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Updated almost 12 years ago, 03/01/2013
Best Value Adding Improvements for Flips - 70k to 110k
What kinds of improvements add the best value? We currently have two flips in process, and I want to make sure we don't waste capital on improvements that won't return value. I will give you the general specs for this neighborhood.
Sqft - 1200 to 1600
Beds - 3 to 4
Baths 1.5 to 2
Garage - 1 to 2 car
Basements - Almost all of them have basements, usually the basements are half (poorly) finished, and need to be torn out and re-finished
Sale Price of a flipped house - 70k to 110k
House age - 1940's to 1950's
Lot Size - .11 acres
I have already heard time and time again kitchen and bathrooms sell houses. I would be interested to know what specific kitchen and bathroom improvements add the best value.
Some of the improvement ideas I have now on these two properties are:
- Paying about 1k more to redo the driveway in concreate instead of asphalt. This has to be done one way or another
- Siding the two car garage. The current exterior is painted cinder block (decent shape), and the house is sided. The garage is similar to this picture except it has a flat roof, and just painted white cider block - http://www.clopaydoor.com/blog/post/2012/03/22/blog/image.axd?picture=2012%2F3%2FSymons+garage.jpg
- I have to redo the roof on the above mentioned garage. It is currently a flat roof, for ascetics I thought about replacing it with a pitched roof?
- Finishing the utility side of the basements floor with something like this - http://www.rustoleum.com/CBGProduct.asp?pid=15
- Stamped concrete vs regular concrete sidewalk to house
- Landscaping?
- Converting a 1/2 bath in the basement to a full bath. This bathroom needs to be rehabbed anyways and currently house only has 1 1/2 baths total
- Removing window awnings - picture - http://i.imgur.com/bLIHO16.jpg
- Most of the copper is missing. I was thinking instead of replacing whats missing go ahead and just replace all of it with Pex
- Putting up a drywall wall on the stairs to make the basement seem like more a finished extension of the house. Currently you walk down the stairs into the utility area, and then turn into the finished basement. In the picture below the wall would be on the inside of the stairs, and then there would be a door into the utility side of the basement. I am standing on the utility side while taking this picture. - http://i.imgur.com/8JnXvDt.jpg
Thoughts? Insight?
Landscaping and curb appeal are a huge part. Remove the window awnings, anything that can be painted, put a fresh coat of paint on. I would NOT pay extra for concrete vs asphalt driveway, fresh new asphalt looks fine. Put the money towards other things, like cabinets and counter tops.
Almost all of my kitchens include new cabinets, granite, SS appliances, and new flooring. Bathrooms get new vanities, light fixtures, generally new tile flooring and tub surround, and sometimes new tub otherwise reglaze.
You should go see some homes that are on the market to understand what your competition is, and what you can do to elevate your product while keeping it in the same price range. You should know what your buyers are expecting, then just give them a little bit extra for the same amount
The most expensive rooms in a home to remodel are a kitchen and a bath thats where I might start if thats where the money is.
Beyond that here is some info written in
2008.
Siding Replacement (Fiber Cement) – average costs are $13,212 and the return on investment is 88.1%
Deck Addition (Wood) – average costs are $10,347 and the return on investment is 85.4%
Siding Replacement (Vinyl) – average costs are $9,910 and the return on investment is 83.2%
Minor Kitchen Remodel – average costs are $21,185 and the return on investment is 83%
Siding Replacement (Foam Backed Vinyl) – average costs are $12, 132 and the return on investment is 79.7%
Windows (Vinyl) – average costs are $10,448 and the return on investment is 79.3%
Windows (Wood) – average costs are $11,384 and the return on investment is 79.3%
Bathroom Remodel – average costs are $15,789 and the return on investment is 78.3%
Major Kitchen Remodel – average costs are $55,503 and the return on investment is 78.1%
Deck Addition (Composite) – average costs are $15,039 and the return on investment is 77.6%
Read more at Suite101: Home Improvements with Best Return on
Looks like a lotta emphasis on outdoor curb appeal!
