So I’m ready to close and waiting for Freddie Mac to make the day. I’m hoping we close by Friday morning because my guy Matt wants to dig into that house this weekend. The home has a 4 car garage which is amazing inside. I will post some pics later in the week if we close soon. He’s going to start tearing out and gutting what we want out of the home as many of you may already know that you can only keep a dumpster rental for 7 days and then you have to start paying a daily additional fee. The dumpster is already $ 350 so no one want to pay more. I’m going to post a few pictures of the basement and explain what we plan to do with this area. The basement is a great space and it’s virtually a dry basement except for water by two windows when we were there today and we determined that the two windows are bad so my window connection will be there as soon as we close to get that out of the way. Now these basement pictures are dated and ugly as at some point most likely in the 70’s it looks like someone lived there as the entire works is there which is coming out; all of it. We are trying to take the basement down to an unfinished basement, paint the walls and make the floors nice so here’s the basement. Brace yourselves because you have to be able to look beyond and imagine or this isn’t for you!
So there’s an upstairs in this home and it’s actually the attic of the home and there are two bedrooms up there. So when you go up the oak stair case …. which for all you oak lovers I’m going to give you an opportunity to stop reading right now because I will lightly sand all of that staircase and I’m gonna use Kona gel on it which is like a deep dark color stain and the front of the stairs will be painted white because orange oak is very dated!! There’s a little 3 x 5 landing, a 13 x 15 bedroom, and a smaller bedroom that’s about maybe 10 x 10. So my plans for that space up there is to fix the insulation in the attic because the room is so hot and Matt said it was because the insulation wasn’t done properly so he’s going to take care of that inside that little spider probably infested attic that I will not be going in. 😳 I’m sure there isn’t one single spider in there because it’s way too hot. So in the picture you’ll see there’s some really nasty carpeting in those two rooms, and that’s part of what Matt will be tearing out. He will have to pull up the nails the carpet strips along the wall because we will be laying laminate flooring up there. There’s two dormers in there that are pretty cool one of the bedrooms doesn’t have a closet so I’m going to make a closet in the one dormer and replace the window in that room because it’s really bad. It looks like all of the windows, if not 95% of them, were already replaced with new windows so that was a bonus in this house. Two of the walls up there, for some odd and unforeseen reason, have wallpaper on them that they painted over. So we will be steaming that off. It’s going to come off really easy and that will prepare those walls for paint. That whole area in the attic is going to be painted Sherwin-Williams mindful gray one of my favorite colors, in fact, one of my go to colors. I’m pretty sure it’s going to have the same laminate flooring but I can’t promise that I won’t decide to go with the gray flooring up there and return some of what I have on the dark brown downstairs . As my son often says to me … let’s just play it by ear . I originally had thought I would put carpet up there and then I opted against it in case I held out for a rental I’d rather have a laminate there instead of carpet. We’re going to blow some insulation in that attic, make some really cool attic panels and in the one bedroom somebody cleverly made three drawers built into the wall and when you pull them out they take you into that part of the attic so I’m going to trim those drawers out with some really cool leather handles on it and paint them white it’s gonna be really neat. And of course the entire house is going to get all new ceilings painted. So let me take you into the lavender rooms !!!👀👀😩 I’m sorry but I never allowed my children to express themselves through my walls in my home. If they want to express themselves, they may paint their own walls pink, purple, black, brown, bright yellow, bright aqua when they’re old enough to buy their own home!!
So I will switch to using my new iPad for this blog because it allows me to talk and text and it comes out much better than my iPhone. So the next part we are going talk about is the kitchen. I told you in a previous post and that I named some of the room so I can remember what I’m talking about and I like to refer to this kitchen as 1960 because that’s exactly what it looks like. It’s a nice size kitchen, U-shaped, it does have a laminate countertop with the laminate backsplash which I’m going to have to do something about. I don’t know what year that they started putting built in the desks directly into the kitchen. I never figured out what the concept of this was, except that maybe it was so while you were cooking dinner you could make sure your kids did their homework. Whatever the reason it was it was really dumb. But I’m happy that this built in desk area is there because with a little bit of tweaking and replacing the countertop there, I can make a pretty amazing coffee bar so that is what the plans are for that built-in desk area. The cabinets are going to get all painted with Sherwin-Williams enamel paint and that’s the paint that I told you cost $99 a gallon. Some more in a previous post I think it was when I open the blog I put a photo of the before and after cabin and I had done one . The floor in the dining room and the kitchen and down the hall is ceramic tile, and I believe I’m going to leave it ~although I don’t want to. There are just some things you can’t change when you’re under a budget. We will be adding a new 9 inch deep stainless steel sink with a single hole faucet with the sprayer built-in as well as a stainless steel dishwasher. There is not a dishwasher in the kitchen now, and I most certainly believe it is necessary for the quick sale if in fact that is the route we choose to go.
