FGHart

I need to remember that what we are doing now is “rehab”. The flip refers more to the real estate transactions. We’re in the ugly, gory part of the process, where there is a lot of sweating and occasional swearing.

Mr. H spent yesterday and today working on the cabinet makeover, adding a microwave to the appliance set. He also painted (using a power sprayer) the cabinets, but I neglected to take a photo at the end of the day.

I spent yesterday taping off the bedrooms and today, painting. Two bedrooms are now “Summer Sandcastle,” awaiting the application of an oil-based white to the doors and trim. Other than a few minutes of freak-out when we thought the flesh toned wall paint was a bust, the day was uneventful.

I’m glad I forgot about my discomfort with heights, as I climbed this 8′ ladder and streeetttccchhhed to cut in the paint at the ceiling.

Yesterday Mr. H and I put in about 13 hours. Today we put in about 5. While he puttered around with stripping linoleum, prepping new doors and modifying the kitchen cabinets for the new microwave (all are still works-in-progress), I sweat and scrubbed and cleaned, focusing on the bathtub & tile and the carpets. During the long day, I cleaned tile (about the time I finished working in the windowless bathroom, Mr. H decided to turn on the AC) and the carpets in the three bedrooms. Below are some before & after photos:

It’s not obvious, but I also stripped out the caulk from the bottom of the tile. Mr. H will redo the caulk, as well as the grout on the wall behind the tub. Hopefully the mismatched section will be less obvious. We’ll invest in a shower rod/curtain to help distract. Also, and more importantly, new fixtures.

The three bedrooms all had serious stains that required concentrated effort and a variety of chemicals. In the hours spent removing spots and stains, and driving the steam cleaner, I was able to ponder the lifestyle of the previous owner/tenant. I’d say single (carpet worn on only one side of the bed) with at least one dog. And maybe a cat. I could knit a new pet from the amount of hair collected. In vacuuming the three small bedrooms I had to empty the canister four times. And it seems the dog had stomach issues. Regardless of my wayward imaginings, vacuum and steam cleaner saved the carpet.

The inserted image is a stain at the front entry. The entire living room was covered in spots and stains of indeterminate origin (as seen in the larger image). Other than the occasional spot of blue paint, the rest, I assume, is from food or Fido. There was not a 3 foot square section that was free of stains.

And afterward, another carpet saved! The labor is well worth the effort when taking the cost of carpet into account. When all is said and done (i.e. painting and carpentry completed) we will go over all of the carpet again with our industrial grade steam cleaner.

Oh, and…why only a half day today? Because Mr. H was driving a big rig for the Rouse HS Band:

Our first full day of labor began with, of course, a surprise.

After unloading all of our supplies at the flip-house, Mr. H and I got busy. I took the initiative to work on removing paint from the door hinges and latch plates. I chose a nice shady spot at the end of the porch. I’d barely settled into my efforts when a city employee arrived to turn on the water.

Soon after that, Mr. H became very excited and did some sprints from the front to the back, around and back again. I got up to see what was going on and he alerted me to … a water leak. The mound of dirt you see at the end of the porch is the result of the hole Mr. H dug to get at the leak. Fortunately, my porch location helped us quickly identify the source of the leak.

Unfortunately, Mr. H didn’t bring his plumbing equipment so we were without water for the duration of the day.

Now, back to paint removal. Here’s a before and after shot of a door hinge that’s been stripped and spray painted.

Our agent reminds us repeatedly not to go above and beyond what is necessary. He mentioned to us this evening that he just reinstalled rusty hinges (i.e. stripped the paint, only) in an older home that he is flipping. This is a challenge for us, so we’ll just have to keep reminding each other as we go.

Most of my day was spent removing outlets, outlet covers and switch covers, and cleaning those items. As a side note, I’m not a fan of the paint-your-outlets approach to interior decorating. The living room outlets had 4 coats of paint. One more layer, adequate to hide the bright blue top coat, would render the outlets useless. There’s a limit to how much paint can coat the interior or the sockets before they’re too clogged for a plug.

I also started general cleaning. I don’t have any noteworthy before/after shots to share. I did get a shot of the kitchen at the end of the day.

Mr. H began scraping up linoleum today, after removing the old countertop and the cabinet over the stove.