New siding really makes a house pop. as well as new bushes in the front and a hundred bucks on flowers if your property is marketed between april and oct.
William Bannister - Those stats are a little confusing. Usually percentage ROI means how much you will get back on your invested funds.
So for example - Siding Replacement (Fiber Cement) - average costs are $13,212 and the return on investment is 88.1%
Does that mean you increase the value $24,851.77 or you increase the value $11,649.77?
Steve Wilcox - Assuming I get a good deal on them, is it worth it to use black or white appliances with the right cabinets?
When your replacing the new kitchen appliances do you usually put in a new washer and dryer or just provide hookups?
usually the hook ups are already there, I always provide all appliances. I prefer black vs white, but decide based on what seems most popular in your market.
You must have a stove for buyers to get financing to purchase. Anything beyond that is your decision. I would highly recommend at least putting in a dishwasher as well.
Cabinets are best from a distributor, NOT HD or LOWES.
Take measurements and go to a few stores and stress the fact this is an investment property, price is most important. Do not let them up-sell you beyond what the market demands. You should be able to get chinese cabinets for a relatively cheap price that look great. Also no matter what counter tops you go with put some sort of back splash up, HD sells glass ones for like $5 per sq-ft, so for a few hundred bucks you will have a great looking back splash that really makes the kitchen pop.
You are obviously in a different market than mine, but here are my suggestions:
- No siding on garage, just new paint
- Leave the roof on garage as-is unless it is leaking or really old
- Definitely remove the awnings
- Upgrade to two full baths
- Recoat or resurface the driveway rather than make it concrete unless concrete is standard for the area and for your comps
- For missing plumbing, do whatever is expected for your area
- Trim all bushes and also add some plants with colorful flowers
- Do the basement wall if the basement will be living space or if required by code now, otherwise no
- We never include washer and dryer here, but maybe it's different where you are
- I'd suggest doing stainless steel or faux stainless appliances; it's not much more and they look a lot better
- If you can get inexpensive, nice cabinets from a distributor, great, otherwise Lowe's has some nice looking cabinets for the price
- We always do granite countertops at least, but that's normal here
- If that basement floor sealant is inexpensive, I think it will make the basement feel a lot nicer
I agree with Mike though I too am in a much different market than you (mine is CA). Make necessary roof repairs to garage, do not go new roof unless you have to. Roofs have very poor returns as do pools.
If the plumbing is mostly shot already, go all new and go pex. That is a great upsell on the backend.
Go curb appeal on landscaping, do not skimp. Keep fresh, colorful, and clean.
Driveway is the only item I tend to disagree on, although my area mahjority has cement or better. If at least 1/2 of hoems in your area have cement, go that route, it will add value and quickness to sale.
Skip siding garage, do an earthtone to darker paint color and do minimum 2 coats. Much cheaper, will look nice, and it is quick.
Kicthen - go new cabinets - wood stain, granite countertops and SS appliances.
Bathrooms, upgrade vanities, replace old toilets, add mirrors, and nice looking plumbing and light fixtures.
Originally posted by William Bannister:
Beyond that here is some info written in
2008.
Siding Replacement (Fiber Cement) – average costs are $13,212 and the return on investment is 88.1%
Deck Addition (Wood) – average costs are $10,347 and the return on investment is 85.4%
Siding Replacement (Vinyl) – average costs are $9,910 and the return on investment is 83.2%
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Just to put it out there, those look like retail prices, and if your paying anywhere near those prices in most of the country, you're not going to find yourself making much money as a rehabber.
Good point J, I did not even look at the pricing part. Most all of the pricing appears to be full retail and I agree with J. Also, regarding the % of returns, that too appears to be pulled out of some hat by someone and I assume not from William Bannister but quoted from something he found.
For instance, deck addition returning such a high % is just not true at all. Building a deck will likely have a very low return similar to replacing a roof or adding a pool (but not quite that poor)
Couple of my thoughts, I believe we are in similar market.
Based on the viewpoint of the top two retail realtors in our area...