So I’m going to have to correct my name I have for this kitchen because I’m pretty sure this kitchen is like 1980 because that’s about the decade they started putting those desks in the kitchens around that time . Close your eyes and think Captain and Tenille “Do That To Me One More Time” because I’m about to take you in to 1980 with this kitchen. Take a really good look at it because the next time I post it on here you won’t recognize it ! Take a look at the upper left photo. You will see those two cabinet doors with the yellow tinted plastic in them, well I took one of them home and did it in the color the whole kitchen will be in so I’m going to re-post it here because it’s in a previous post.
There is so much change that is going to happen in this kitchen and in that dining room that I can’t even go into it in detail but if you haven’t followed me yet start following me so you don’t miss that update!!
The last home I did, I just winged it and went very far over budget and had a contractor steal from me so I vowed this time: I will stay in budget no matter what. I’m using the free Google Sheets which is a mini version of Excel and I crafted out a budget that included EVERYTHING right down to insurance, taxes, etc and I’m in budget with $ 1,500 left and still have to have Al, my electrician hang a few lights and turn on utilities so my plan is to stay in budget and for maximum profit.
It’s hard to stay in budget because little things keep popping up and those little things are 100 and 150 and they add up. I’m about to have a second coffee, pull my my Excel and add the rest of my Lowe’s, Home Depot, Walmart, Ebay and Aliexpress orders in to tabulate but I’m pretty sure I’m in budget with enough left for electrician, plumbing supplies and turning all utilities on! Now you see why I named my page, “did it right” because this time….I did it right! Next time I’ll get even better! I spent so much of my time dwelling on things I couldn’t change and had a talent that I didn’t even see! The easy part is the renovation the hard part was finding the right property. I think I can do three a year comfortably and still have little to no time in it as my effort is kind of all brain work, research and decision making and that’s it just to make sure I don’t lose! I don’t think I’ll ever flip a $ 100,000 purchase because it’s too risky. I’d much rather flip the smaller homes because this day and age and couples just coming out of college with debt; a home completely renovated and selling for under $ 100,000 is enticing to their already high college debt so my market is big I think.
So today I was outside sanding and prepping those barn shelves for the master bedroom and there was this black hornet out there and he was hell-bent on stinging me. I had a can of wasp spray and used almost the entire can and he’s still alive right now as I type. I’ve never done something so annoying and couldn’t figure out how this hornet didn’t have something better to do. I managed to get the wood completed, dodging this hornet and then went in and made myself a coffee and went back out with the intentions of killing this pesky biter. As I sipped my coffee, dreamed of how me and Matt can’t wait to get the keys to the home I remembered that I saw my accountant in the morning as I made an appointment to ask about tax consequences but before I delve into that subject let me just tell you that like I said in a previous post…anything you think that will go wrong WILL. I sent my earnest money to the title agency using certified mail with tracking number…..so I’ll go track and see where it’s at! I’m back, it’s to be delivered by 8 p.m. this evening. Tell me why I paid $ 5.95 to send something certified when I could have put a stamp and they would already have had it!
So back to my post. I wanted to confirm with my accountant what my tax consequences would be and if I should get an S Corporation to escape some of the 15.3 percent SE tax but there is no way around the fact if you buy a home, quickly renovate it, list it and sell it and don’t hold it for the full year as a rental or intent to rent….that your profit will be taxed as ordinary income…that’s right people, ordinary income so lets just say I profit $ 30,000 on this sale, I have to add that to my other income having it cause me to pay the IRS $ 10,000, $ 1,700 in state taxes and $ 300 in locals in taxes and as if that isn’t enough I also have to pay the 15.3 percent Self-Employment income at another $ 4,590 so our legislators and congressman can get huge raises. I found the home, I figured out that it’s profitable, we took care of everything and we also risked our money to buy it but the government wants more than 1/2 of my cut and work. Ridiculous but my accountant said as long as you are paying taxes you made something and laughed and laughed about the IRS wanting 1/2 of a person’s income. It’s wrong on so many levels but the alternative is to hold it out as a rental for a year and have all those expenses which would total $ 5,000 so either way………… Uncle Sam makes more than me……Sad.
So today I called Freddie Mac because that’s me….I’ll just go over two realtors to find out my closing date because I have a lot of things to do and everyone is busy and I get that so I just called myself. They are going to try to push it through to this week so we shall see!
