house flipping

Measure Twice, Cut Three Times

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I obsess about the big picture – am I on budget, will I meet my project deadline, are my partners happy, are the contractors doing good work – things like that.

My wife…my wife obsesses about the finishes.  She’ll spend 15 minutes debating me about shades of gray (hehe), the placement of the kitchen island, the budget (“but for $200 more, this is light fixture soooo much better”) … and that’s exactly what I need!  I have little interest in being bothered with that kind of stuff; I’ve got far bigger issues to deal with.

With that said, it’s no surprise that I missed a rather glaring issue in out master bedroom that she saw within the first 5 seconds of stepping in the room.

As we’ve wrote about in the past, the master bedroom went through several iterations – we ended up expanding the size of the closet and adding a large fireplace.   This all happened after we had drawn new electrical for overhead lights.   You get the picture … the lighting placement just didn’t look right after we moved things around.

The first time we moved the light placement was after we expanded the closet.  I told my electrician to “center it.”  I never looked at it again.

My wife, however, quickly realized it wasn’t “centered” with the fireplace…it just looked off.  Fortunately for me, my father is an electrical engineer and charges me $0 per hour.  A little father-son bonding and 1 hour of work, the lighting was moved for a third and final time.

Check it out below – far left hole (placement #1), large hole in the middle (placement #2), final hole centered with fireplace (placement #3).

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Master Bath – Tile Sneak Peak

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Construction is moving fast! Much faster than I can keep up with on the blog!  Our crews are finishing up some minor drywall repairs, installing trim around the new doors and windows, crown molding in a few of the rooms and, most importantly, tile in both the master and kids bathroom!

Here is a sneak peak, with compliments to The Tile Shop for their awesome product selection and design inspiration. Can’t wait to show off the finished product!

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Dance Floor. Lets Work!

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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:

jcu texts

Century Home: Second Floor Layout

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Old homes present interesting problems, especially with the intention of flipping. One of the most common characteristics of  homes built during the 1920-30’s is the lack of bedroom space.  In the early 20th century, families typically spent their time together on the first floor and rarely retired to their bedrooms for anything but sleep.  Living rooms and dining rooms were huge, but bedrooms and kitchens were tiny.

Today’s buyers, however, want space and lots of it.  Master suites with an attached bath are huge selling points, but rarely seen outside of new construction.

With that in mind a quite a bit of space to work with, we’ve decided to do a little bit of rearranging on the second floor.  The home has five bedrooms and two full bathrooms on the second floor, none of which are all that big. As you can see in the architectural drawing below (thanks, dad!), we’re turning the home into a four bedroom property.

The current plan is to create a large master bedroom that makes up the entire right side of the second floor.  The cost in doing so was pretty nominal (demo two closets & build two walls), but I think it adds tremendous value and appeal to the property.

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New entryway to the master bedroom, looking from the hallway. Closets used to separate the two rooms.

New entryway to the master bedroom, looking from the hallway. Closets used to separate the two rooms.

Reader Email: DIY or Hire a Contractor?

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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!

– Joan

Hi Joan,

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.

Good luck!

The Century Home

milingz 1 Comment

Hi there! It’s been awhile.

It’s been a pretty hectic time on our end! My better half will probably be giving birth in the next week to a beautiful baby girl and over the last few weeks we’ve been focused on getting her nursery finished. We’ll share those pictures with you soon!

As if that weren’t enough work, we’ve spent the last few weeks interviewing contractors for our latest rehab. Typically it shouldn’t take this long to get a scope of work and bid in place, but alas this house is MASSIVE. Like, you can fit all of our other properties inside of it big.

All told, the house is about 4,000 square feet spread across three stories (not including the basement) and is in need of some love in pretty much every room.

Nestled near Coventry Village in historic Cleveland Heights, it’s a center hall colonial style home that has been occupied by the same family since it was built in 1914. The previous owners did some work here and there, but it’s very much been untouched since it was built. It looks pretty shabby today, but I imagine that it was wonderful place to call home 100 years ago.

We’re hopeful that we’ll have a contractor selected in the next week and have construction begin shortly thereafter. We’ll be sure to keep you in the loop.

Until there, here are some exterior shots:

Affordable Frames for a Picture Wall

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Affordable Picture Frames for Photo Wall
Affordable Picture Frames for Photo Wall
Affordable Picture Frames for Photo Wall
Affordable Picture Frames for Photo Wall
Affordable Picture Frames for Photo Wall

Our house looks like its straight out of a catalog.  Unfortunately, it’s for all of the wrong reasons!  Like some of our favorite catalogs, we have plenty of wall art, but none of it is personal.     That is, we barely have any photos of our family.  And by barely, I think the exact count is eight.  Yes, EIGHT photos of our family.  Our parents must be miffed when they come over.  I certainly would be.

The quickest way to go from a grand total of eight photos to twenty or more is through the use of a photo wall, like those pictured above.  While I love the gallery feel of more uniform layouts, the two spaces we’ve dedicated as our photo walls – the stairwell and den – are better suited for a more collaged look.

