High Level Steps to Renovating a Fixer-Upper?

9 Replies

Hi BP Family - My husband and I are looking into purchasing another single family home.  We've always purchased turn-key properties and are now thinking of buying a true fixer-upper at a lower cost and renovating (i.e. adding higher, architecturally interesting ceiling, ripping out walls, and designing a modern space, etc.).  I'm wondering if anyone can give a high level description of steps to take for renovating a house.  Namely, I'm wondering what's the order for interviewing/hiring a general contractor vs. an architect vs. an interior designer.  If we contact one, will they generally put us in touch with the other professionals they typically work with, or do we go out an find our own?

I'm basically trying to make sense of the big picture.  Any help would be much appreciated.  Thanks in advance all!

Originally posted by @Ana Marie B. :

Hi BP Family - My husband and I are looking into purchasing another single family home.  We've always purchased turn-key properties and are now thinking of buying a true fixer-upper at a lower cost and renovating (i.e. adding higher, architecturally interesting ceiling, ripping out walls, and designing a modern space, etc.).  I'm wondering if anyone can give a high level description of steps to take for renovating a house.  Namely, I'm wondering what's the order for interviewing/hiring a general contractor vs. an architect vs. an interior designer.  If we contact one, will they generally put us in touch with the other professionals they typically work with, or do we go out an find our own?

I'm basically trying to make sense of the big picture.  Any help would be much appreciated.  Thanks in advance all!

 If the property is for a "flip" then it is a different process than moving into the property.

Generally, you want to be the General Contractor in my opinion. Nobody cares about your money like you do. I have seen contractors who couldn't read blueprints and put windows too low, pipes where they shouldn't be and didn't finish the job anyway. Drive a nice neighborhood and get out of the car and talk to the General Contractor of the nice house that is being built. Ask him who the Architect is. You want two or three Architects on file since they can be busy if they are good and you need one when you need one not a year from now. Then call the architects and ask if they do your kind of project. Then ask them who they like for construction. Many Interior Designers are connected to architects. Ask the architect who they would recommend for the Interior Design. Keep in mind that styles vary wildly. The contractor should have access to roofers, framers, concrete, pool, plumbers, electrical, tile, sheetrock, kitchen & bathroom installers, painters etc and should pull the permits. You are responsible to make sure the timeline is followed. You can't paint until the sheetrock is up and the mud is dry. You can't put up sheetrock until the insulation and wiring and plumbing inspections pass and so on.

It is a marathon not a sprint.

Or, if you want to make money at it you can do what I do:

This works in "normal" housing areas like Phoenix, Las Vegas, Austin. I doubt it would work in San Francisco. In my case, one of us puts up the capital and the other finds the property and resells to a tenant buyer. We really don't do any rehabbing anymore. We let the tenant buyer do the rehab. Generally we get $25k down from a tenant buyer and split that 50/50. Since we take over the properties using Subject To and Wraps, there is also monthly cash flow of roughly $500 which we split 50/50 upon selling on Lease/Option to tenant buyers. We provide the tenant buyers with owner financing so they don't have to worry about bank financing. When the tenant buyer exercises the Option to buy a few years later, generally that has bought down our underlying financing and we split those profits 50/50 as well. Whichever of us provides the management side of the transaction has 51% ownership so decisions can be made. Everything is done inside an LLC. Very profitable for all involved. It's just another way to have partners and keep everyone happy.

It just depends on if you want the "experience" of doing high end renovations or if you are doing investing for the long term.

Originally posted by @Ana Marie B. :

Hi BP Family - My husband and I are looking into purchasing another single family home.  We've always purchased turn-key properties and are now thinking of buying a true fixer-upper at a lower cost and renovating (i.e. adding higher, architecturally interesting ceiling, ripping out walls, and designing a modern space, etc.).  I'm wondering if anyone can give a high level description of steps to take for renovating a house.  Namely, I'm wondering what's the order for interviewing/hiring a general contractor vs. an architect vs. an interior designer.  If we contact one, will they generally put us in touch with the other professionals they typically work with, or do we go out an find our own?

I'm basically trying to make sense of the big picture.  Any help would be much appreciated.  Thanks in advance all!

 This guy has a post you might want to read:

https://www.biggerpockets.com/forums/67/topics/543...

@Mike M. if they've never completed a large renovation before, I would not advise them being their own GC. That will not end well.. You can't just wing it.. Especially with no construction experience (assuming). I'm an architect myself and have GCed a few projects and it's no walk in the park. 