I want to talk about this bedroom that we elected to put in. The home listed as a three bedroom home, one on main level and two in attic upstairs. One of the attic bedrooms is about 13 by 15 so that’s nice size the other is smaller. The bedroom on the main level apparently was supposed to be the master bedroom and its size was a minuscule 10 by 9 and there was just no way that we could feasibly leave that as a master bedroom because the home just wouldn’t sell quickly or for asking price. I talked in another post about when viewing these homes look for those kinds of mishaps and see if there is anyway you can remedy it for a quicker and more lucrative sale. I did notice then when you come in the entry there’s a really pretty oak staircase that goes upstairs and it separated the two living rooms. Really one of the rooms was a waste of space. The smaller one was only 12 by 11 so that room we left as the living room since there’s a 13 by 16 finished room in front of home that’s will be four seasons and completed heated. The one on the right was 13 by 16 so I eyed that up as a potential bedroom before I offered. Since it had nice size, we could afford to shave 3.5 feet off the room to create a hall way into kitchen. All we had to do is frame and drywall over the existing door and move door to another wall and build the new wall in the hall way. We also chose this pattern because it was just a 4 foot walk to the bathroom and the other room you would have to pass kitchen up and that would be a bad selling point. That’s why we chose that room because of it’s proximity to the bathroom. There’s a really nice gas fireplace with a mantel in that room and as the master bedroom that would serve a really good selling point. The only issue I noticed on first look was we would have to put a closet in that room and take up another 24 inches of the room taking it down to a room size of about 13 by 11.5 which is pushing it for a master bedroom so I decided to create an open closet concept using industrial shelving and some barn wood to run the length of the 13 foot. Those concepts are really becoming big as a lot of people don’t like the closed dark closet where you can’t find anything in the back corners.
I had two really nice pieces of barn wood each 7 feet long and 11 inches wide so I thought those would be put to great use in putting the 13 foot shelving area up. I’ll go about 16 inches from the ceiling and line it with storage boxes. Then on both sides of the closet I’ll put in two industrial looking shelves about 5 feet high and a bar in center using threaded gas pipe to hang clothes on. Frankly, they are nicer than your traditional closets because they are fully lighted. My electrician will hang a main orb light in the center of the room and three more pendant lights near that closet. I’m going to post up a picture of what I hope it to look like once the room is done! I can get these at Lowe’s after my discount for about $ 75.00 and those are wood shelves so I’d take them off, white wash them and add a bit of gray stain to match the two barn shelves I’m about to show you. I’ll put one of these on each side of the closet…they are 4 feet wide so that’ll take up 8 feet of the 13 feet I have leaving me room for two 5 foot bars to hang clothes on. We will incorporate threaded piping for the hanging bars to give it more of the industrial look I was going for. There is one nice size window in there and it’s about 51 wide and 32 length. The door coming into the bedroom, I do believe I’ll make and have Matt hang a barn slider to match the barn look of closet as there’s nothing worse than having a bedroom door open to a hall when someone is walking down so the master bedroom will slide open and we can put a lock on the door as well. Going to be a great master bedroom I’m sure! #teammattcyndi Don’t forget to follow me to see the finished products of this amazing home! I’m not totally sold on those Lowe’s builder brand metal shelves so I’ve been watching Craig’s list for some real metal industrial shelving so that could change. But Lowe’s is my back up!
Adding this really cool master bedroom now left the small 10 by 9 to be left for upstairs laundry room or they can enlarge their bathroom which is on same wall of that small bedroom. Now the new owner has plenty of options of what to use the fourth bedroom as.
