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Updated over 8 years ago, 07/06/2016
Latest Project Photos - BP Partnership
I don't post a lot of Before & Afters here (I know people get bored of them), but this one is so nice that I wanted to give some credit where it's due...
This was a three-way BiggerPockets partnership between @Todd Whiddon, myself and another BP member who would prefer to remain nameless (he shuns the celebrity lifestyle ;-). We originally were planning on a very large renovation, but after digging in and starting work, we realized that tearing it down was probably the better decision -- so we went back to square one and did things right. Good lesson that trying to save money by doing less can ultimately cost you money if you're not smart about it.
Todd did pretty much all the work, so he gets full credit...
Here is a Before pic:
Here are some During pics:
And here's the final product, getting listed today:
@Todd Whiddon Street name rhymes with "Krystal" and shares the name of a Nascar race town?
PS - Clues were deliberately Southern to throw off the buyer who is probably moving to Atlanta from Chicago 'burbs.
@Todd Whiddon@J Scott@Rick Baggenstoss @Matt Wood
Yes, that neighborhood is fantastic. The video also had "Bristol" on top :-)
I am actually in Leafmore Hills, just down the street. Same school district. Fantastic job on the house, BTW. One day I plan to pop a top on my house!
@Rick Baggenstoss wins the prize for creativity! I'm sure @J Scott will send you something autographed or perhaps a lock his hair.
@Sheryl Gurvey wins the Captain Obvious award, and reminds me that maybe I should come up with better titles for my videos!
Here's the NEXT riddle of the day..... Who can guess what lurks down here???
@Todd I have some ideas ...
1. AirBnB apartment
2. Unfinished Man Cave
3. In Decatur ... Future Craft Beer Distillery
4. Spider Hangout
5. Wine Cellar (and dog house)
6. "Rain catcher"
7. Misc. Line Item in the Budget
8. All of the above
@Todd Whiddon this is fun.
@Todd Whiddon Thanks for the CMA and all the details. I see that houses move pretty fast and often go for a little over asking. A very strong momentum market you are riding.
Originally posted by @Barbara G.:
That is beautiful
Even more beautiful would be the numbers. BP and Me we just think numbers are beautiful.
So we are asking what it cost?
What did the Renovation cost?
What are the holding costs?
How long did it take?
How much are you asking for it?
What is the potential profit?
Ditto. What she said...
Originally posted by @Christopher Telles:
Originally posted by @Barbara G.:
That is beautiful
Even more beautiful would be the numbers. BP and Me we just think numbers are beautiful.
So we are asking what it cost?
What did the Renovation cost?
What are the holding costs?
How long did it take?
How much are you asking for it?
What is the potential profit?
Ditto. What she said...
We're gonna hold off publishing the exact numbers for EVERYTHING until it's sold, but we're gonna make about 1/2 what we originally thought due to all the problems and delays we encountered. But even the 1/2 isn't so bad.... :)
Originally posted by @Rick Baggenstoss:
@Todd I have some ideas ...
1. AirBnB apartment
2. Unfinished Man Cave
3. In Decatur ... Future Craft Beer Distillery
4. Spider Hangout
5. Wine Cellar (and dog house)
6. "Rain catcher"
7. Misc. Line Item in the Budget
8. All of the above
@Todd Whiddon this is fun.
I think you pretty much covered all the bases with this one other than nuclear fall out shelter and Breaking Bad cook kitchen, but all of them are possible and will be MUCH more comfortable because we installed.....
THE NO SO CREEPY CRAWL SPACE
Not only did we SPRAY FOAM the attic, we also SEALED the crawl space with spray foam and upgraded vapor barrier! It's not that much more to do this and it makes a HUGE difference in indoor air quality and comfort!
Since this house has a partial basement AND a crawl space, we decided it was worth the extra cost, since if we didn't do it, the partial basement would always be STANKIN' with that mildewy smell all to common in crawlspaces and other subterranean lairs!
I HIGHLY recommend anyone building or rehabbing homes involving crawlspaces to check out the science and benefits of a SEALED CRAWL SPACE!
@Todd Whiddon- Why no staging? Do you ever stage a house?
Originally posted by @Heather W.:
@Todd Whiddon- Why no staging? Do you ever stage a house?
I used to stage ALL my houses... now I have a storage unit full of staging furniture!
Here's why this one isn't staged-
1. I've gotten lazy in my old age
1.5 @J Scotts wife Carol who is the best house stager EVER, moved away ;''(
2. All my staging furniture is for lower end 100-200k houses
3. I'm waiting for someone to recommend a FANTASTIC staging company for higher end homes in Atlanta
4. Most everything has been selling pretty quickly lately without staging
5. Did I mention I'm lazy?
Here's some staging pics from our projects back in the day before I became a Real Estate Curmudgeon....kinda makes me want to stage things again!! Curse you Heather..... So anyone out there that stages houses or knows someone that stages houses hit me up, I need to get back in the staging game!
