All Forum Posts by: Mathew Morford

Currently, I am renovating my home to get a HELOC or sell. I have a good amount of equity, so I am just getting ideas of where I want to be at. I have been doing plenty of research in short-term and mid-term rentals, but I am a little nervous with what I am seeing with a friend's situation.

My friend just finished a flip in Franklin, IN. From what I have seen from market research, it is a desirable area. The issue is, that the house he bought to flip, I guess is in a "not so desirable" neighborhood in that market. The listing price he has it for is, in my opinion, fair. The home was built in the 90s and wasn't too bad of shape, but he dumped a lot into it to get it where it is today. From what he has told me, he hasn't gotten any offers on it due to the neighborhood. This neighborhood does have a HOA, but I don't think that is the issue. Franklin has great schools, low crime, its a small - medium size town, but considered rural. Is that common? Is lowering the asking price the only way to solve this issue?

With this situation, it makes me wonder what tools he could have used to figure out if that was a good flip or not. I believe using Redfin and Zillow would have helped, but how would you know if a neighborhood is in demand or not?

Also, this situation makes me wonder if just getting a HELOC is the only way to go. I was thinking of selling, then buying a property to build on, while investing else where, but Im just wanting to get opinions from what other people think of the situation and how it compares to the whole market entirely.

I know this sounds like a stupid and confusing post, but Im trying to make sense of it all and I am on the fence about selling my house or a HELOC. I just want to make good choices and this is the first place I thought of to ask for help.

Thanks to all who respond in advance.

0 Votes

Indianapolis, Indiana

Quote from @Bruce Woodruff:

@Caroline Gerardo is right.

Your big bang items are 1) Kitchen and 2) Master Bath. And even those are questionable if you get your money back. These are very personal decisions.

I can't tell you how many times I had a seller pay me to go in and redo kitchens and baths, and then get called back by the new buyer to redo the brand new custom work....just because of color.

I would just put the house on the market and price it a little high, maybe $20k...? Then throw in a $20k allowance for remodel.

I didn't think about putting an allowance cushion on that, that's a good idea. As of right now, as stated above, we are fixing some issues and then we are going to be making some decisions. Thanks for your input.

0 Votes

Indianapolis, Indiana

Quote from @Sara Plaisted:

Hi Matthew,

I second the idea of skimming through the beautiful rabbit hole of Pinterest to get ideas and brainstorm. And focus more on your Kitchen, Bathroom, Flooring and Paint (inside and out) for better bang for your buck on your ROI.

As an Interior Designer, I've been working with realtors remotely to help update properties prior to listing. For most projects, we tend to go with an elevated warm neutral color palette that feels contemporary, fresh and approachable for most buyers. Of course, some areas have a little more room for play.

Warm white walls, like Benjamin Moore White Dove feels modern and clean with a slight putty undertone. Or Swiss Coffee (any brand), which is also warm. Eggshell finish.

Trims and Doors in a clean white, like Simply White, in Satin Finish.
Ceilings in Simply White, Eggshell Finish.

If you'd like to paint your Kitchen Cabinets, since they're in pretty good shape, a nice greige (grey beige) or dark taupe is nice. You could think about painting the uppers in a warm white or light beige, just a skootch darker than the walls. Or paint the perimeter cabinets in a warm white and accent the island in another darker color for a contrast that feels like it's a piece of furniture.

Black Door Lever Hardware and Plumbing Hardware, Cabinet Hardware, Accents and Light Fixtures are a nice pop that feels modern and cohesive. Black is also more affordable than the gold, but if you're budgeted for Gold, it does give a great warmth to a Kitchen and Bath, and can be paired with the black you have going on.

I agree about leaving one bath for resale, unless the tub is in another bathroom? When you replace the wall tile and shower fixtures - Larger scale tiles (24x48) should be more affordable on labor, less grout and easy to clean. Smaller scale tiles (subway, 4x4 or decorative 12x12) add texture, dimension and excitement.

Lastly, a PSA about lighting. Please make sure all the bulb temperatures throughout the house are the same so that it feels inviting and cohesive from room to room. It's a subtle annoyance that may be subconscious to most people. This goes for Recessed Cans, Sconces, Pendants, Chandeliers, Lamps, Outdoor Lights, etc. If you can install Dimmer Switches, even better. Select warm white bulbs or LED cans (preferably 2700k to max max max 3,000k. Anything higher is a harsh, uncomfortable blue light that feels like high noon to our brain).

If you need anything, feel free to reach out. I'm happy to help!

WOW!!! Just WOW!!!.

Thank you for the response. So descriptive and detailed. That gives me a lot to think about. We are still renovating and fixing some issues along the way, but this definitely gives me a lot to think about and to work with. Thank you for this response. I will definitely reach out with any more questions.

1 Vote

Indianapolis, Indiana

Quote from @Caroline Gerardo:

Grey is out of style. Paint color depends on style of house.

Painting adds no value, it's maintenance.

If cabinets are in excellent shape, leave them alone.

Accent wall adds no value.

Would need photo and layout of existing bath and proposed bath and total rehab cost to tell you what value it adds, my guess is it adds $5000 in value or less.

Thank you for your response.

Replying to the "Grey is out of style." - Is there a color that is currently in style or should I just go with white?

Well I can get the layout of the bathroom maybe here sometime today. Obviously I can picture it, but I don't know the exact measurements.

