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Return to: Part II: Complete Home Rehab
STRUCTURAL INTEGRITY
If so the roof and foundation have passed your keen eye, look at the rest of the house with respect to its structural integrity. More than half of your structural integrity check at this point is already complete as the roof and foundation are two of the most important components and those have been done. Now you are left with the interior spaces of the structure.
First stand at the front door with a checklist in hand (www.inspectamerica.com) and begin to scan the walls, ceiling and floors. Look for water stains on all three surfaces, as well as patches that were used to repair or conceal damage. Similarly, go through every room and look for signs of damage or concealment.
Any flat floor is a good candidate for a “scientific” marble test. Drop a marble. If it rolls to a corner, that floor ain’t level, Buckwheat. That’s a simple test, but you do want to know that the under-layer or sub-flooring is sound and firmly attached to all those joists, and beams and trimmers and blah, blah, blah.
Soft spongy floors are also of concern. Creaky floors are annoying and rotten floors are another story. So once again, look at the structural support of the floors. Not as important is the cheap, yellowed vinyl is coming up at the seams. Nor the carpet that is matted down or thread bare. Nor the finish is worn off of hardwood floors or the tiles that are loose.
Floor coverings fall under the label of cosmetics. That’s such a pretty word and that’s what you want to concentrate on: cosmetics...more on that in a moment.
So the floors pass a test for sub-flooring and structural integrity is great. Now check to see that the walls are square because they are attached to that floor. And check that the doors all operate properly and are square too.
So now you have a solid house. By that I mean, plumbing, electrical, heating and air-conditioning, roof, foundation and overall good structural integrity.
OTHER AREAS TO CHECK
How much more can there be than that? Let’s say the structure overall is good. By that, you have a solid roof, a solid foundation and sturdy floors and walls.
So what’s left to do? Call in your army of carpenter ants, from painters to carpenters and flooring installers, yard maintenance and tree trimmers, and handymen of all sorts.
This is the whirlwind tour:
- Let the demolition guy in first. Order a dumpster for the next ten days. Order demolition man to throw out everything including the kitchen sink. In other words, clear the decks.
- Create a blank canvass for the painters to perform their transformation. They come in at this point and patch and paint. Let them blast the place with their airless paint-spraying arsenal inside and out. Give them 3 days and you have just added a huge improvement to your investment. This is the biggest dollar-for-dollar return you can make.
One cautionary note here: Make absolutely sure that quality paint is used. When it comes to painting, it’s the labor that kills you, not the material. If possible, insist on Sherwin Williams Super Paint. It is a miracle-type formula that covers up bullet holes without any patching compound and it lasts forever. It’s worth every penny; insist on it.
So an ideal fixer upper is to find those where the structure and systems are fine but it still needs a demolition man and the paint brigade. Everything up to this point has been inspection and appraisal of the situation.
- So once you’re satisfied that it is a cosmetic rehab and not the expensive money pit, send in the cosmetologists (their nick-name). These are normally contractors who add residential make-up to the bricks and mortar.
- Once the painters leave, the flooring guys are right behind them, laying tile and carpet. These guys are out in 2-3 days.
- Next comes the cabinet and handyman plumber.
- Then light fixtures, vanities, toilets, sinks, doors, switch plates and outlet covers…wham, ten days are up and this house is either held out for rent, lease-optioned or sold for a whole heck of a lot more than the ten grand that was put into it, if that much.
You must be somewhat of an appraiser and deal finder. It takes time to recruit your cosmetologists, but you will run across them in your travels. Friends and family usually can provide you with some serious leads. Start networking and talking to tradesmen. Get their numbers and schedule them to descend upon your ugly duckling at certain times and watch the transformation begin.
It can take years to learn these tricks. But can you see how much you can actually lose? Here is a quick example:
I bought a house for $55,000. Its deficiencies were purely cosmetic. I used other people to do all the work and I pitched in to keep them organized. Ten days later, it was done. I spent a total of $5,000 on materials and labor and it appraised at $90,000 in 10 days!
That’s $30,000 in 10 days, not 3 months.
MARKETING
Now marketing time could take 30 - 45 days. Here is how you can do that too.
Here’s a pretty neat way I figured out how to find good cosmetologists (tradesmen). If I know relatively no one in the area, I will ask a local appraiser to suggest who he would use if he were me.
This is an intelligent way to ask that question. I ask it in this form: “If you were me, who would you use?” Now that triggers a self-preservation mechanism in their brain and they give me excellent people, who are very good at what they do! Try it; it works.
I went to appraisal school and learned a lot. Believe me, appraisers are underrated and treated poorly. They truly are experts at discerning quality and value. They know whom does quality work. Make friends with a competent appraiser and the lenders that accept their appraisals. Hint: You’ll get very fair evaluations and their lender approves them.
Marketing, hunting, finding and capturing the “ripe for rehab houses” is another book entirely. However, don’t lose faith because I have written that book for you as well.
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