100k house I would do not put in granite, more than double the cost even if you go youngston granite, cheapest place I have found in ne ohio.
We never do granite at under 150. Generally 175 and up.
120, 000 to 150, 000 we do fx hi-def formica with bevel edge (can buy the bevel at carter lumber)
We do all stainless appliances
Kitchen Kompact has some of the best prices on nice looking cabinets. Keim lumber in Charm will deliver for free including to your area. Home depot can order the same in a few days as well as lowes.
Lowes is about 20% higher than Keim, Home depot was about 20.00 more, Carter Lumber was 26.00 less than Keim. But the convenience of Keim is worth it for me.
I email basic layout measurements, within a day or two I have drawings back, I make a few adjustments when I like the layout we order, three days they are in ready to be delivered, I get a copy of drawing including "elevations" so cabinet guy knows exactly how they get installed. And no I do not get a comission from Keim, just happy with their service and prices :-)
We always add a breakfast bar if possible, three barstools, three decorative lights above on a dimmer.
Our single most requested staging item to be left in the house from buyers, are the barstools
I would paint the garage.
I would not pay extra for concrete in this area.
Landscaping is crucial.
Staging, we always do that.
We also tile bathroom floors and tub surrounds
Will Barnard and J Scott
Where do you get your materials below retail? Right now I haven't really ventured beyond Lowe's. Well, I did find a granite guy who seems pretty cheap, but I have nothing to really compare to.
I'm guessing small local businesses?
Manuel Acuna - Getting discounts at box stores is essential. Items I never buy at box stores are: Carpet, wood flooring, kitchen cabinets, granite, baseboards and door casings, any install service, and usually not lumber.
Go find other service providers (small shops) that can supply these items at better prices.
Originally posted by Manuel Acuna:
Where do you get your materials below retail? Right now I haven't really ventured beyond Lowe's. Well, I did find a granite guy who seems pretty cheap, but I have nothing to really compare to.
I'm guessing small local businesses?
For things like doors and lumber, go to a local builder's supply shop. They will come in lower than a big box store for stock building supplies.
For finishes, use the contractor/Pro Desk at Lowe's or Home Depot. You can generally get 10-20% off retail. Or you can use the 10% off coupons and get 10% off retail.
For appliances, find a bulk appliance dealer who can sell below retail. You can generally get retail pricing, but without having to pay tax or delivery.
For cabinets, find a cabinet company that gets semi-stock boxes from China -- they look like custom cabinets at about a third the cost.
For roofing materials, buy the material direct from the supplier and have it delivered to the job -- that way you don't pay markup for the materials through the installer.
For granite, find out who the other investors are using. The expensive part of granite is the fabrication, and the cheaper guys are the ones who are getting access to the fabricator off-hours (side jobs).
Now, all that said, I tend to buy everything I can at Home Depot (10-20% off retail) and let my contractors supply the rest. The bulk of your savings isn't going to come from material savings, but from labor savings.
The first rule of making money:
Don't lose money.
Save every penny you can. There has to be a definite known ROI on every dollar spent.
That said: Don't underspend and not supply an adequate product.
-Steven
Dell Schlabach, I saw Youngstown Granite lists their prices on their website at $45/sqft at the cheapest. Do they do contractor discounts? I found a place on the west side that installs it for $30.
Where in Akron/Canton do you flip? The neighborhood Chris is talking about is a fairly (recently) depressed inner-ring suburb (South Euclid) where I haven't seen any recent sales above $80k go without granite. Given the availability of cheap granite here, I guess it's not surprising.
I agree with you on the driveway--concrete in Ohio is a waste of money, although laughably at least 75% of the homes in this neighborhood have concrete drives.
I'll check out Keim. I've heard of them from my lumber sales buddy and have heard good things.
Chris C.
Re: Youngstown Granite Pricing
Just put an order in for a property in North Canton. 39.00 sq ft.
Under 80k with granite. Wow!! thats the importance of knowing your market, specifically.