I started calling this room the “Front Room” because there’s so much cool space in this home I labeled some of the rooms so I can separate which I’m talking about! The attic is “spider room”, the basement is “demo city”, the kitchen is 1960, etc etc. It’s the room you enter from the very front door of the home. This room is going to be amazing to do. As you can see from the photo, someone started and didn’t finish this. I start a lot of things and then start multi-tasking and then I’ll go back to it but this room I would have finished because it’s going to be so fun. They did get the wiring done so Matt has his work cut out for him because insulation needs blown in ceiling, ceiling floor needs fixed, ceiling torn out. It needs drywall, taped, sanded and painted. I was going to put this really cool wood flooring in there but I had to make it and it’s time consuming and then I was in Ollie’s and spotted these great 4 ft by 4 ft carpet squares. I talked also about not putting vibrant colors in and I do stay very neutral throughout the home but do pick one space to pop with some color and I chose these carpets because I loved the color and they will serve this space great. This room is kind of a sunroom/four seasons as it’s not connected to the duct work and we are installing a 2,000 watt 110V baseboard heater with a digital thermostat to keep the room heated when not in use and toasty on cold days. It will certainly be insulated thoroughly and it is over the basement so it will stay very warm. I’m posting pic of the light and carpet as a sneak peak and the room. You won’t believe this room when it’s done!! There are new windows in there as well. I like loft lighting and as I blogged in an earlier post about how much I love love Aliexpress.com. If you’ve never shopped….do it NOW. Aliexpress sells a lot of lighting from Restoration Hardware so for you fools who paid $ 4,000 for a light you can get it for $ 800 there ! Same light, same box, same size. This light for this room here you could not find anywhere in the U.S. and if you did it would cost you an arm and a leg and trust me people; this cost me a finger and that’s it. Oh wait, I lied….you can most likely find this $ 24.00 light at Restoration Hardware for a cool $ 1,200.00. I also said that buyers love unique things and my lighting is very unique. I will be having my lovely certified Ohio electrician, Al, put new wiring in for this light and Al is also a pastor. Funny story about last house. Al was my certified electrician and after he did every thing I went up and there was no light. So I called Al and I said hey Al there’s no light in the home and am I doing something wrong. He said “Miss Cyndi” you have to turn the main breaker on…so I put down my cell, pulled over the main breaker and it lit up like a Christmas tree. I picked up my cell phone and I said Al, he said what Miss Cyndi, so I said, “When God said let there be light there was light”. Great great guy!
If you watch the gallery you can see the two pics of the Front Room’s present condition which is actually good for us as there’s not a lot of tear except for the ceiling. In the other picture is the light and carpet. You have to be able to looking at these pictures and see that light, carpet, drywall painted Sherwin Williams Mindful Gray (one of my favorite grays…so soft and light) and the front door on the exterior will be painted with a brand of paint that I love and used here in my home and it’s called Front Door and can be bought at Home Depot. The thought behind there 30 some vibrant colors is that every home needs front curb appeal. I’m not going to say the color I chose but it will pop for sure!
We are waiting to close and Freddie Mac will most likely set closing for this week. Matt, my friend that is helping me, is anxious to tear into the basement and other parts we are tearing out with his music, hammer (30 pound hammer that is) and his fast working technique. This basement, I feel, is the biggest headache and Matt says he will be done in a few hours. I did warn him I will not go in the basement or the attic upstairs due to my fear of giant spiders! He will just go in the attic and tear around with his bare hands and it just freaks me out. I’m going to post five pictures of the basement and keep in mind that someone actually lived in this basement in the 70’s or 80’s because everything is there…every wall is paneled with 70’s paneling, there’s a bathroom that’s coming out, a closet, a bedroom….she gone! We are scheduling the dumpster to be there a few days after he begins to make sure we have it for two full weekends with him there because the cost is $ 350 and I’m not about trying to get two of them. We have the luxury of a huge 4 car garage so we can store what he tears out in there to lengthen the dumpster use. I was so disorganized the first house that I paid for three dumpsters never choosing the right size. Ughhhh what a waste of money. Should have organized it perfectly and got one $ 450 one instead of three $ 300 ones. Live and learn.
So here are the photos of the basement . Pretty creepy, huh. Our focus is to bring this great space back to just a basement so potential buyers can envision it as it was intended: a basement. It’s dry and what a space. It’s huge. It has a bathroom we are redoing, a raised bedroom that has so much potential. I’m going to have to control myself as I know I’ll want to finish this amazing space and it’s just not in the budget. It’s a little un-level on one end but the owner could level it up with concrete and this could be one heck of a space. So I want everything out of here except for one laundry tub. He will be scraping all the old flooring off, tearing ALL paneling, kitchen cabs, sink, faucet…everything. Then power washing it with a cleaning solution of white vinegar and water and he will re-strike any parts of the basement walls that need it although they look pretty good from the exterior. Then we will use a commercial sprayer and Kilz the entire basement walls white. I mean this space is big and at some point if we can’t get reliable and paying renters; the future owner will make a great space down here. We are installing two new windows in the part they used as a bedroom because there were two little spots of water that are apparent it came from the windows so those are getting replaced. The best part of this is that the bank already tore down the entire raised ceiling panels and that’s a bonus and less to do. I will be taking video of Matt working down here and you’ll see what I mean when I say he’s non-stop.
