Tuesday, January 31, 2012

Real Estate Series: Rehabbing a Property

So, you just bought a fixer-upper (at least hypothetically).  You've heard that rehabbing properties is one of the quickest ways to make money in real estate.  You’re right; however, if this is your first time, you are probably not a hundred percent aware of how much work you just put ahead of yourself.  Even though you can make a lot of money this way, it is not a get-rich-quick scheme.  This can be a fantastic learning experience.  Don’t get discouraged if you are fixing it up by yourself and it takes longer than you originally anticipated.  It most likely will.  

Depending on what you bought the property for, you may want to hire a rehab crew to do the work for you quickly.  This article will help you weigh the pros and cons of you doing the rehab yourself verses hiring a rehab crew.

Do It Yourself

Good for you!  You are going to spend the next few weeks to months fixing up a house in your spare time.  If this is your first time, there are some things that you need to know; like how to caulk shower tile, or, for some of you, what is caulk.

There are so many things you may want to do to your house.  This information is ‘more what you'd call "guidelines" than actual rules.’  It will not cover all of your options thoroughly but it will give you some ideas and hints.  Do what you feel comfortable with.  And do what is in your skill level.

Always do rehab work on the interior before you do the exterior, unless you have to redo the roof.  You will want to fix that first to prevent leaks on the inside.

Some older houses have asbestos in the ceiling or walls.  For example, some "popcorn" ceilings are made with asbestos.  Asbestos is a mineral that was commonly used in insulation materials.  If asbestos fibers are inhaled, the risk of lung cancer and mesothelioma is highly increased.

Asbestos is not harmful if it remains undisturbed, however, it is when asbestos is removed and fibers become airborne that asbestos becomes harmful.  The EPA (Environmental Protection Agency) recommends that when dealing with asbestos, you hire a professional to do the work for you.

If your property does have "popcorn" ceiling, you can either leave it that way or change it.  Have it checked for asbestos.  If it does contain asbestos, leave it or have a professional remove it.  If it is asbestos free, the "popcorn" can be removed, and must be removed before texturing and painting the ceiling.

This is very messy work and you need to cover all floor coverings with drop cloths to catch the water when you spray and to catch the material when you scrape it from the ceiling.

It is necessary to remove all wallpaper before you texture and paint in order to prevent the paper from absorbing moisture and the compound and paint from bubbling.  Your rehab will look better if you remove all wallpaper first.

If you are painting your walls different colors, put painters tape where the colors will meet to keep the paint line straight.  Don’t use regular masking tape.  It is very adhesive and hard to remove.  You can use a paint sprayer or roller brush for most of the wall and a normal bristle paint brush for the corners.

Tile looks great and is an upgrade that pays out when you sell.  Make sure you have a flat surface.  To do a tile job correctly on an existing sub floor it will be necessary to put down cement tile board or staple wire mesh over the area and float quickcrete over the mesh to create the flat and stable surface you need for the tile. For best results, you should remove the original flooring (i.e. linoleum, wood, etc.) and then put the tile board or mesh down. When using tile board you will have to use screws and mortar for it to adhere properly to the sub floor.  This gives the tile a stronger surface and prevents cracks in the tile.

Read the instructions on how to install tile. And don't forget to seal the grout.  Sealing the grout prevents stains in the grout.

For shower tile, you may not need a cement tile-backer, but you will do the rest the way you lay floor tile.  Start at the bottom and work your way to the top in sections to prevent the tile from sliding down.  Once everything is dry, you will caulk between the tub and tile to prevent moisture from getting where it would grow mold.  Buy caulk that is specific for the bathroom/shower.  It helps prevent mold.  Recommended caulks are GE Silicone II if it is for the tub or shower, or if it doesn’t need to be painted, and DAP DYNAFLEX 230 if it has to be painted.

Before you caulk the tub, fill the tub with water.  This pulls the tub away from the tile ever-so-slightly and gives you a larger space.  Caulk once the tub is full.  If you don’t do this, your caulk could pull away from the tub or tile when you take a bath, allowing moisture and mold into the crack.

Light Fixtures:
New light fixtures are relatively inexpensive for the aesthetic benefits they provide.  Buy items that are inexpensive but look nice.  Before you install or uninstall light fixtures, turn off the light and circuit breaker so you don’t electrocute yourself.  All fixtures are different in some way, so be sure to read the instructions before you start.  This could save you hours of frustration and starting over.