While the final product is beautiful and can do wonders to liven up a room, many people write off the idea of a photo wall because of the wide variety of frames and, in many instances, their prohibitive cost.  While you can certainly splurge for gallery-quality frames, you don’t have the break the bank for ones that are right for you. If you’re looking for a more random look and don’t care too much about uniformity in size or style, your local estate sale, flea market or re-purposed furniture store is the best place to start.  In that these may be worn, be sure to look for ones that are sturdily built and can be freshened up with a coat of paint.

Should you be more interested in a uniform look, we’ve put together a list of some quality frames at affordable prices.

  1. Multipack Templates for Hanging Frames – If you don’t feel like measuring, this is a perfect product at just $9.99.  It allows you to quickly lay out a template, which can be adjusted, before drilling any holes in your wall.  I bought two.
  2. FJÄLLSTA or RIBBA Frame, like the rest of Ikea’s offerings, are cheap and sturdy.   While we love that each comes in various sizes, they’re made of cheap-looking plastic rather than glass.
  3. Feeling a little lazy? Try the Pinnacle Create a Gallery Set from Walmart.  It comes with seven frames of varying sizes which, like the multipack templates above, can be hung in various formations.  The quality is surprisingly good – real wood and glass – and the frames are sturdy.
  4. Urban Outfitters isn’t just for graphic T’s and summer concert gear. They offer a set of 10 frames, which come in varying sizes, for just $39.  The primary downfall with these is the lack of sizes in the 10-pack, so these frames may be more suitable for a kids rooms or smaller wall.
  5. If you don’t mind spending $100 for three frames, the offering from CB2 is tremendous.  The frames are clean, well built and really do give off the professional gallery vibe.  Mix and match with some frames from Crate & Barrel to complete the look.

Of course, you can never go wrong with Michaels.  Just time your purchase with their regular 40% off sales.

 

The Search Continues…

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Oh no!  After being under contract to purchase our first flip, we had to back out of the deal after the general inspection brought to light some serious issues!

I mentioned in a previous blog post that trying to buy a home in the winter is miserable.  With foreclosures, typically the heat and power are switched off, the driveway is covered with a foot of snow  and the overall condition of the home is questionable.  Aside from those physical unpleasantries, the snow in particular makes inspecting the exterior of a home problematic.  If I can’t see the driveway, roof or enter the garage, how will I know if they’re in need of repair?    I do rely on Google Maps satellite view to a certain extent, but even that is only somewhat helpful given that the photos may be a few years old.

To ease our minds, we hired a general inspector (as any homebuyer should) to get their take on any major issues with the home.  And wouldn’t you know, there were quite a few big ticket items!   The biggest of which was the $14,000 needed to build a brand new garage – something we didn’t get to inspect ourselves due to a large mound of snow blocking entry into the structure.  A slight oversight on our part, but alas that’s what inspectors are for.

Regardless of these issues, the home was still a great opportunity – but not at our initial offering price.  So, we went back with a meaningfully reduced offer, which they didn’t even consider.  The search continues!

We put in our sixth offer in the last three months on a beautiful two-family property earlier this week.  It’s a short sale, so it may take some time to close, but negotiations have been going well thus far.  It needs quite a bit of work, but we’re excited by the opportunity to restore the home to its former glory.

How We Find Our Flips

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A few of you have asked how we found our first flip.  Finding a suitable property is pretty easy; that hard part is seeing it before another investor has already placed a bid on the property.

To actually find the homes, we use both Zillow and the local MLS (Multiple Listing Service).  While Zillow is a powerful tool, it usually updates a day or two after the MLS.  As an investor, timing is key because some of the most desirable properties will have multiple bids within the first several days.

The MLS system sends us an automated email each morning with newly active listings in our target market. These listings are filtered based on our criteria, like the city, number of beds/baths and square footage.  While important, I look at those later in the process. The first metric I look at is price (can I make a profit?) and the description (does it read: TLC-needed, DIY special, updates needed, foreclosure, etc).   Oh, and the pictures.  I look at the pictures.  The uglier, the better.  From there, I build my list of potential investments.  It’s time consuming, but I typically do it over a glass of wine.

Once we have a list of properties we’d like to see, our Realtor schedules a marathon showing session.  We spend less than 30 minutes in each home, mostly because touring foreclosures (no power / no heat) in the Cleveland winter is miserable.  Check out a few of the properties we’ve toured and bid on, but ultimately lost to other investors:

FML, indeed!

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The kitchen in my college house was nicer

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Grandmas house

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Not bad, but it still needed some love

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Know any homebuyers?

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This blog will serve a journal tracking the growth of what I hope one day to be a sustainable real estate investment business. I have high aspirations and have learned that putting goals in writing creates an environment of accountability. If you know what I want to build, then I am more inclined to do it. I’ll share those aspirations at some point, but will for now will focus my writing on the first step…our first flip.

With all that said, do you know anyone who would like to buy a house? If all goes according to plan, we’ll be selling a beautifully renovated home in about six weeks.