Once you make the purchase and reality sets in, it’s time to get to work. But where do you start? While there are no specific guidelines, this is the order we try to follow.
1) Get a tetanus shot: Do I really have to explain this one?
2) Rent a Dumpster: This is the best investment you can make during your flip. Don’t try to save pennies thinking you can take it home and sneak a house full of demolition into your weekly trash pickup. Don’t have an aneurism when the neighbors sneak over at night and throw their old television in it. It’s going to happen. Dumpsters also are magnets for scrappers looking for treasures.
3) Demo: You are psyched to begin. You have your crowbar and sledge hammer. Let the games begin.
Things to remember:
- Don’t go crazy. Make sure you have a plan and follow it. Resist the temptation to go in there and start ripping the place to the studs.
- Shut off the water and disconnect the supply lines before yanking out the sink.
- Drywall is cheap. If you are dealing with a bad wallpaper job, tear out the drywall and start over. Removing old wallpaper and prepping walls is time consuming. You’re better off replacing it. The same goes with trying to patch old walls. Start fresh. In some instances, you can simply put a quarter-inch sheet of drywall over an old wall.
- Don’t tear out all the toilets at the same time. Again, do I really have to explain this one?
- Save some good carpet scraps to use as floor mats. The less dirt you drag into your house the easier it is to keep clean. When they’re filthy, toss them in the Dumpster.
- Dispose of old carpeting first. Wear a mask, especially if there were pets in the house. When disposing of carpet and padding, cut them into five-foot wide strips and stretch them out on the floor of the Dumpster. This preserves space in your Dumpster.
- Remove window trim, such as brackets and curtain rods. It makes for a much cleaner look if the walls have been patched, sanded and painted.
Create a staging area. We usually use the garage. Set up work benches and use shelves that can be moved from house to house to hold tools and supplies. Keep your ceramic tile, drywall, cabinets, etc., in the staging area so the contractors always know where to look.
Yes, I know, it sounds like your mother. But, it’s important. First of all, it’s nice to walk into a clean work place. But, there’s also a psychological factor here. Remember when you were kids and your mother sent you upstairs to clean your room, and it was such a mess that all you could do was look around because you didn’t know where to start? That can happen with a flip, especially if you are doing the work yourself. It is going to take longer than you hope and keeping it clean will help you maintain your sanity.
Electrical and plumbing:
Know your limitations. If you’re not an expert, hire a licensed electrician and/or licensed plumber to take care of electrical or plumbing issues. If you tear out drywall, have your electrician and plumber do the work while everything is open and they have easy access to the interior of the house.
Make Mama Happy
There is one constant in selling a flip house and we see it time and time again. If the wife or female buyer turns up her nose at a house, it is not getting sold. We remodel our houses specifically to make them appeal to women, focusing on the exterior, kitchen and master bathroom.
Here are some points to keep in mind as you decide how to remodel your house.
According to statistics from the National Association of Realtors, 50 percent of all potential home buyers make the decision not to buy a house before going inside. Curb appeal counts.
Do your landscaping. Remove overgrown shrubs and clean and edge the flower beds. Plant flowers in warm weather and spread fresh mulch.
Replace an old front door. A new door, fresh address letters and paint helps curb appeal.
It is important that the house looks clean and neat.
Almost every one of our flip houses gets a new kitchen. The question is how far to go. If you are going to splurge on one aspect of your flip, consider the kitchen.
If you strip it to the studs, remember that you can change the footprint of the kitchen fairly easily. If you are able, open a wall between the kitchen an adjoining room to create an open floor plan.
Here are the primary components to remodeling a kitchen.
- Cabinets – Shop around for the best deals in your area. A good cabinet distributor can be invaluable as they will come in, measure, share ideas and install. If you are a repeat customer they will often give you the same discounts they give home builders. Don’t discount the box stores. We have found great deals in places such as Home Depot, Lowe’s and Menard’s. Solid, lower-end cabinets can be purchased at the box stores. (Installation is always separate, so be sure to budget for that in your total costs.)
- Counter tops – The quality of your countertops should match the quality of your cabinets. Don’t buy high-end cabinets and put in a Formica countertop. Granite is the stone of choice for most modern, medium- to high-end kitchens. Visit a shop specializing in stone slaps. Shop around because the price of granite can vary greatly. Ask a lot of questions. Is finishing included in the cost of the granite? Is it extra to cut out the sink? Is a sink included in the price of the granite? Most granite dealers have a bone yard of left over scraps from other jobs. If you have a small kitchen, scavenge the bone yard for a deal.
Formica is no longer your father’s Formica. It comes in nice styles and can be a nice accent to the kitchen, and at a much lower cost. Even if you don’t want it for your kitchen, consider it for spare bathroom, laundry room counters, etc. If you purchase Formica slabs from a box store, examine them carefully for warping.
- Sink and fixtures – A nice, stainless steel sink is relatively inexpensive. To add a degree of style, get an undermount sink if you have granite counters. Fixtures can be expensive, but they can be a great accent to the kitchen. Again, don’t install expensive cabinets and countertops with a cheap faucet. It will stand out like a . . . well, like a cheap faucet.