Tomorrow we should have water and electricity, so I expect to spend at least 8 hours cleaning the bathroom, the carpet, and whatever else I can tackle before I’m tackled by exhaustion.

Almost everything we know about flipping houses, we learned from TV. Fortunately we have a realtor who graciously gives us advice and encouragement. But that doesn’t mean there aren’t still surprises.

On Monday we closed on our first “flip house”. The first closing, that is. We’re at the beginning phase of rehab. There will be another closing at the end of this process.

At the closing, we discovered the contract included line items for Title Insurance and Title Handling by Lender. Since we declined Title Insurance and we’re paying cash via a home equity loan, we were not prepared to pay for either of these items. We’d already wired over the cash, but a paperwork change meant we’d be reimbursed over $600. Yes, I wanted the paperwork changed. It took two iterations. (Oh, and…it will be up to us to chase down the reimbursement.)

While waiting on the revised paperwork, we discussed the rehab items that needed to be tackled. Our realtor expressed surprise that we were purchasing a 3/1/1 and not a 3/2/1. I was surprised that he was surprised. I’m not a fan of surprises, in general. I have a feeling this is the first of many.

Since our realtor will represent us in selling this house, I’d like to think he was considering the future marketability, but who knows.

 Lesson 1: Be sure to ask the realtor “what about this house will make it hard to resell?”

He also mentioned the urgent need to acquire insurance. We were not prepared for the premium associated with insuring unoccupied houses.

After the closing we went through the house with the realtor, specifically reviewing the minimum effort and expense needed to get the house back on the market. Mr. H and I need to get aligned on expectations and our realtor is also our mentor. He has a lot of experience, which will hopefully help us avoid some trial-by-error education.

His key points: 1) Clean, clean, clean. 2) Paint and carpet, paint and carpet, paint and carpet. These areas will give the biggest bang for the buck. Everything needs to be considered as an ROI algebraic equation. If I input X in labor and Y in expenses, will I get Z in profit? What, exactly, will be the Return On Investment? We’ll have to ask ourselves this question a million times before the project is a wrap.

Although Mr. H initially planned to repair the garage door, we’re now pricing a replacement.

Kitchen: The realtor suggested we should not need to replace these cabinets, but a little bit of sanding and a fresh coat of paint will suffice. This is great news and should save us about $1,000 (kitchen and bath).

We are in the market for a low-end (or used) stove and a microwave/hood. Mr. H will be replacing the flooring with tile. Elbow grease and cleaning supplies should cover the rest of the kitchen & dining area.

The house will be painted end-to-end, inside and out. Our realtor indicated we could leave the cheesy mantel. More good news! Not shown – the windows, which will be dressed with 2″ mini-blinds.

It may not be obvious, but the previous painters were sloppy overly generous in their application of paint. Our realtor recommended soaking the outlet and switch plates in rubbing alcohol to get the paint off. I’ve already started this process on the door hinges, and it seems to be working. We’ll need to purchase more rubbing alcohol.

Supplies:

• Rubbing alcohol
• rubber gloves
• stiff-bristled brush
• elbow grease

We should have electricity turned on sometime Thursday so Friday morning we will be steam cleaning. I’m a girl who loves using chemicals so I consider these spots and stains a fine challenge. If we can’t get the spots out, we’ll be stuck replacing the carpet. I’m optimistic about the bedrooms but leery about the main room.

Another tip from the realtor: Replace the doors (front door and the flat interior doors with new, paneled doors) and replace the knobs so they match. We pulled all of the hinges, stripped the hinges of the latex paint and gone so far as to spray paint them with a metallic brass so they look as good as new.

And finally, the bathroom: I’m hoping that elbow grease and chemicals will go a long way towards sprucing this up. We’ll also invest in a new fixtures for the sink and tub, as well as a matching set of hardware (for towels & toilet paper). Mr. H can also work magic with caulk.

Everywhere there is linoleum, there will be tile. If we have to replace the carpet in the living room, the linoleum in the hallway will (potentially) be replaced with carpet. As of today, we’ve reduced our budget and our schedule by half. We hope to spend $5k and 1 month in this investment before we put the house on the market.

• Purchase price: $56,000
• Budget for rehab: $5,000
• Target sales tag: $90,000
• Closing expenses: $7,200 (8%)
• Holding costs (pending sale): ~$1,800
• Anticipated profit: $20,000