Unless it is brand new, replace the carpet.  Tan and beige colored carpet makes the room look more spacious.  They are neutral colors and easier to resell.

Check your state and city laws to see which permits are needed in your area.

Don’t get caught up buying the most expensive items.  Buy items that look nice but don’t cost a lot.  If the new owner wants to replace them with something specific, he may.  If you rehab with expensive items, the value of the house will be about the same as if you rehabbed with inexpensive, nice looking items.  Save yourself money.

Again, only do what is within your skill level.  Don't become the electrician if you have no idea what you are doing.  That is dangerous (if not illegal -- I don't know).  And that leads me to hiring a rehab crew.

Rehab Crew

If you’re not up to doing it all yourself, or don’t have the time, hire a rehab crew.  With a rehab crew, you will be able to get the rehab done in a timely manner.  Your rehab crew should be experienced, so they know how to do the work the right way.

Your rehab crew is the group of specialized people you will hire to fix up your property.  It is very important to get a rehab crew that is licensed (plumber, electrician, etc.).  This way you make sure you are dealing with a crew that is legal to work in your country and that the crew is obligated to do the work at the standards set by correct authorities.

The best way to find a qualified rehab crew is through your friends, family, and fellow investors.  Be sure you do thorough research on the rehab crew that you choose.  After all, you will be paying them quite a bit to do the work.  They better do it correctly.

You will benefit by asking them some specific questions, such as:

  • How long have you been in business? (You want someone that has had experience with the work you need done).
  • Do you work in the city that I do business?
  • What kind of rehab do you do? – They must do the right rehab for your area and property (if the house is in a low income neighborhood it doesn't need expensive countertops, etc).
  • How many people are on the rehab crew? – This is for time efficiency.  The more people they have, the faster.  
  • Who is the supervisor?  Find out who to talk to about the progress and concerns of the project.  
  • What type of insurance do you have?  Usually they have at least general liability insurance to protect their property from damage.  Depending on their area of specialty (i.e. architect, engineer, etc.), they may have professional liability insurance, as a physician would have malpractice insurance.  
  • Do you warranty your work?  The contractors warranty is for the materials and labor provided.  It is standard to warranty the project for a year.  
  • Are you bonded? – Get a copy of the certificate.
  • Do you have your own vehicle and tools? – Only use people that have the necessary things in order to get the job done.
  • How are you billed?  You have to decide and write in the contract how you want to be billed before the actual work begins.  Also, if you want to know, have your rehab crew notify you if they go over budget.  Get an itemized bill for your documents.

Ask for references – If they have done a good job in the past they will be happy to give them to you.  If not, they are not good enough for you

You will also benefit by getting a copy of their driver's license.  You don’t want to be the victim of a scam.  If you have their driver's license you will have information for any legal recourse, in the event of a theft or anything they might do that could hurt your business.

Before you give your rehab crew a key to your property, you should make sure you have them sign a contractor’s agreement.  The contractor’s agreement should include:

  • A list of everything you want done to the property (including the little things such as light switch covers)
  • Payment phases – commit to paying your rehab crew in 2 or 3 phases. Pay at the end of the phase, but don’t pay until 100% of the phase is complete
  • Completion date – set a reasonable date by which the rehab crew should have everything finished.  Give them a week cushion if you’d like.  

Hint: some people put in an incentive such as: “if the job is not completed by DATE, a $50 fee will be deducted per day.  If the job is completed early, a $50 bonus will be paid for each day.”  This ensures that it will be completed on time, if not early.

Carefully watch for red flags or warning signs such as:

  • Refusal of the contractor to sign a contract
  • Requirement of more than 20% for the down payment
  • Inability to contact the references provided
  • Cannot verify licenses
  • Cannot verify insurance
  • Pressure from them for you to sign a contract
  • Refusal to give you a quote
  • This is their first job

Once you have found the rehab crew you want, don’t think that your part is finished.  Keep an eye on them.  Make sure they are doing a good job.  You can do this without looking like you are suspicious.  Bring them doughnuts once a week as a “thank you” for doing their best.  This will help you build a good relationship with them while checking on their progress.  If you treat them well, they will usually treat you well (and by them treating you well, you will have fewer problems and make more money in the end).

You now know some of the options that you have for rehabbing your fixer-upper.  As with all things in real estate, don’t make hasty decisions.  Contemplate the method which is best for you - whether it is to do it yourself or hire a rehab crew - and make an educated decision.  Use this article as a guide.  Remember, this is your project and you can do it however you want.  The guidelines laid out in this article will help direct you along your path to a successfully ‘fixed-up’ property.

