Rehabbing a property is very exciting. It’s an amazing feeling to be able to create something new and fresh. I was able to experience this last spring when I did my very first rehab. The rehab was more extensive than I envisioned my first to be but I welcomed the challenge.
My first property was a two-story with a full, unfinished basement. It was almost 40 years old but in great condition. Luckily, it only needed cosmetic work. However, there was a lot of cosmetic work to be done. When I bought the property, it had more wallpaper and vinyl tile than you could imagine but I could envision its potential. Luckily, I was buying this property through a program that allowed me to roll the rehab loan into the mortgage amount. This made it easier, and more comfortable, to make all of the changes that I wanted without having to worry about the paperwork or hassle of getting two different loans. The program was so awesome that it even helped me find a contractor.
After meeting with the contractor, he encouraged me to create a spreadsheet of all of the products and materials I wanted in the property. This meant that I had to do a lot of homework and shopping around. I think I have been to every home improvement store in the south suburbs. I worked diligently for weeks to pick out everything that I wanted. This means that I had to pick everything from the bathroom faucets to the doorknobs to the color of the trim in the bedroom. Every detail had to be chosen. I believe in organization so I created a spreadsheet to outline the items that were needed and took this with me to the stores. I also took my digital camera with me so that I could have a visual of what was chosen. After so long and so many items, they begin to become big blurs in your mind. It’s also helpful, for instance, when you find a bathroom faucet that you like at one store but the vanity that you like is somewhere else. This allows you to put the pictures together to see if they complement each other. You may find that changes need to be made to make sure that they actually match.
Once I was satisfied with all of my choices, I emailed them to my contractor. There was a spreadsheet that outlined all of the fixtures and another for the paint colors and flooring. I wanted to make sure that all of my wishes were clear since I wouldn’t be able to be at the property all day, everyday. I also felt that it would make things easier for the workers to do their jobs because there would be no confusion about what was wanted where and how.
I closed on the property on a Friday and the contractors were ready to begin that next week. It was exciting to come to the property and see the demolition being done. Since there was mainly cosmetic work to be done, this entailed pulling up the floors, removing wallpaper, removing bathroom fixtures, and the like. The only somewhat major change that was done to the house was that I decided to open the walls in the kitchen to have access to the living and dining rooms. I didn’t want the entire walls removed, just an L-shaped bar to make for more seating and entertaining. However, there was a problem. The contractors found that the heating and air ducts were in one of the walls so the open bar wasn’t an option unless we wanted them to completely redirect the ducts. This option would add to the completion time and the budget so I decided against that. This was my first taste of having to be flexible with what you originally consider. After discussing all of the options with the contractor, we came to the conclusion that the best option would be to create two big windows into those rooms. Although it wouldn’t be the continuous openness that was once desired, it still opened the area and allowed access to both rooms. We were also able to still incorporate the bar for more seating. Problem solved.
As with any property, the major headaches to revamp were the kitchen and bathrooms. The other rooms in the house were typically just the flooring, painting, and lighting. The kitchen and bathrooms, on the other hand, needed everything completely changed. Remodeling the kitchen was my second lesson in being adaptive with your original plans. For the countertop, I had chosen a type of quartz stone slab. However, I didn’t realize that it would be a special order and take at least two weeks to deliver when I originally chose it. Since the countertops couldn’t be ordered until all of the new cabinets were in and the bar was built, this wasn’t discovered until less than a week before I was supposed to move in and was unacceptable. So on to the Plan B that I didn’t have. What I needed to do was find a tile that could be laid immediately. I actually found that Plan B (marble tiles) looked and worked better in the kitchen. However, they didn’t look better on my budget. The tiles themselves were very inexpensive. I just didn’t know that laying the tiles on the countertop would be as labor intensive as laying the floor tiles. This was a really big shock that I had to absorb.
As if I didn’t learn my lesson with the kitchen countertop, I found out later that the bathroom vanity for the master bathroom was also a special order and that it would take four weeks for it to arrive. This meant that I had to go back to the stores to find another vanity that would be suitable. Changing the vanity also meant changing the paint color so that they would complement each other. It just seemed as if my trips to the home improvement stores would never end.
At the beginning of the project, I was naïve enough to think that since I had done all of my homework prior to the work being started that everything would go off without a hitch. When I sent the spreadsheets to the contractor, I really felt a sense of relief that my part of the project was done. Boy, was I ever wrong.
This property was very personal to me since it was not just a rehab and flip. All of this was done for the first house that my husband and I bought for our family. I initially looked at it as making sure that everything was just right for us but then I realized that it was a learning experience for when we do it for profit. We just submitted offers on four investment properties and hope to have at least one offer accepted. None of the properties that we bid on are as large as our home and shouldn’t require as much work or time but we are prepared for the worst.
So, what did I learn through this process?
If there is an item you really want, check to see if it is a special order or not. You can either choose another item or bring this to the contractor’s attention so that they can order it accordingly.
Be willing to adapt to changes. You never know what lurks behind walls. Whether it’s plumbing, electrical, or duct work, it would all require more money and time.
Don’t be afraid to ask questions at your local home improvement stores. They are very knowledgeable and can offer ideas on how to achieve your desired look and purpose.
Enjoy the process. It will only get more exciting.
“My First Rehab” is a collection of the rehabber’s investment experiences. Do you remember your first rehab? Share your story with IWP! Readers. Visit the “My First Rehab” section on our website or email to krystal@investwithpassion.com.
INSIDE THE NUMBERS
Property
Purchase Price: $156,000
Estimated Rehab Budget: $33,000
Loan Amount: $189,000
Actual Rehab Cost: $35,500
Out-of-Pocket Cost: $2,500
After Repair Value: $210,000
Equity: $21,000
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