After about 145 days on the market, our Century Home flip is officially sold! We couldn’t be happier that the home went to a younger gentleman that is moving to Cleveland from the East Coast.
One of the question we kept getting via email was “Did you make any money?”
We did – a little bit. The trouble with the Century Home was that it’s big and, while it is in a good suburb, it’s on the periphery of the more desirable areas.
As a rule, my partners and I target flips with a net return of 30%. If it’s less than that, we don’t want to take the risk. This one came in well below that, but thankfully we still managed to turn a little profit.
The chart below shows a general split of how it all worked out. Rehab costs ate up 57% of total proceeds, with the purchase price taking up another 28%. Those are our “Hard Costs.” Rehabbers generally have a good sense of how to estimate those. What many newbie flippers forget, however, is that there are soft costs, as well – interest, commissions on the sale, insurance, taxes, lawn maintenance, snow removal, utilities, etc.
Are we happy with 5%? No, not at all – but, you win some and you lose some. It’s a numbers game.
The goods news is, we’re back at it – we’ve got two properties under contract and we can’t wait to tell you about them!
I am not a designer. Managing construction timelines, staying on budget, yelling at contractors, buying them coffee and doughnuts when they work weekends, keeping our investors informed of progress we’re making – I can do all of that. But a designer I am not. In picking finishes, I rely on Houzz and my wife. Both are a good way to go over budget!
After a walk-through with my wife last weekend, she was rather impressed with the progress we were making – until she walked in the master bedroom. It lacked the “wow” factor she thought was needed to sell the house. “Spa-like” and “glitz” were two words she used to describe what the feel of the room needed to be; “boring” was how she described the current plan. Luckily, we were able to find savings on another part of the project, so we had a little money to work with.
So what’s better than a fireplace? This is the look we’re going for:
For the stone veneer, we decided to go with the Sierra Vista architectural stone from TileShop. The fireplace we’re using is the Dimplex Lacey. All told, this change order will cost us about $1800 in material, $400 for the fireplace and $1300 for the stone. …about $400.
I had our contractors put up cement board this weekend, as seen below. The stone and fireplace will be installed later this week!
The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.
Here’s an excerpt:
The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 49,000 times in 2014. If it were a concert at Sydney Opera House, it would take about 18 sold-out performances for that many people to see it.
Click here to see the complete report.
With Christmas fast approaching, construction at the Century Home has come to a pause for now. Our crews plan to get back at it next week. With rough plumbing and electrical finally complete, our drywallers will be kicking off the New Year with spot repairs throughout. Soon as they’re done, our tile guy will begin rebuilding the master bathroom.
While my wife and I certainly love to pick colors and tile, we are not interior designers. Far from it. Fortunately for us, with online resources like Houzz and a brand new Tile Shop nearby, we don’t need to be!
The great thing about The Tile Shop is that each store has TONS of kitchen and bath vingettes located throughout the store, so you can easily envision what the tile might look like in your home.
We opted to recreate the Eleanor Bath, with a few alternations of our own. Can’t wait to show what they are, but for now…here is a sneak peak of the tile we’ll be using in our master bath.
Why do we yawn a creation and thrill a destruction?
I have no idea, but destruction is my favorite part of a renovation! The process of wiping the slate clean and starting fresh is extrelely rewarding. That, and hitting walls with a sledgehammer is a great way to relieve stress!
Demo is largely complete at the Century House and we’ve begun to put it back together, but I’m a little behind on the blog so let me catch you guys up!
Demo’d butler stairwell in the kitchen and closed off access. Increased size of the kitchen dramatically!
Cabinets gone. Drywall gone. New electrical being installed. Oh, and 10 foot ceilings!
New can lighting being installed in the living room. We removed numerous sconces throughout the room in favor of overhead lighting.
This used to be a four seasons room which was enclosed at a later date, but some of the exterior aspects remained. We removed / closed off some of the windows and framed over a door which was an awkward second entry to the first floor bath.
Master bathroom. Drywall removed in preparation for new plumbing. Window over tub closed so we can have a full wall of tile!
Kid’s bathroom. Drywall removed in preparation for new plumbing. Window over tub closed so we can have a full wall of tile! The cast iron tub is almost 350 pounds!
Until next time!
My wife and I own/operate a few properties that we rent to the students of our Alma Mater, John Carroll University. We’ve heard plenty of landlord horror stories, particularly those related to college students, but (*knock on wood*) all of our tenants have been tremendous thus far.
Anyways, we’re planning a kitchen remodel at one of the properties over their Christmas break. I started a text message thread with the kids to make them aware so they could get their stuff out of the kitchen. As expected, they were thankful the work was being done. After all, they’re getting new cabinets and granite. Why wouldn’t they be happy?
Then came 1:12AM on a drinking night. Apparently, they forgot their landlord was on the thread:
The Century Home we’re currently rehabbing has a wonderful mud room in the rear of the home, but it’s largely an empty space that is calling for a wonderful built in storage unit. In that we’re assuming a move-up buyer with 2-3 children will be buying this home when it’s complete, we thought it’d be appropriate to build a custom storage unit with both seating and ample storage for the kiddos.
Our inspiration is below. Which one do you like the most?
We’re officially on day 6 of construction at the Century House. So far, our HVAC contractor has been removing the existing radiators and associated plumbing in preparation for a whole-house forced air system. Our general trades will begin demo of the kitchen, bathrooms and a few walls on the second floor this week. We’re beyond excited to be in the full throws of rehab.
I stopped by the house earlier this week to take a few “before” interior photos. Below is a quick photo tour of what will, in 3-4 months, be a beautifully restored home in a storied neighborhood.
Note: The home was vacant for two years and was broken into by some punk kids, who decided to add a little bit of their own vulgar graffiti.
Butler stairwell and butler’s pantry off the kitchen. Both will be demo’d to increase the size of the kitchen by 40%.
Kitchen – cabinets and soffit to be demo’d this week. Increased square footage will allow for a center island.
Dining Room – love the coffered ceiling!
Looking down from the stairwell to the front entry. To the left, the living room. To the right, the dining room.
Center hall colonial – stairwell leading to the second floor.
HUGE living room.
The hardware in the home is tremendous!
Third floor. Will make for an amazing rec room.
Second floor hallway.
Current master bath.
Hi Guys. Love the blog! Thanks so much for sharing your experiences with us; it’s awesome to see. Flipping a house is something my husband and I have wanted to do for a while, but aren’t really sure where to start. We both have full-time jobs, so I’m not sure if we even have the time. Do you do the work yourselves, or do you have contractors? Thanks so much. I can’t wait to see how your latest project turns out – it’s huge!
Thanks for the email and the
kind words! Great question. We’ve done both.
For our first property (a rental) we basically did everything ourselves (paint, tile, flooring, bathrooms, finished basement, etc). The rehab took a total of 63 days, with my father and I working most weeknights from 6-10 and then weekends from 8am – 8pm. We subbed out plumbing and the garage rebuild. Between my full time job and the rehab, I was working about 80 hours a week. It wasn’t ideal, but we saved a lot of money. We also do most all of the work at our other rental properties. If you’re not afraid of putting in the time, then by all means do the work yourselves! It’s a great way to appreciate and understand everything that goes into a rehab.
That said, I’ll probably never do that again. For our Century Home flip we’ve subbed out the entire scope of the project, from electrical and plumbing to paint. There is certainly pieces of the project we could do ourselves to save some cash, but given the size of the house there is no way we’d be able to meet our project timeline. Managing a crew is a full-time job in and of itself, so while I may not be laying tile I’m sure I’ll be glued to my phone.