Contractor · Dyer, IN · Member since 2019 · 4 posts · 1 vote
I understand many have flipped 5+ houses or have tremendous experience with the renovation process. However, as a contractor I'm curious what was the biggest "miss" or unknown finding you've experienced in a flip? Foundation, piping, asbestos, or something many of us cannot fathom. It's easy for those starting out to forget due to their lack of knowledge on certain trades, but curious about those "oh s#!" moments.
Flipper/Rehabber · Boynton Beach, FL · Member since 2018 · 81 posts · 129 votes
7y
When the city required I updated all the electrical to include arc-faults. That same city also required full specs on nearly EVERY fixture - including the bathroom exhaust fans! Exhaust fans ... really? PS, stay away from Pompano Beach ... NEVER AGAIN
Stoneham, MA · Member since 2017 · 56 posts · 186 votes
7y
So I have a good story about what happened at my day job...
We are building a high rise luxury condo building in the Seaport District of Boston. It took about a year to get through all the design development, and 2 months before we were slated to begin construction - FEMA redrew the flood zone maps. Long story short, the 3 story below grade parking garage was now forbidden. This led to all sorts of discussions about how to sell certain units without parking spaces etc etc. Essentially the entire building needed to be redesigned. I'm sure this cost the client millions in lost time and delays...
Investor · Portland, OR · Member since 2016 · 1 post · 1 vote
7y
Break-ins can often happen with un occupied residents. The insurance will cover the repairs, but the Contracter has to be available and able to accept/wait for the insurance claim to push through. Sometimes the contractor may allow you to perform some of the work and offer you compensation, however if you have a private or hard money loan with a firm schedule you may be subject to a hardship, and penalties increasing your holding costs drastically.
Having a plan for this may be a great idea, or hiring security would be well worth it.
I inspected myself a flip - missed a bowing foundation wall due to poor lightning (fixed for 2.4K). Missed absence of insulation - i checked one wall for insulation and it was insulated, but the rest of the house was not (apparently the wall i checked was remodeled for some reason). The gut job, insulation, new drywall, and new electric cost me 20K above the budget. Luckily i bought the house for 85K. Totally (it means the only things i didn't touch were septic, part of the frame, and foundation) remodeled it for 116K and 6 months. The ARV (very conservatively) is now 285K. What the heck i decided to sell my place and moved to the new house considering the school district is better
How can it cost $20k to add insulation - you can either drill hole on the exterior (after unzipping siding) or drill from inside through the drywall and blow in cellulose ....
How can it cost $20k to add insulation - you can either drill hole on the exterior (after unzipping siding) or drill from inside through the drywall and blow in cellulose ....
By the time I decided it's gonna be my residence. That is why the house has everything new.
Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
7y
@Phillip Cooper Great question, and you've already gotten a lot of golden answers. I will piggy back on what @Charlie MacPherson and @Ryan Blake said, but in a slightly different light. Contractors almost always take longer than originally accounted for, so that must be noted.
But for me, we actually had a property sit on the market, completed, for almost a year. I definitely did not take that into account...it's a 'FLIP', right? We had a silent investor on this deal, instead of usual HML. We lost so much money, just because of time. We factored a 15% ROI annually, after paying back the investor, and a 6 month process. It ended up taking 18 months until it sold. We were so desperate to sell, just so we could pay out the investor, and cut our losses, we finally sold at a loss. Not to mention how much we could've made by reinvesting the profit "if everything would've worked out as planned"
In Chicago, if you do a substantial renovation, you have to replace the water line connecting to the street. It is expensive and is not one of the bells and whistles that wows a buyer.
Are there particular things that trigger this requirement or can they just hit you with it randomly?
Underway on my first flip and I’ve already sworn off doing my own demo on future flips, especially plaster and lathe homes!
Yeah, it is funny how they always act sooooo excited for demo day on the flipping tv shows. The stars are so eager to swing a sledge hammer. Yeah right. Once you blast through one wall, it loses the appeal for me.
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
7y
@Eric Michaels Usually when you do a renovation that has architectural plans - for example an addition - the requirement will be to replace the water line. If you use a repair and replace permit, you may get away with it. The City is trying to get the diameter of the service upgraded, plus a long term goal of getting rid of lead pipe.
Kingston, NY · Member since 2017 · 252 posts · 138 votes
7y
@Phillip Cooper
I’ve got one on my current flip. It’s not so much an expense but a time waste. The property is rural so there is really only one or two gas companies servicing the house. It took scheduling and re-scheduling and etc for them to get to the house and half full a tank. They never did leak test it because they lacked the equipment at that time. At the end their go to recommendation was to use the other local gas company which did its job within 24 hours.
Contractor · Dyer, IN · Member since 2019 · 4 posts · 1 vote
7y
The Homes within the City of St. Louis are the same as Chicago regarding the water line. It's similar to condo owners being responsibly for all interior items, these homeowners are responsible for everything within their lot to the street. It's an expensive fix as well (<$5,000).
In Chicago, if you do a substantial renovation, you have to replace the water line connecting to the street. It is expensive and is not one of the bells and whistles that wows a buyer.
Are there particular things that trigger this requirement or can they just hit you with it randomly?
Apopka, FL · Member since 2014 · 183 posts · 23 votes
7y
@Jay Hinrichs If you ever need boots on the ground for properties or notes in Orlando, let me know and thanks for sharing that. Sounds like a nightmare well handled!