Personal Experience

The first house I bought was a fixer-upper.  I had a friend who knew what he was doing help me out and it took us for-flipping-ever to finish.  What we did looked great and the value increased by 25% when it was done.  Unfortunately the market crashed before I sold (because I was greedy and didn't want to settle for less than I thought was worth -- another lesson in itself) so it became a hassle rental when we moved out of state.  And we finally sold it.  Yay!

Monday, January 30, 2012

Hoarder House

You know what makes my heart happy?  A good before & after.  I recently found an investor/Realtor friend in Indiana who has been busy buying wholesale real estate and renovating/staging.  Seriously, these pictures that I'm going to show you are so amazing.  You won't be able to tell it is the same house.  


I'll be honest, with all the work that was done, I am not sure which before picture goes with which after picture, but you get the point.  Isn't it amazing what a great renovation and some home staging can do for a house?  So, the part everyone is interested in... the numbers.  The purchase price was $35K, costs that include holding, renovation, paying the real estate agent, staging and open house were around $95K. Renovation took about 8 weeks. The end sales price was $190K.  Just so you don't have to do the math, the profit on this house was (excuse me while I get out my calculator) $60K, which was split 50/50 with her funding investor.  And all that equals $30,000 for 8 weeks worth of work.  Good.  For.  Her.  The only thing I was taught to do differently was to offer the funding investor less (like 20-30%) because he doesn't have to do the work... although he does take the risk and if she has a great relationship with him, well, that would just mean more deals for everyone.  

So, my goal for February is to make at least 10 wholesale offers on houses that we would live in (in case we got "stuck" with it -- remember 2007?)

Also, I have been asked about becoming a home stager.  I took some courses from the Association of Property Scene Designers (APSD) and I am very happy with what I was taught.  It's not only about how to make a house pretty -- anyone can do that -- it's about making a house sell.  They focus on that and on how to make your business successful.  Very awesome!  If you are interested in becoming certified with APSD you can either get more info with a free CD here or you can just go for it and sign up for courses here with a limited offer for lots of free bonuses.  Or if you really want a great deal, let me know and I can see what I can do about getting you a course for 40% off.

*Please don't think that I am heartless when it comes to the problems and challenges that the previous owners of the house obviously had.  I am only writing from an investor's point of view, emotions not involved.   

Friday, January 27, 2012

Silver Nightstand

A few days ago I pinned this DIY silver leaf dresser (if you are going to pin it either go to my Pinterest pin or her website -- under the pic).  
Pinned Image

I'm in love with its bling.   Seriously.  But silver leafing a dresser is time consuming and I'm already in the middle of like, 5 projects and trying to work with a budget (new year's resolution) so I didn't want to spend more than $5 on it.  Well, silver leaf was out so I stopped by Lowe's and bought some metallic silver spray paint so I could make Morgan's mid-century nightstand a little lot different.

I sanded through four layers of paint.  This nightstand belonged to my grandma, who then gave it to me at least 25 years ago.  It's had a lot of wear.

I decided I wanted to do something to the drawers so I decoupaged lace along the edges.

Then I spray painted everything and put the hardware back on.

It's not silver leaf (maybe that will come another time), but it is the next best thing.


Linking up at the great Linky parties found at the bottom of the blog.  They are where I find most of my inspiration!  Check them out!


Thursday, January 26, 2012

Hey Girl. Wine Cork Art

Submitted by @ginnymartyn

I've been in love with wine cork art for a while now.  I have wanted to do something.  Anything.  But the problem (not necessarily a "problem") is that I don't drink wine (or any other source of alcohol or beverage that uses corks) so I haven't been collecting corks for any sort of art project.  I knew I needed to find a solution.  And I did.

Last Friday we went out with some friends to a nice restaurant in downtown Boise.  I knew over all we would spend a good amount of money on dinner so I had no problem asking if they could keep the wine corks that weekend and give them to me.  Well, when I asked, the waiter said that the owner was collecting them for some sort of project and literally had thousands.  I told him I only needed about a hundred so he worked some magic and brought me a bag full of them.

When I saw this wine cork ampersand at Living Savvy I knew I had to do it.  It is such a great piece for staging!

