Conflicting views with business partner on finishes

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Conflicting views with business partner on finishes

Matt Taschner
Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes

Hello everyone,  I'm looking for some feedback regarding deciding what to do with cosmetic changes.  My partner and I recently purchased our 3rd investment property, a 4br 2br that needs some cosmetic repairs.  It was built in 1994 and as you can imagine the trim, doors, and cabinets are the older golden oak finish.  I feel like we could salvage the cabinets by refinishing them white as they are in good shape, paint the trim and replace the doors.  My partners view on this one is that because the cabinets are in such good shape to leave them and just replace the counter tops.  I am not a huge fan of the golden oak look and I feel like our buyers will feel the same.  He thinks the house would not benefit by changing it to white.  My question is have any of you had similar conflicts when dealing with partnerships or what would you do in this situation?  Thanks in advance.

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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
11y

Do you use an agent to list your properties? If so, I'd get their opinion. Or any third party that has a pretty good bead on what is selling well, design wise, in your area. You can agree ahead of time to let the third party be the tie breaker!

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  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    11y

    @Matt Taschner ,

    Did you lay this out in the original contract?

    Are you flipping or renting the property?

    How upgraded are other houses in the neighborhood, and where do you want to be in the market relative to them?

    Hopefully those should help...

    If not, there's always a coin! lol

    1Reply
  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    J. Martin

    Thanks for the response.  We did not have this in the contract.  This one will be a flip,  I should have clarified.  Recently we  flipped another house in the neighborhood which we had to replace the cabinets because the were in rough shape.  We agreed on that one to go white and it turned out great with the rest of the color scheme.  As far as the other houses in the neighborhood some have been updated, but the ones that have sat on the market are definitely outdated.  I think that by making this stand out we should be one step ahead of the rest without pricing us out of the area.  Thanks for the insight and oddly enough it may come down to that coin flip.  LOL.  

    @J. Martin 

    1Reply
  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Do you use an agent to list your properties? If so, I'd get their opinion. Or any third party that has a pretty good bead on what is selling well, design wise, in your area. You can agree ahead of time to let the third party be the tie breaker!

    3Reply
  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    Hello @Jean Bolger , Yes, we do use a listing agent.  I think that is a great idea to use a third party as a tie breaker.  I think I will definitely bring that up as they would have the best insight and possibly go through their brokerage to ask other agents opinions as well.  Thanks for the reply.

    0Reply
  • Paul Sorgi
    Real Estate Investor · Abington, MA · Member since 2011 · 356 posts · 114 votes
    11y

    My third party idea has been taken.  Good luck!

    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y

    Look at recently sold homes in the price range you're looking at.  If they had golden oak, then keep the golden oak.  If they had white, then go white. If they had something completely different, then go with what the market is looking for.

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    1Reply
  • Kerry Smith
    Real Estate Broker · Sanford, NC · Member since 2014 · 169 posts · 69 votes
    11y

    @Matt Taschner what do you want your flipping business to be known for - leaving 21 year old golden oak cabinets in your flips, or bringing the cabinets in-line with market standards?

    Remember, your product is the house you are selling, but your business should be making your customers happy. I think that if you consider what your CUSTOMER is looking for, the answer is easy. 

    2Reply
  • David Friedman
    Property Manager · San Bernardino, CA · Member since 2014 · 473 posts · 238 votes
    11y

    @Matt Taschner I have 4 business partners and so when there is a disagreement we try to vote. Anything above 50% and that is the choice we make. With this being a disagreement between two people, it is much hard to implement that system. Before you begin your next flip, put some policies in place on what to do in the future if a situation such as this arises.

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  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    Thanks @Kerry Smith , I would have to agree and I do think updating is what the customer would want.  I think if we left them the way they are the customer would view it as something they would have to change and may deter them from going with our property.  Thanks for the feedback.

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  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    Yes @Dawn Anastasi , I think in this case, with the comps considered, that white is the way to go.  I will have to come up with a sold comp list and also houses that are currently on the market that are outdated and use the facts to help with this one.  Thank you for your feedback.

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  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    @David Friedman , the decision between 2 people is much harder I would have to agree.  Moving forward I plan on getting things laid out the way we will deal with these types of  situations before we get to this point. Thank you for the feedback.