I have seen a couple guys do granite in cheap houses in our area, they over price them by 20k sit there for 4-6 month as they drop the prices. The rest of the house, many times leaves a lot to be desired, its as if someone told them granite will sell their house, but forgot to mention other key rehab elements are a LOT more important than granite in our market for houses under 125k
We just closed one in Paris, no granite 169,00, three offers in the first week, one in Copley three weeks ago, 179,000 no granite sold first weekend on market, one in Stow three month ago, no granite, 140,00 multiple offers the first weekend, sold above list.
The end of the year we sold one in Kent and one in Ravenna, 89k and 95k, obviously no granite. .. and we are not selling below market .. Stow identical house across the street went on market a week later, good condition, listed at 145, dropped to 139,00 dropped to 135,000 still sitting there 3 month later.
One in springfield same situation, similar house across the street on massillon rd, we had multiple offers first weekend, list at 89 sold for 93, one across the street went on the market week before we were done, 95,000 today seven month later its still sitting there priced in the 80's.
We work pretty much Stark, Summit and a bit of Portage Co. just got our first deal in Hudson, thats our farthest north one, and our most pricy to date 240ish, that one gets granite :-)
I have used granite in only one house last year.
Do you have the contact info for the $30.00 granite co I may start
The granite I just ordered for North Canton for 2,500, I could do in the FX Formica with bevel edge for 800-1000 installed
I appreciate the info.
Dell, check out Direct Import Home Decor. They have some pretty nice cabinets, too. I have no experience with their product yet but I think I am going to go with them. Their showroom is worth the visit.
For a kitchen this small the granite will cost $1400 installed. I haven't priced formica yet but I imagine there's probably a minimum amount to get the guy out to site.
You're right about knowing this market. This is a really weird one where everyone is underwater on their mortgage by 50k+, demographics are changing, and foreclosures are plentiful. I think it takes some extra cajoling for the buyer to consider living here as opposed to a nicer, more stable, and more expensive adjacent suburb. I reckon the added amenities like granite and a cheaper price is what pushes people to pull the trigger.
Dell Schlabach, what other things do you consider most important for a our markets, putting the granite differences aside?
Originally posted by Will Barnard:
Originally posted by J Scott:
Exactly. Also add to that the fact that the less time you spend dealing with these types of logistics, the higher your hourly earn and the more efficient you are (since you're spending fewer hours on the project).
I remember my first few projects, where I literally spent 20-30 hours going store to store to find, pick out and buy materials. These days, if I can't make it on a spreadsheet template and fax it to my guy at Home Depot, then I let my contractor buy it himself. I don't like to spend more than 20 minutes per project dealing with materials.
I'd say that knowing your market exactly is what you need first before judging any money you want to spend. Yes, kitchens and baths are usually always important, but here's one example:
In my area, on what I'd call the "lower middle" end of the market, houses between maybe 70k to 120k or so, I've found that sticking some money into a finished basement, or at least part of the basement, can be a good investment. My understanding is that usually these houses are smaller, like one I'm doing now, an 1100 sq ft 3 bed ranch, where the only non-bedroom or kitchen room is the living room, which is probably 10' by 15' in size, not very big if you want to have the whole family over for instance. So, having half or 2/3 of the basement finished, even if its real basic, just paneling and carpet or flooring, really appeals to a lot of buyers in that range.
Now, when the prices go up and the houses get bigger, a finished basement doesn't seem to return on my investment nearly as well, with the one possible exception being if the house would have a "walk out" lower level and you could put something really nice down there, but even then I don't really know if the large expense would be worth the extra time for the project and the return on the sale price.
Christopher Boggs, Dell Schlabach, Chris C. - you might want to check out Windy Hill Hardwoods in Canal Fulton.
Address: 4500 Erie Ave NW, Canal Fulton, OH 44614
I don't think they have a website, but their showroom is well worth the visit.
Originally posted by Cheryl H.:
I know the place well, their cabinets are excellent quality but a bit pricier than what we put in.
I get some great deals there on 18x18 tile there.