77K return . . . but I wouldn't do it again!

[Douglas Larson]

Older home with great bones built in 1942 - needed full remodel.

Purchase price: 235k - short sale
Projected costs and time: 45k and 3-4 months.
Actual renovation & carry costs $86k and 8 months of work.
Commissions/concessions $22k
Sale Price $419,900
Net gain $77k

Most proud of... Kitchen and master bath.
Most stressed by... HVAC system overhaul $8,300 after 7 different bids from 7k to 20k.
Take-a-ways: 

- old houses offer many unforeseen challenges.
- cat pee is really nasty!

- it's really fun to see a diamond in the rough take shape!

Kitchen before...

Kitchen after...

Liv rm before . . .

Liv rm nearly complete...

Master bath after...

[AmarPal Kalsi]

Great work! I am interested to know what was the variance between actual and budgeted repairs?

[Maggie Tasseron]

Too bad this article has such a misleading title; a lot of people will just glance at it, assume they get it, and not bother reading on. Of course, those are probably people who don't have the vision required to be in this kind of business in the first place.

Nice job on the reno...it looks beautiful!

[Ramon Jenkins]

congrats

[Gary Sands]

Your perspective/experience is very interesting to someone like me who is looking for their first property. The extra time and effort you describe make me curious though: how much did your final expenses exceed your initial estimates for the renovation and carry costs? If you made $77k with all the extra time and work, how much had you planned on netting, at the outset?

[Deanna O.]

I don't know if cat pee is worse, but my manf. home had pee-saturated sub floor (so bad some parts later weakened & cracked.

First coat of Kilz did wonders, 2nd coat completely sealed it (don't remember if it was oil or water based -- both are fantastic). Me & a roller on a long pole. Like mopping....sort of. Pour a couple cups of paint out, roll it out. Repeat for 1,000ft++. Let dry, repeat. Started the minute after escrow filing closed, and by 5 pm virtually no pee smell. This place had had a WALL of odor when you walked in the door.

[Katie Rogers]

How on earth does a house develop a cat pee problem at all, never mind all the way to the sub floor?  I have had cats all my life.  They use the littler box or go outside.

[Douglas Larson]

@Nick G.

The kitchen cost me about 10K for tile, granite, cabinets, hardware, appliances, backsplash and new lighting. I designed the layout and installed the cabinets. I used subs for the rest.

As I mentioned above, the blown budget was because in almost every repair I estimated, there were "old house issues" that I don't deal with in my remodels of 1978 and newer homes. I have remodeled about 40 properties but none older than the 70's. 

@Jeff Tang

I probably should have "gutted" more to start with but most of the walls (even interior) were brick and concrete. Only 3 interior walls were 2x4 stud walls. Most of the electrical and plumbing was inside the brick and concrete. My advice to myself is just to stick with the newer homes I have always had success with. 

I still count this remodel flip as a success, but the additional headaches and time spent were just not worth it!

[Douglas Larson]

@Anna Watkins

The sliding door was a fun little project. I found the stainless slider hardware on Amazon for about $150. Home depot actually carries a similar product but only in dark bronze. 

The door I used was actually the original front door to the house. It had "character" but it was only single-pane glass and not very energy efficient. I sanded, and painted the wood  and frosted the glass. It now covers the hall opening that used to lead to 2 small bedrooms and the upstairs bath. Now, that whole area is the master suite.

[Anna Watkins]

@Douglas Larson   Love the sliding door even more now!   I have a similar old Mission Bungalow door that's very cool, but not good enough to warrant using as an exterior entry door. In my next house . . .

[Douglas Larson]

Originally posted by @Gary Sands:

Your perspective/experience is very interesting to someone like me who is looking for their first property. The extra time and effort you describe make me curious though: how much did your final expenses exceed your initial estimates for the renovation and carry costs? If you made $77k with all the extra time and work, how much had you planned on netting, at the outset?

I went in planning for 3-4 months of work and a sale price of $379K and a 70-80K net profit. In the end I made the same amount of money but it took twice as long and cost nearly twice as much! I would have been in for a much lower return if the market wasn't able to bear the extra money I spent. I was able to raise the asking price to $420K and I got a full-price offer. I put this example and the numbers on the success forum because it was a successful flip. I also want other investors to see the potential pitfalls of an old house, with extra issues that can devour your time and budget!