. Some of the things that I notice when I’m looking at homes and I know buyers are noticing when they’re buying homes is the lighting up to date and modern. No one wants to buy a home with 1960 lighting so make it current. You can look at Houzz, Pinterest or just google modern lighting, loftlighting, etc. there are some great ideas. There’s a great site, I know people….it’s in China, that has quality lighting that’s priced so reasonable that you can light your home with lights no one has but you. I really don’t like buying out of the country but let’s face it here people life is about the bottom dollar sometimes! Paint color is very important. Stay always from bold cold colors please. Homes sell better with fresh warm grays, beiges and soft yellow. Do not cheap out on a white contractor thin paint. Lowe’s and Home Depot have rebates for Sherwin-Williams paints all the time, Sherwin-Williams offers a 30% coupon about four times a month in their paint. And being cheap with the paint will just cause you to have to put four coats of paint on the wall paying a painter triple the money or spending triple your time painting however you choose to do that. When I purchase a home, I really like solid wood cabinets….but I’m certainly not afraid of laminate either. Generally the stain or paint is hideous and outdated. It’s amazing what a $99 can of Sherwin-Williams emerald urethane trim enamel will do to kitchen cabinets. I got my last can for this home 30% off. On this house we did decide to prime the cabinets first with an oil based paint. You can paint latex over oil-base but NEVER oil base over latex. Remember that! We use the spray can because it was quicker and went on much smoother. The cabinets were a very dark chocolate so we used a gray Rustoleum two times primer flat.
I know the hardware in these cabinets was amazing. We’re they dated, yes. My contractor said get rid of the hardware it’s hideous. Had I not done my research and realized that hardware on those cabinets was selling for $21 for one piece and I have 30 pieces in the kitchen. I did clean all the hardware in a white vinegar and sprayed the Rustoleum gray hammer to match the rest of the stainless steel in the kitchen. These are all dated hardware but big chunky pieces are coming in now and they’re selling them at 21 a piece so don’t just throw out every piece of hardware that you see in the house . If I wanted that type of hardware in the kitchen, and had to purchase it, it would’ve cost me upwards of $600 for the amount of cabinets in there . Because I was curious to see the difference, I sanded, cleaned and primed one cabinet. Be reminded that the inserts were yellowing plastic and I was going to remove them as there are 6 cab with that and put metal sheets in there but I do like it like this so I’ll only metal sheet the two cabs on the coffee island. Yes I’m turning an old built in desk area in the kitchen because apparently there was an era that it was popular to make your child do their homework in the kitchen!! But I’m glad because there’s going to be an amazing coffee bar there now! Take a peek at an original and finished cabinet. One down, 29 more to go.
Tomorrow we will talk about using a realtor at resell and I’ll give you a great option to save thousands in realtor fees!! We are going to talk about contractors, contracts and so much more. As this flip starts, I’ll be blogging daily to give you updates. We will talk about taxes, investors, dealers, and ways you can finance your home without it costing you much at all!