Lakeland, FL · Member since 2017 · 44 posts · 25 votes
9y
Amazing job @Cory Iannacone. So talk some number if you don't mind! it seems like a long hold time so did you make your desired profit? What are some of the lesson learned and mistakes you made? did you do any of the work yourself?
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Ravi P. Thanks! I can promise you the photos are not ripped from a magazine. They were well worth the $145.
I did shop around counters. I wanted quartz because of its durability over granite. I end up going with the lowest grade quartz and bought it on sale at Home Depot. It ended up costing about $1,600 and it was financed for 24 months no interest with the rest of my HD purchase. I will definitely continue to shop it around for future projects, but I thought it was a fairly good deal for my first project.
Don't feel sorry for the comps in my neighborhood. They should be thanking me for helping to keep values up.
#1 - Take action. You need to take action to begin the process, and when you are in the thick of it and run into issues, continue to take action to move forward, even if it means making adjustments to you planned course of action--e.g., firing a contractor, making changes a materials / layout design, addressing unforeseen issues that come up (e.g., plumbing), etc. I believe it was Dwight Eisenhower who said, "Plans are worthless, but planning is everything."
#2 - Recognizing and controlling any fears I may have. I believe many people don't get into real estate because of fear of risking their money. If you educate yourself the best you can about the process and coming up with a planned course of action, you truly are limiting your risk.
#3 - Stay positive. When things go wrong, always stay positive. Anything that goes wrong is simply a learning experience to be used for the next project. Adjust and move on.
#4 - Keep notes of the little things to change for next project. There are so many little things that I realized I should have done. They didn't ruin the project. It's just me being anal. For example, I thought the contractor used spacers which were too big for the subway tiles. Despite telling the contractor to use spacers no larger than 1/8", I believe he used 1/4" spacers. Next time I will buy the spacers for the contractor to use so that their is no confusion. Also, after the fact, I realized there were some places where I could have moved / added electrical outlets / tv outlets. Should have looked at that at the very beginning of the project.
Worst thing I did / I would avoid doing again:
#1 Screening contractors. I did a Craigslist ad for a contractor and interviewed a number of them. I also interviewed a number who were referred through real estate agents. I ended up going with my gut on one, but in all honestly, I don't feel like he was running a good business, which lead to me parting ways with him. In my next project, I would do a better job screening--specifically diving into questions like the depth of the contractor's team--how many plumber / electrons does he work with, other projects he has going on, etc.
#2 Contractor agreement - I would have put a penalty clause in the agreement for every day the contractor went over the deadline for completion. Put some pressure on him to complete the job.
#3 Move on issues more quickly as they arise. When it wasn't working out with the contractor, I should have moved more quickly to end the relationship.
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@William C. I did not purchase. The initial plan was to purchase. When I did my analysis back in November, 2016 based on the comps in the area, I was coming up with an ARV of at least $225K to be conservative all the way up to $250K, if the rehab went as planned. (Keep in mind, this was my first project so I didn't know for sure what the end project would look like. This is how I came up with $125,000:
ARV: $250,000
Repairs: $61,000 ($20K for materials, $35K Labor, $6K windows and other carpentry).
RE Comm'n: $13,500
Other Closing costs: $1,500
= $174,000 X .70 = $121,800.
Obviously the .70 is not a perfect science and leaves you some room, so I rounded up to $125,000 (which is .72), as I thought that would be a fair number to both me and my mother.
I'm planning on renting it (because my mother wants to hold on to it). I get the whole issue with wear and tear, but I am going to do the best I can to get the best tenant I can in there. That was also part of the reason for making it a bit nicer--to help cater to a tenant who would want to take care of it. I am hoping for a long term tenant and that any wear and tear issues can easily be addressed at the end and are simply cosmetic.
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Linda S.Thanks for the tip, Linda! I did open the living room curtains. I wasn't sure if I should open all of them. I will keep it in mind for the next one. Thanks for the feedback!
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Samantha Jorgenson Thanks. Yes--a number of issues with the 1st contractor. Everything from locking himself out of the house (remember--I am 1.5 hours aways) to not showing up (or showing up when I was there, only to leave right after I did), not completing the project on time, and issues with him not paying his subs.
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Jonathan Johnson Thanks! My contractor installed the recess lighting, not me. From a cost perspective, I believe I had budgeted about $100 - $150 per light (materials and labor (including all the electrical). I do believe they made a huge difference and definitely brighten up the place especially with the whites.