I think realtors are a great resource in this field. They are knowledgeable and just because they might sell a home for $ 200,000 and we will often think, “wow she showed one home to that person and made a cool 6% profit which means she’s taking home $ 12,207.00 for one showing. Keep in mind that the realtor has to split that fee with another realtor if it was their listing. It’s no longer the days where you list a home and only that realtor can show it. Your listing shows up on MLS and anyone can choose any realtor they want. If the listing agent happens to be the one who sells the home they don’t split their commission with anyone but understand their company gets a portion of that $ 12,000 and they are generally not considered an employee under federal tax guidelines so they have various different taxes to pay from their commission so the next time you think an agent made a ton of money; think again. They may have shown that one client 20 different properties. That’s a lot of their personal time in hot weather, snow storms and long drives only to have their client find 10,000 things wrong with that showing.
Now getting back to whether I would use a realtor when selling a home of mine; now that’s kind of a different story. I really adore the realtor that sold me this home and I met her from her selling my other home to her client so naturally I called her when I wanted to see a few homes. When I sold my other home, I used a company called US Realty. It’s a realtor’s nightmare because they earn less commission. I use this site because there is no way you can get your home listed on the MLS (multiple listing service) without listing with a realtor. This company online does it for a fee of $ 296.00 for a 6 month listing. You do have to be a little savvy on the internet because you are responsible for your listing, photos and other things. And don’t expect to get a hold of the listing agent. You can only speak with him via email and he has X amount of time to respond. If you feel the need to call him …trust me, DON’T as your credit card will be billed $ 50 for a phone call. My sister and I started calling him “Ghost”. I kind of like it this way as I used a different realtor from a different agency when I bought my first REO and her pictures she took, she may as well turned all the lights off and taken them in the dark that is how bad they were. By the time I realized it, these horrendous photos crept like a spider on a hungry day through the entire www. Realtor. com, homes.com, trulia.com, and a dozen other sights not to mention the web-site of every realtor that has a web-site. I ended up calling her and telling her to remove all my pictures and I retook them, but it took a few days for the new ones to get out there. When using US Realty, you do get to be in charge of your listing and I like that. It allows you to choose your own commission for a realtor who shows your home. If you find the buyer, there is no commission. Last time I chose only 2.5 percent so Megan sold it and only got half of that as my listing agency US Realty got the the other half. I don’t even think she made anything or not much because the girl who bought it ran low on funds and I had to come down a lot more than I wanted and she gave up some of her commission so this time I’ll use US Realty but will advertise on my own on social media and Craig’s List and if you sell it yourself there’s no commission. So lets just throw out a number for the halibut. If I list it for $ 99,900 and a realtor sells it for 90,000 that means they would split the 3 percent commission (or whatever amount I choose when setting my U
S Realty up) with US Realty so they would make 1.5 percent which would be $ 1,350.00. Now if that was the only home they showed to their perspective buyer and spent a few hours with them…that’s a decent profit after whatever fees they owe but generally that is not the case. Because flipping houses is risky, I feel more comfortable listing in this manner as the home goes everywhere due to MLS and I can help protect my bottom line.
One of my first homes I bought in Greenville I listed with a realtor that turned out to be a pretty nice acquaintance of mine. I listed it on Craig’s List before I listed with her and I ended up selling it. I gave her $ 1,500 at the closing and she told me that I didn’t owe her anything because I sold it. She trudged up there on more than one snow storm, set up an open house and did a lot for me so I could not pretend like she didn’t do anything. Realtors are hard-working individuals but like police officer, teacher and other workers there are some stinkers in that group and I ran into one during this process but luckily my realtor who sold me the home took care of her.
So having said the above, selling a home for $ 100,000 on US Realty would save you over $ 3,000 if you chose 3 percent as your selling commission. A lot of people don’t realize that if it’s your choice to flip your home quickly and sell it rather than rent it out then all your profit is counted as ordinary income and you are taxed at 15.3% for SE Income so depending on what tax bracket your other income is in you could theoretically profit $ 40,000 from a sale in 6 weeks and owe Uncle Sam (IRS) upwards of $ 20,000. If I don’t find a reputable renter within a reasonable time-frame that could happen to me. So using those figures, out of the $ 40,000 profit I could make, $ 3,000 would go to commissions, $ 20,000 to IRS and maybe $ 800 in closing costs and buyers are notorious for not saving any of their closing so will commonly request some kind of sellers assistance which could be 3 or 4 thousand dollars so now all of a sudden you went from $ 40,000 to $ 15,200 profit which is a nice chunk of change but keep in mind you risk your money so it’s always best to rent them out if you can find a good renter. There is only so long you can hold out for that renter because each month it’s causing you a loss.
So wrapping up here on this subject and if you are in the market for a home and want to hire a realtor to show you homes, by all means call Megan Martini and she will get the job done and some!
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!