@Todd Whiddon You have a fantastic photographer! Great pictures really do make all the difference in marketing. Nice job, guys. Keep up the good work! The house is gorgeous :)
- Dawn Brenengen
- Podcast Guest on Show #101
So what is the end game for the rehab house market??
I don't play in that space but I have talked with plenty of bigger players. Many were holding a bunch of inventory in 2006,2007 and got spanked pretty hard. They were overexposed on the building and development side for their portfolios.
Some went under and lost it all. Others treaded water and are just recovering. This up cycle will eventually end as well.
I have seen some go from 5 million to 1 million in down turn and now back up to 2.5 or so recovering.
On the commercial side my developer friends are playing out if the lease up rents are not as strong as predicted and the interest rates go up causing to have to sell for a higher cap then they will just convert construction to perm. and get down payment back and keep the cash flow until the cycle points to selling again.
The development cycle and time is kind of like a game of chicken almost. I am sure all exits are played out just interested in the strategy play.
- Joel Owens
- Podcast Guest on Show #47
Originally posted by @Joel Owens:
So what is the end game for the rehab house market??
I don't play in that space but I have talked with plenty of bigger players. Many were holding a bunch of inventory in 2006,2007 and got spanked pretty hard. They were overexposed on the building and development side for their portfolios.
Some went under and lost it all. Others treaded water and are just recovering. This up cycle will eventually end as well.
I have seen some go from 5 million to 1 million in down turn and now back up to 2.5 or so recovering.
There are a few ways to avoid destruction when downturns come:
1. Make enough during the booms to cover your losses when you get stuck;
2. Don't ride the wave down -- sell (at a loss, if necessary) when you see the reversal and then wait until prices bottom to start buying again;
3. Take advantage of the bottoms when they come;
4. Don't overleverage;
5. Equity partners are better than debt, as you can spread the losses.
Personally, if every housed I owned right now went to $0 today, I'd still have made far more between 2008 and now than I would lose today. Enough, in fact, that the past 7 years would still be considered very profitable. So, while I would hate for that to happen, even if it did, I would still consider flipping for the past 7 years to be a great business model and would keep doing it.
Those who lost a ton in 2006-2008 had probably just started investing in 2004-2005 when the run up was happening. They didn't take advantage of the downturns in 2000-2001. Or, if they did, they blew the profits they made between 2001-2005 instead of adding them to their war-chest.
Nice work on this one Todd - this thread is a great read. That Bristol area has a lot of potential
I see too many investors who will list a house too high just to see what will happen (or because they don't know the value of their house). For example, they might list at $200K, when the comps indicate that it's worth $190K.
Then it doesn't sell. They wait a while to do anything, and in the meantime the buying season is coming to an end or the market is softening. The comps now indicate that the house is worth $180K, but they don't want to take less than what it was worth when it was listed, so they drop to $190K.
Winter comes along, the house hasn't sold yet, it's now worth $170K given the drop in buyer demand during the off-season. The seller refuses to lower the price to $170K because it was worth $180K just a couple months prior. So, they lower the price to $180K.
Finally, they get desperate to sell, it's middle of winter, and the house is only worth $165K. They drop it to $160K to get a quick sale.
Had they been realistic to begin with, or had they reacted fast enough, they could have gotten closer to $190K, but they kept refusing to accept the value decline and didn't want to take a big hit. They chased the market down, and ultimately got desperate and sold at the bottom.
I've seen it in real estate, I've seen it in the stock market, and I've seen it in business.
Here's an example in the other direction...
I used to work for eBay, and one of their biggest purchases was buying PayPal about 15 years ago. Originally, PayPal was willing to sell for about $1B, but eBay didn't want to spend that much. That refused. PayPal continued to grow, the market improved, and eBay finally came back and said okay to the $1B. PayPal said no, and increased the price to about $1.2. eBay refused. The market improved some more, eBay finally agreed to $1.2B and PayPal increased their ask again. This happened over many months, and ultimately, eBay ended up paying about $1.5B to buy PayPal.
They ended up spending 50% more because they didn't want to pay more than yesterday's prices today.
Humans are notoriously bad at getting their heads around "sunk costs" and dealing with them in a logical and financially optimal manner.
Beautiful!! Good luck!
Amazing job @Todd Whiddon its a beautiful house and should sell quickly. Love all the finishes and personal touches you are adding to your houses. I feel that it is those details that count and make buyers fall in love and want to buy.
Wish I was in Atlanta to see how you all are doing this, because this is something I would love to do!!
Great job again!
Totally off subject but what camera do you use to take your pictures, the clarity is great, I want to buy one so I can have nice pictures of our investmens?
@J Scott and @Todd Whiddon What color did you use for the ceilings and the bathroom trim?