Rental Property Investor · Walla Walla, WA · Member since 2016 · 480 posts · 346 votes
9y
@Cory Iannacone, thanks for answering my questions, not only for me but for others that may learn from reading it as well. I am currently in the process of rehabbing my 1st Flip property right now. It is amazing how some of the very things you mentioned I have already run into. I love your idea of keeping notes of things to do differently next time as I already have a LONG list and imagine it will do nothing but grow. However, as you mentioned taking action has already caused me to push forward even though there are many issues that we face to complete this project. I am extremely encouraged by your story and the many others that I have read and reread about on BP. I have no doubt that we will eventually be sharing our story for others to learn from and share in our success as you have done for all of us. Thanks again for sharing and keep up the GR8 work!
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@John Weidner Thanks. Funny you mentioned the kitchen sink. I did run into issues with the sink. I did want to move it to the exterior window (which I am happy with), but I ended up mis-measuring for the cabinets. If you look, you'll notice that the sink is not perfectly centered in front of the window. That's because I did not realize that the corner cabinet does not touch the wall; it actually sits about 6 inches away from the wall. I didn't realize the issue until the day before the counter templating when my contractor was finishing putting the cabinets in (another example of my contractor delaying). I had to make some quick decisions, which were to have the sink not perfectly centered and use a smaller sink base (30" instead of 36") and went with a smaller cabinet at the end (to make sure there was enough clearance to get to the exterior door in the back corner of the kitchen.
Re: the dishwasher. I initially had it on wall to the left of the sink. But, the Home Depot kitchen department recommended moving it to the same wall as the sink for easier access in washing dishes.
Now, here's the backstory. The house was actually my grandfather's who passed away in October 2015. My mother had been sitting on it for over a year, paying taxes, utilities, etc. which is when I offered to purchase it from her. This is where it gets complicated. We had an agreement (see numbers above) and I moved forward with purchasing materials, hiring contractors, etc. This is when my sister, who lives in Florida expressed interest in the house. My mother wanted to keep the house in her name (in case my sister moved back to MD from FL), but move forward with the rehab.
I hate to be the party pooper but I don't like the sound of this. It sounds like you got played by your mom and sister. Moving forward, the whole blurriness of the deal only guarantees that more issues or disputes will surface at some point. Its either you bought the house or didn't -- have something in writing. If you didn't then it sounds like you were just helping mommy out or perhaps they were just capitalizing on your emotions. They now have you playing handy man and running errands?
Investor · Harrisburg, PA · Member since 2016 · 126 posts · 377 votes
9y
@Account Closed I respectfully disagree. You have to remember this was my first rehab. I believe this was an excellent opportunity to learn the whole process from start to finish without risking any money whatsoever. There was no capitalizing on emotions here. I could have walked away at any point. But then I would be looking for another house to learn from and most likely would have been taking on financial risk to learn the process. Your worst case scenario (i.e. that I "got played"), really isn't the worst thing. The worst case scenario would have been taking on my first project, not completing it and/or losing money on it. Here, I will still walk away with a tremendous amount of knowledge that I didn't have before without have risk one penny of my own money. I only see upside--the potential to earn infinite return on a $0 investment.
Rental Property Investor · Walla Walla, WA · Member since 2016 · 480 posts · 346 votes
9y
@Cory Iannacone, what type of flooring did you use? Is it tile or hardwood, laminate (Gray flooring)? How much did it cost and where did you buy it? Thanks ahead of time.
Kitchen and bathrooms are all tile flooring. Purchased at Home Depot. Originally priced at $2 / sq ft, but bought on sale (I believe it ended up being between $1.70 and $1.79 / sq ft)
Basement is vinyl plank flooring. (Perfect for basement because it won't be damaged by water. Very easy to take out and put back in.) Also purchased at Home Depot. Originally priced at $2 / sq ft, but received discount (couple hundred dollars off) through HD's contractor bid room.
First Floor is all original hardwood. I just removed carpeting (which had been there since 1965) and had the floors redone and stained darker. (labor was about $2 / sq. ft.)
Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes
9y
One of the first things I look at in kitchen is the sink placement and whether it is in front of a window or not. If not, how easy would it be to move the plumbing. Being a mom who spends a lot of time at the sink, it is important. You did good. I too was a little stumped by the corner unit measurements when I did a layout on the last kitchen. In time it should get easier. I also love that you took the soffit out and made use of the space with larger cabinets.
Love the finishes you chose and how well everything goes together. Your mom should be proud.