- Flooring – Keep an eye open for bargains. Lowe’s and Home Depot often have neutral-colored ceramic tile for about sixty cents a square foot. If you go this route, buy plenty because once they run out, the odds of getting more tile the same color are minute. Flooring houses can generally set you up with a nice, middle-of-the-road tile for a decent price. Shop around. Narrow grout lines keep the tile looking sharp long after you have sold the property. Again, count for installation. You also will need Hardibacker or cement board, mortar and grout. For less expense flips, consider Linoleum or laminate.
- Backsplash – Ask your tile house to help with a design that compliments the countertops. White subway tile with smoked glass highlights makes for a neat, clean backsplash.
- Appliances – The sky is the limit. For most flips, you can find a good deal at a box store. It is not unusual to find a sale where you can but a four, stainless steel appliances – refrigerator, stove, microwave and dishwasher – for about $2,000. Obviously, for high-end flips you will want to invest in high-quality appliances.
Try to schedule the delivery of your appliances toward the end of your flip. This makes it less likely that they will get scratched . . . or stolen.
Tip: If you have a electric stove, stub a gas line into the floor. If you have a gas stove, run a 220-volt electric line into the wall. It is an inexpensive option that helps the buyer if they want to swap out the stove.
- Lighting – Can lights, or recessed lights, make for a clean look in the kitchen. Consider pendant lights over your island.
Tub/Shower – If you have the space and the flip can support it, a soaker or jet tub and a shower should be included. If it comes down to making a choice, we prefer to install a showplace shower.
- Consider dual shower heads.
- If you are not adept at tile work, get a consultant from a local tile supply house to help you with a design, or check the Internet for ideas. A good tile man can create recess areas for shampoo, conditioner, etc.
- If the house doesn’t support the expense of a fancy shower, consider subway tile with smoked glass highlights. This gives the shower a rich look at low expense.
- Clear glass doors – without metal boarders – add to the clean look of a new shower.
- Ceramic or granite flooring in the shower should be automatic. If the flip supports the cost, consider adding floor warmers before you put down your flooring. Travertine is a neutral stone that adds a classy look to a bathroom.
- A new toilet is an inexpensive add.
- Base cabinet – Evaluate your base the kind of flip you are renovating. If it is a low-end flip, consider painting it and adding new hardware, which will save you considerable cash. In most cases, you will still want to replace the counter and the sinks. However, on a high-end flip you will want to add a quality base. Make sure your counter compliments the floor and shower.
- Fixtures – New fixtures are a must. Trying to clean up old faucets for a new bathroom will cause them to stand out, and not in a good way. Look for modern fixtures at a cost that fits the flip.
- Lighting – Can lights are a clean addition. You can add additional light to the bathroom by installing an exhaust fan-light combination. Pendant lighting can add color and flair to the bathroom.
You’ve fixed up the kitchen and bathroom with Mom in mind. Now, throw Dad a bone by creating a Man Cave in the basement.
Completing a basic finished basement is relatively inexpensive – framing, drywall, trim, can lights, carpeting or ceramic floor tile. Dad doesn’t require much, and a basic finished basement is a good start that will enable him to add his personal touches later.
Also, if it isn’t used as a Man Cave, a finished basement is an ideal play room for the kids.
When to use a contractor
You will continually debate whether to contract out work or do it yourself, particularly if you are handy and like doing to work.
However you must always calculate the amount of time you invest in a project when making that decision. If you are working a regular job, how much work can you get done on a flip house in a few hours each evening?
There are days when we work on a house for 10 hours. We’re not taking a lunch break or smoke breaks; we are putting in a good 10 hours. At the end of that day, we will look at what we accomplished and it may be significant for 20 work hours, but as a percentage of the overall project it did not amount to much.
If it takes you a year of evenings and weekends to complete your project, you’re missing the point of “flip.” And, even if you’re doing the work yourself, it is still costing you money each month in the form of carrying charges – property taxes, insurance, utilities, association dues.
While you are saving some money by doing it yourself, you may be ahead of the game by contracting it out. It will make the project go faster and enable you to turn your dollars over quicker and invest in another property.
This is always a balancing act. Which is eating more of your profits – carrying charges or contractors.
The longer you are in the business, the more familiar you will become with the contractors in your area. We have found it beneficial to work with smaller contractors. Their rates are lower because they are not paying for huge overhead.
They are grateful for the repeat work, which means they show up when we call. (One contractor told us we were, “gold card members.”)
If you are not in the trades and unfamiliar with contractors in your area, spend some time asking around for recommendations. You can ask:
- Supply houses;
- The contractor desk at your local box store;
- Real estate agents;
- Other contractors.
You may have to kiss a few frogs, but eventually you’ll be able to put together a stable of reliable contractors who will actually return your phone calls and get to the job site and crank out the work.
As you start out, make sure you get multiple estimates so that you know you’re not getting taken.
Never pay contractors in advance. While the great majority are trustworthy people, there also are the unscrupulous ones who will take your money and you will never see them again, or they will do a half-assed job on your project.
Some contractors want money upfront for materials. If that is the case, you can always supply the materials.
We sometimes pay a premium for certain contractors, but they come when we call, do good work, get the job done and get out.
Create a form and get their information so you can send them a 1099 tax form at the end of the year. You want their name address and Social Security number or federal ID number tax ID number. This will save you a lot of hassle on down the road