0 Votes

Indianapolis, Indiana

We am currently rehabbing our home to possibly sell or get a HELOC on. That being said I have a few questions that I hope some people can answer for us. (Im sure these have been asked on this forum, but I couldn't find any recent posts)

1. What is the best colors to use when painting the interior of your home to sell? I was currently thinking about a light gray walls with white trim and ceilings. I have also been told to just do white on white, but Im not sure if that is what everyone is looking for now a days.

2. We are on the fence of either replacing my kitchen cabinets, or just painting them. My kitchen cabinets aren't super old, so painting them would save money (I believe), but Im wondering if it even matters. My current cabinets are a medium/dark wood stain. they look great for what they are, but I have seen a lot of people paint them and they look great, but I also didn't know if I should just leave them the way they are.

3. My bathroom is definitely getting updated. We have a modern bathroom vanity setup, but the tub/shower isn't. The old owner was trying to make the bathroom modern 13 years ago by adding a very small almost hidden closet that is unusable, but we want to remove it. We also want to remove the tub/shower and make it just a shower, but we only have 1 full bath in the house and we weren't sure if that is something that would lower interest in our property.

4. We were thinking of adding an accent wall on the wall our TV hangs on, but we weren't sure if that would even matter on selling the house?

Other than all of that, we are wanting to do all of this in hopes it can create some more equity and possibly help us with getting our future in Real Estate going. We are wanting to buy a property (or 2) to start doing short term or mid term rentals.

Thanks to everyone in advance on your responses.

2 Votes

Indianapolis, Indiana

Quote from @Jaron Walling:

@Mathew Morford I grew up in rural Indiana near Kokomo. It sounds like you're slowly flipping this property? Some of the upgrades you mentioned (specifically the smart tech stuff) only help for new home buyers (window shoppers). Your post reads like a highlight description for a new listing. Recessed lighting is must in 2024. Under stair storage is a bonus. The more "things" you add the more attention your listing will get but you need a cut-off. That's where your budget comes into play. Otherwise every flip would be full of custom detail every buyer would want. Finishing details is the most expensive part of remodeling property. The final 10% hurts the worst so limit this and profit more.

LTR and most STR don't have these things. It's another thing that breaks or needs maintained. Tenants won't take care of it. I'd go basic outside of LED lighting, new cabinets, 1-and-done projects, and repairs if you're aiming to BRRRR. Cheers.

Thanks Jaron for your response. I live north of Martinsville. You gave me a lot of info that I appreciate you sharing. That does ease my mind on spending. We plan on just doing basic touch ups and paint on our bedrooms, but we didn't know if cool features would add value. Thanks for the info.

0 Votes

Quote from @Kyle Spearin:

@Mathew Morford what type of investing strategy are you planning on employing? Storage space will always appeal to people, especially bigger families with kids. Automated technology seems like a nice to have for a rental, but maybe it would be more coveted in an AirBnb? Just trying to get more of an idea for how the property is going to be used.

Kyle, thanks for responding. As of now, I think our residence would be more appealing to a family looking to buy, but I am not sure. Our area isn't a good area for AirBnbs. I live in Indiana and there isn't much here besides corn and hills ha ha. My residence is in a rural area with nothing around it. Thats why I think that it would be best to just get a HELOC or just sell it out. I hope this answers your question. I am sorry, I am still new to real estate investing.

1 Vote

I have some ideas with my property and I am wondering if its worth doing to create more value or if it creates value at all.

I have a small property and I am thinking of selling or getting a HELOC so I am in the middle of remodeling the house to create more value. That being said, I was wondering if little things like; creating storage under a stairway, adding recessed lighting, automated technology fixtures/features (Alexa, Google, etc), little things like that. Does that create more value or more of a "window shopper" interest? Obviously, stuff like; paint, new flooring, new kitchen cabinets, etc.

Im mainly wondering about the under the stairway storage and the automated technology. I have some light switches that have built in Alexa and Im wondering if that creates more value or if its even worth my time doing?

Thanks in advance

Mat

2 Votes

I have the opportunity to sell my house and make some money to get into real estate.

My equity has increased substantially since I bought it in 2021. I purchased it for $125k and owe $113k. I’m estimating between $215k-$220k at a selling price, but that’s in perfect condition.

It needs about $10k-$25k worth of rehab on it. I'm wondering if the ARV would possibly increase with a modern update or if it's even worth doing the rehab?

I'm new to all of this and I just want to maximize my ROI.

0 Votes

Quote from @Adam Oldham:

@Mathew Morford I would probably lean towards accessing a HELOC if you can get favorable terms. What I like about the HELOC regardless of whether you use it or not is that it doesn't cost you anything to have(besides a nominal setup fee usually) but then you are able to use it at your discretion. Second, if you sell your current house and tap into that equity you still have to buy another house for your primary which seems like a lot of work, you're going to be buying both houses(primary & rental) at higher interest rate than you bought your primary in 2021. Third, you probably have a great interest rate that I would not want to give up unless a screaming deal came along.

If you can access 30-50k from your HELOC you should be able to put that as a down payment on another investment property, just don't forget to factor in this extra payment in your ROI calculations for the rental.

Thank you for your response. It does give me a lot to think about.

0 Votes

Indianapolis, Indiana

All Forum Posts by: Mathew Morford

Mathew Morford has started 10 posts and replied 18 times.

Post: Ideas on areas to invest in

Post: Rehab trends to use

Post: Rehab trends to use

Post: Rehab trends to use

Post: Rehab trends to use

Post: Creating more value

Post: Creating more value

Post: Creating more value

Post: Is it worth it

Post: To sell or to HELOC