    0Reply
  • Steve Olafson
    Scottsdale, AZ · Member since 2014 · 659 posts · 536 votes
    11y

    All of my operating agreements state that I have the decision making for anything up to 5K.  After that number we will vote.

    0Reply
  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    That seems like a great way to have it set up @Steve Olafson , It is definitely something I may have to consider going forward.

    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Matt Taschner:

    Yes @Dawn Anastasi , I think in this case, with the comps considered, that white is the way to go.  I will have to come up with a sold comp list and also houses that are currently on the market that are outdated and use the facts to help with this one.  Thank you for your feedback.

     If you're in it to make money, I don't think either of you should care if the market wanted the trim purple with orange polka dots if it made you more money.  It's not your personal residence so you do whatever the market is looking for.

    Podcast Guest on Show #29
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  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    11y

    Aside from tearing out cabinets and replacing, have you considered refacing? Also, the style of the cabinets can also age a house. Shaker style is classic and modern. Slab front is very popular right now too. Next time when asking a question like this, maybe you can add pics with your post and it would help give you more accurate advice. (light in room, configuration, style, etc.) 

    0Reply
  • Kerry Smith
    Real Estate Broker · Sanford, NC · Member since 2014 · 169 posts · 69 votes
    11y

    @Karen Margrave - Brings up a lot of great ideas in regard to the cabinets. 

    I think @Matt Taschner is on track. He is looking for answers on "how" to handle a situation like this with his partner, more-so than "what" to put in the house.

    1Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    11y

    If these are older solid wood cabinets those are awesome. Those will last a very long time. If you replace them with new cabinets everything except for the real high end stuff these days is particle board crap. I can't stand that cheap stuff.

    When I look at owning apartment buildings I actually love the older solid wood cabinets as they stand up to a ton of abuse and can be refinished over and over again. The new crap is one and done.

    As for white when I was starting out in real estate it was all the rage. Now it has come back again after falling out of style! lol  It's not my taste personally but if it is what's selling then that's the answer.

    If the wood is still popular versus white and it's solid you could refinish and re-stain a more contemporary color.  

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  • Don Coumbs
    Flipper · Cheney, WA · Member since 2014 · 77 posts · 47 votes
    11y

    It has been a real education to me to go back by places I have flipped and look at what my "customers" did with the places.  I'm not saying I have done that many, or that it was my idea originally.  I bigger flipper I know told me that he put in a nice new kitchen, granite counter tops, etc. and the first thing the buyers sis was to tear out the kitchen to do it the way they wanted.

    I personally wouldn't fight with a partner over this stuff.  If the place shows well and people can view themselves living there, then they will buy it and do what they want with it and you will both be happy.

    One more thing - not everyone thinks of 1994 as ancient history.  I'm 46 and I'll bet I view golden oak differently than you. 

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    This issue shouldn't be too hard to quantify.  A 1990s kitchen with its original cabinet finish is not considered rehabbed by buyers in today's market.  Do houses with rehabbed kitchens sell better and faster?  Do they sell for more?

    I hate this part of rehabbing because it's not about my taste or what I bring to the rehab.  It really is about profitability. Don't get caught up in the aesthetics. Either choice can be done tastefully so the issue isn't white cabinets or oak cabinets.  It's the numbers. Get the data and do the numbers. Talk to agents about what sellers are looking for in your area and in your price range. It's one thing if you are an architect or builder with design ego and/or the need to build a recognizable  brand.  It's another thing to sell a rehab quickly and profitably.  If your goal is the latter, keep your eyes on the prize.

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  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    Thanks @Joel Owens , the cabinets are not a real high quality, but they look like they have been take care of over the years.  Staining a different color may work also.  Thanks for the feedback

    0Reply
  • Steve Candor
    New York, NY · Member since 2014 · 146 posts · 16 votes
    11y

    Steve jobs and wozniak when they owned apple starting up only had 45% say each. They had a person who was 10% and was the tie-breaker in situations.


    If it's cheap - I would do it. Cosmetics sell the place. 

    0Reply
  • Matt Taschner
    OP
    Wholesaler · Cottage Grove, MN · Member since 2013 · 87 posts · 14 votes
    11y

    Thank you for all of the feedback everyone.  It has really helped clear things up for me.  Many different points of view and a wealth of information. 

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