My advice  @Ana Marie B. is to get a local architect on-board, and yes as Mike said, contact a few and make sure they deal with single family home renovations. Once you settle on one, they should have contacts for contractors to complete the work. And unless you have some specific style requirements and absolutely need an interior designer, with the help of your architect, you should be able to choose the finishes. This is a rental so I'm assuming you're not going with anything high-end. The more complex to construct or non-standard finishes = more money. 

Working directly with a contractor may be risky, especially if you do not know exactly what you want, need or is required. 

Process with my clients goes: 

1. After selection of architect, work with him/her to get a well thought out scope of work. They can look into any Code, Zoning or Structural issues if necessary. (Depends on complexity) 

2. File plans for permits if necessary. If not, bid your scope of work to at least 3 contractors. 

3. Select contractor and agree on fee in contract. 

4. Contractor(GC) brings necessary trades/subcontractors to project and they all complete the work as detailed from architect. GC is responsible with coordinating his team and their work as well as making sure ordering materials, site safety and clean up just to name a few. 

5. If you are weary of the whole construction process (and not know how complex of a renovation you are looking for), your local architect will usually have construction administration service which basically is overseeing the construction process on your behalf to ensure you get the end result you wanted. 

All in all, if it's minor renovation, tile work, flooring, changing plumbing or lighting fixtures, paint.. Then going straight with a contractor may be fine. Just be sure to be as detailed as possible when putting your scope together. If permits are necessary, I'd enlist an architect to make sure things run smoothly and you don't have headache from Municipalities. 

@Ana Marie B. , @Mike M. Provided a great read from @Sean Carroll on a high level process, but with everything out there, the devil is in the details. You can easily be more or less involved, and whichever you choose will significantly influence your ROI. For example, you can be fully hands off and less involved (meaning less ROI) and have an engineer/architect, interior designer, construction/project manager and general contractor do everything for you. OR you can decide to pick and choose what you would like to be involved with your project. The more you do, the higher your ROI. But the best and most invaluable part above and beyond your increased ROI is the hands on experience.

Bottom line, there is no right way to do things and sometimes what works for one investor might not work for another (you). At the end of the day, you need to explore different options and determine what you’re comfortable with based on the numbers and you’re desired ROI.

Full disclosure for flipping, we recently finished a high end project and it is very involved, a lot of work and not for the faint at heart.

I would agree with Jared W Smith, for that type of project you should start with an architect and they should be able to help you through the process.

Wow this is why I love BP!  Thanks for all of the amazing tips, everyone. 

Special thanks to @Jared W Smith for that excellent process description -- that's exactly what I was looking for! Will definitely reach out to a few architects to check pricing, services offered, as well as availability.  After a lot of thinking last night, we're now looking to rent out our current primary home and move into this future home.  So in other words, we will be interested in the high-end finishes.  I especially like your suggestion about construction administration services, since you are correct that we don't have any construction experience and this would be a big load off of our shoulders. 

Would you recommend we begin interviewing architects once our offer is accepted?  Wait until inspections are done? 

Thanks again!

Originally posted by @Ana Marie B. :

Wow this is why I love BP!  Thanks for all of the amazing tips, everyone. 

Special thanks to @Jared W Smith for that excellent process description -- that's exactly what I was looking for! Will definitely reach out to a few architects to check pricing, services offered, as well as availability.  After a lot of thinking last night, we're now looking to rent out our current primary home and move into this future home.  So in other words, we will be interested in the high-end finishes.  I especially like your suggestion about construction administration services, since you are correct that we don't have any construction experience and this would be a big load off of our shoulders. 

Would you recommend we begin interviewing architects once our offer is accepted?  Wait until inspections are done? 

Thanks again!

Glad to be helpful! 

If that's the case, you could start interviewing architects once you've got an accepted offer but don't actually retain them until you've actually closed and can walk property with them. You don't want them starting on any preliminary design or property research until you are sure it's yours. Also the complexity and property will determine some of their service fees. 

With your limited construction experience, I'd either bring on a construction manager or as I mentioned (and prefer) include administration services with your chosen architect. 

Just an update....my husband and I put an offer on a fixer upper with termites, dry rot, you name it.  Current owner appears to be a pack rat.  Then someone comes along and makes an all cash offer of $1.3M with no contingencies.  *Sigh*  I can totally understand why people are leaving the SF bay area in droves.  This fixer upper is not worth more than $1.1M in its current condition.  I'm assuming this person is from out of the country and has never even stepped foot in the house.  

Oh well, our search continues!

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