Living Savvy

Well, here's where I am on mine.  I ran out of corks.  So remember that 100-ish corks actually doesn't go a long way.  When you do this, ask for at least 200.  Now I have to go find another source of corks to finish my ampersand.  I guess another nice dinner is in store.

Wednesday, January 25, 2012

Guest Post: I Know the Plans I Have for You

Hello!  I am so excited to introduce you to a blogger that I recently found.  She has some seriously amazing stuff and I'm so lucky to have "met" her.  Ladies and gentlemen (my husband and dad?), Jill of I Know the Plans I Have for You.

Hey guys! My name is Jill and the name of my blog is I Know the Plans I Have for You. I was so excited when Kelli asked me to guest post at The Turquoise Piano!

Just a little about myself...
I am a wife and a stay at home mom of 3. I have 2 girls, 1 and 5, and an 8 year old son. I have stayed home with my kids for 7 years and was super lucky to find a passion in refinishing furniture, painting, sewing, crafting, and blogging. All of these things have given me something of my own, in a sense, and keep my busy and proud.

After painting my cabinets, I started thinking about painting my counter tops. Of course the buzz is all about the faux granite kits. I wasn't apposed to going that route, but what I really wanted to do is paint them with Annie Sloan Chalk Paint. I searched the internet to see if anyone had tried this, but I wasn't able to find anything. I wanted to know what the best way to apply it was, what the best top coat was, and of course....how it held up!!

I'm sure I'm not the first crazy to do this, but since I was unable to find anything on it, I thought I would tell you how I did mine....and what I learned along the way. So this tutorial is sorta gonna be in 2 parts. The way I did it, and the way I would have done it had I known....

This is what my counters looked like before
A nice powder blue
It's not that I minded them so much, but I knew that they could be improved. 
Here are the supplies I used:

blue painters tape
a paint brush
a foam roller
a sponge applicator
ASCP in Graphite
Minwax Wipe-On Poly
a sanding block
steel wool grade #0000
nail clippers

I first decided I was going to see what it looked like on the small section of the counter top. So after I taped, using a paint brush, I brushed on the 1st coat

The 1st coat was much more gray than
I had expected, but I loved it
Know that the paint will seem very streaky as it
dries, but will be smooth when dry
Now I was in it! I went for the rest of the counter! I didn't have a plan if I hated it, so good thing I didn't!! 

The sippy cup just adds to its beauty ;-)

I was afraid to turn the water on to do the dishes before it was all sealed
I continued to paint the counters using a paint brush. It looked great as it was going on and as it dried it felt smooth. So I put on a second coat of paint. Still felt smooth! Then, without sanding, I applied the top coat. I used a sock to wipe it on and waited about 3 hours for it to dry. Next, I gently went over it with the steel wool before applying the 2nd coat.
Here is also where the nail clippers came in. As I was sanding, my nails kept scratching the paint....so keep them SHORT! 

Now this is when I wished I had advice before I started!

I could see all the brush stokes! When I paint furniture I always sand before applying the top coat, so I wasn't used to this!!
The steel wool wasn't smoothing it out and I began to panic! So I sent the hubby to the store to get a sanding block, a foam roller, and a sponge applicator.

Using the sanding block, I lightly sanded until there was a smooth finish.
The sanding block worked like a charm! All was smooth and I continued....
I ROLLED on another coat of paint, and touched up where my nails had hit. I sanded the paint when it dried with the steel wool before applying the top coat.
I used the sponge applicator instead of a sock to apply the poly. After 4 hours, I sanded with the steel wool and applied another coat. I applied 4 coats total. I wanted to make sure that there was a good amount of poly to protect the top from any wear and tear or nails hitting it!
Much better!!

I woke up this morning and my kitchen looked like this:

Ok...I cleaned first, haha

 So to recap what I would do:
roll on the paint, not brush it on
sand the paint before applying whatever top coat you choose
cut your nails before starting lol
use 3 coats of paint
use at least 4 coats of poly....more if you'd like.

I'll let you know how its holding up, and if you have already done this to your counter like this, I would love to hear from you to know how yours is holding up!!

Thank you so much for letting me share this project and I would love to have ya'll stop by and browse through I Know the Plans I Have for You!!

Wow!  Way to be a trailblazer, Jill!  I hadn't thought of using chalk paint on counter tops but I LOVE yours.  Everyone head over to I Know the Plans I Have for You and show Jill some love.  :)


Related Posts Plugin for WordPress, Blogger...