Renovations Help!!

12 Replies

Hi,

I'm in the process of purchasing a short sale.  It's in bad condition and I don't mind doing the renovations but I need to be very economical otherwise I'm not making a profit. I'm confused on how I can economize. 

The following are a list of thing that are mandatory:

- A/C units (will need to purchase two since this is a two story house in FL)

-Kitchen (old kitchen cabinets have had had major water damage, counters are broken and will need new appliances.)

-Flooring (both floors would need to be replaced. I'm looking into wood vinyal which can directly go over existing floors so I can save on demoing the existing floors)

-Bathrooms (total of 3 bathrooms)

-Paint-(interior and exterior) 

I would appreciate and advice I'm doing this for the first time and I'm confused.

Thanks 

Wow are you in over your head? Can you find a mentor? Will the neighborhood support vinyl? Reface cabinets? Sounds like if you need all that bathrooms will need help also. Watch out for duct work attached they may posed hidden costs also. Have a contingency?
By the way remember your money will be made in the purchase. If it isn't bought correctly you are doomed from the start.

water damage is the roof leaking? Any mold in the house? Are the floors warped or damaged. Sounds like a major gut job. Have you had a contractor in there to give you a scope of work. That always helps when estimating rehab jobs.

So this is the 411 on the house:

The house was owned a women that got divorced. In the process was not able to keep up with it.  The roof is not leaking but the dishwasher overflowed on to the cabinets so there damaged and can't be resurfaced.  Has anyone done a kitchen remodel? Are there cost effective options in terms of material? 

I helped with a remodel in Naples, FL a few years ago. Because of the humidity there were TONS of hidden repairs and costs. We had to gut entirely and start again, which was not the original  intention. If you've never done a remodel before, I would suggest hiring a contractor and having a good sized cash amount in your contingency.

Originally posted by @Susan Morgan :

So this is the 411 on the house:

The house was owned a women that got divorced. In the process was not able to keep up with it.  The roof is not leaking but the dishwasher overflowed on to the cabinets so there damaged and can't be resurfaced.  Has anyone done a kitchen remodel? Are there cost effective options in terms of material? 

 Susan, your best bet is simply going to those chinese pre-fabricated cabinets. It seems that your job is a little extensive, if hiring a contractor is not making sense, then maybe its not the best house to purchase if the numbers doesn't work.

In answering the question, knowing the level of house is helpful.  Can you get away with low end cabinets from Lowes or similar or do you need something higher end to make the project sell?

How handy are you or do you have friends/family that are handy?

Replacing cabinets is something you can do yourself if you have the ability to get the cabinets into the space.

If the countertops are a straight run, you can also find inexpensive plastic laminate counter tops and install those yourself.

I hope I am not overselling something as being easy when it may not be.  I've been in construction for 20+ years although it has always been in management and not the trades.

When my wife and I did our first (well, only one so far), flip house, we did everything ourselves except upgrade the electrical panel and service the HVAC unit.  If it required a license, we hired a licensed contractor.

We did the demo, flooring, painting, cabinets, replace prehung doors, replace plumbing fixtures, and replace electrical fixtures.  My wife had zero construction experience and was a great help.

I figure we spent $15,000 when it would have cost us $25,000 to hire a contractor.

In my opinion, this sounds like WAY too big a project for your first time. You have no idea what you are getting into with all of those renovations. Bathrooms and kitchens are expensive to renovate and have the most potential for hidden problems.

Wowzers. I will try not to squash your enthusiasm here. Start off by trying to put a cost on your projects. go to Home Depot / Lowes with a list in hand and try to cost out all of the cosmetic repair material you will need. They will have the AC units you mentioned too. If you are determined to do the projects yourself, I would budget a year for holding cost; maybe 6 months if you are not employed (taxes, utilities, interest, etc). Figure out what you may pay any labor or contractors. Study the comps in the area and determine what a rehabbed house will sell for. Be honest with yourself here. Yours might be the prettiest and best when you are done. That don't mean it will sell for more than your neighbors. Subtract all of your cost and your desired profit from a sales guestimate. Then you should be in the ball park of what to pay for the house. Do not pay more than you should!!!!!

Don

I think you picked a good house to start on.  You'll know right away if you enjoy this type of work or not.  It sounds like you'll get to learn everything about a house this way.

Only problem I see is your not going to get the best prices on your subs.  You have to establish relationships with them and that can take time.

Give us some numbers on the house.  What did you buy it for?  What do you plan on selling it for? What are comps going for in the area?  How much do you estimates repairs are going to run you? Got any pics? You could easily spend 40-50k on what you just listed.

ok, if you are only in the process of buying this house but can still back out of the deal do so. You are about to make the biggest mistake first timers can make and that is getting yourself in way over your head with a renovation you have no experience with. 

Large renovations are better left to those that have plenty of experience with and a set team of contractors and repair men already that they are familiar with and trust in doing the work and staying within the budgets you set. Looks like to me that you have not set a budget for yourself in the first place which tells me you do not have experience in doing all that will be needed knowing reasonably well what all the costs will be. 

I always recommend to first timers to purchase properties that need very little work and can take time to build a team of contractors they can learn to trust. You will not even know if whoever you hire will do the job correctly in the first place because you yourself do not know what is the correct and proper method of construction and you are not familiar with the materials available to accomplish the job. 

My first gut reaction was OMG!!!!!. I once knew a first timer that purchased a house thinking they would only need to put in an additional $30,000.00 to renovate the project and then market the house and sell it for a profit. In the end it cost them $325,000.00 to do the rehab and they were lucky the house sold for $325,000.00 but only after taking 2 years to do the project and get the house back on the market. 

I am not saying this is you and that you will experience the same thing but do not do a deal simply to have a deal to do . Think carefully if this is within your means and abilities to accomplish. Once you sign on the dotted line you are committed to doing the project like it or not. Is this really the only project for you to do? Think of the time involved because time is money and think of all the hard work it will take. is there really enough money in the deal to make it worth your while and the risks you are exposing yourself to. Remember as a seller you are responsible to provide a good home for a buyer. Will there be a possibility you are exposing yourself to liabilities for bad work or systems in the house that could fail after you are done working on the project? 

I would suggest that if you have not purchased the property yet you bring along a licensed and experienced contractor to estimate the cost of all the needed repairs and renovation so you have actual figures to work from. Then if you feel you want to take on doing some of the work yourself to save money think carefully if you will actually save money based on the time and complexity of the job required. 

Do you have more money or a back up plan in the case you need to pay contractors to do jobs you think at first you can accomplish on your own? I am not saying this is the case because I am in no position to actually know but starting out with a can of worms in one of the surest ways to start out on the wrong foot in real estate investing and one of the worse things you can let happen to you at any time. 

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