I love beautiful homes. Seriously, you know when you walk into a house that is incredibly decorated and boasts charm, beauty, great function and ingenuity. Maybe it’s one of those houses from MTV cribs. Whatever it may be, you like it.
In part I first wanted to become a real estate investor because, let’s be honest… homes are awesome!
And after all, if the people on HGTV can rehab a massive house in just 30 minutes on television, by God, I’m sure I can figure it out. 🙂
So you finally get your first property, and you know exactly what you are doing. Between the candy bars and the soda in the checkout aisle at the grocery store, you spot several magazines that have your dream house on them, and you proceed to purchase not just one, but five different magazines so you don’t miss one you love. And one by one, picture by picture, and page by page, you perfectly cut them out with X-Acto knife precision and create an elaborate display of your future property renovation.
You then spend hours, days, and maybe weeks picking out the finishes to your pad. Perfect in room colors, maybe one color for each room, matching but not the same, of course. And then you spend the next three weeks in Home Depot, Lowes, and every tile, cabinet, and granite shop you can find — just to make sure you have the style and every possible corresponding color combination worked out.
This is fun stuff… but definitely not practical. And it might not be very useful, either.
Before you start your next renovation project, you need to think through what you are working on, and what purpose whatever you are putting in is serving.
We have several different levels of finishes inside our projects.
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
3 Key Levels of Rehab Finish
Inside our rental properties, we use the same color, the same tile, the same vinyl floor, the same toilet, and sink and faucet every time (assuming the items are still available). All the electrical plugs and switches are replaced, windows repaired or replaced, a new roof if necessary, and we make sure that the items that hit us later (like cleaning out the main plumbing line or checking HVAC and having it serviced) are done before the tenant moves in.
We spend money on the fixtures that will last, but are basic. No fancy toilets or special bathroom vanities. It doesn’t pay to spend more here. It does pay to have good quality faucets (don’t confuse with expensive) and toilet, as well as carpet that will last if you are putting that in (we redo hardwoods everywhere if we can).
Tenant finish is about making the property safe, presentable, and at a quality that shows the tenants what we expect, but also is on the value side of the available options.
We pride ourselves on performing amazing rehabs. Even the house we just listed for $69k on the MLS is still VERY nice inside. New hardwoods that shine, paint inside and out, faucets, vanities, floor vents, etc. But we didn’t put granite in there., Or a fancy faucet either. I found an incredible deal on a stainless steel stove and bought it for less than $400 with free delivery. Done deal. We made sure everything was done correctly, to code. Electrical is updated where it needed to be. And we put new fixtures, ceiling fans, light fixtures, etc.
We have all one color on the walls. Everything inside and out shows well. Another house we did was at a bit of a higher price point, and we were able to save the cabinets, put in 2 cm granite, a tiled backsplash, modern colors, and new vents, plugs, and outlet covers.
It’s amazing how much the small things, like well-caulked windows before paint and getting the plugs and switches updated, make everything look better. Don’t scrimp on little things that could make a big impact on how the property presents itself.
Another place you can save is on light fixtures. Yes, I found one for our Woodland flip (two story, 4 bedroom 2.5 bathrooms, built in the late 1990’s) that I loved for $400, but I also found a very cool one for less than half of that. Guess which one I bought? You guessed it… and it still looks awesome.
Higher End Rehab
We have two projects now that I would call a higher end project. Both properties were built in the ’50s-’60s range and needed a lot of attention to windows, wood rot, some framing, updating electrical and plumbing, updated HVAC, and more. We work with a supremely talented designer who helps us make sure our finishes are on point, as well as every detail from the tile on backsplashes to interior and exterior colors. She is very helpful and an amazing resource.
We also do nearly everything lighting-wise in the main living spaces with can lights. I am not big into the pendant lighting (we use it, but very sparingly). I like clean lines; I’d call my taste classic contemporary. We like the grey/beige colors. White cabinets are hugely popular right now, and cool touches really make spaces pop.
One of the ways we do that is with the tile selections and patterns. You can easily make something look more custom with brick set patterns or even with other, more complicated patterns. Just make sure your tile setter knows what the heck they are doing! We’ve also used mosaic tiles in the showers or on bathroom floor, but we don’t just use the 3 inch line around the shower; we use larger sections of it to make a more dramatic line up a wall or inside corners or a large shower. We have a massive and very awesome shower in the master of one of properties… that is more than 6 feet by 5 feet! It’s amazing. We did a pebble floor in that one.
Don’t be afraid to keep it simple. Let the quality of the work drive what you are selling, especially in the rehab houses going to end buyers. Keep the rehabs nice, but don’t go overboard with the rental make-readies. Keep them safe, clean and not easy to break.
Go with your gut. Make the right decisions. And don’t be afraid to bring in people who are talented at what they do, whether that be a second opinion for a contractor, designer, or landscaper. And go into the project knowing you will need to make decisions along the way. It ALWAYS happens!
What are the best decisions you have made during a project that paid off in the end? What were some decisions that you made that you had to go back and fix?
Leave a comment below, and let’s talk!