Archive for November, 2017

Flipping Houses on a Dime: The $15k Rehab

Hey everybody! Melissa here, back with another before and after blog post. This one is all about flipping houses on a dime. We’re going to walk through this rehab that only cost us $15k in repairs!

Ok, ok, the intro is a little misleading. To be honest, this house was already in really good shape, so there wasn’t much that we had to do to it. Other than updating features, replacing the floors, and adding a door (we’ll get to that further down), this house was a pretty simple flip. Which reminds me, sometime when it comes to flipping houses on a dime it’s all about luck. We go lucky that this house was an easy rehab. Believe me, we’ve seen our fair share of nightmare properties!

Without further hesitation, let’s get right into how we’ve been flipping houses on a dime in this rehab before and after!

Flipping Houses on a Dime: The Numbers

It’s no secret that flipping houses costs money, that’s why they call it real estate investing (duh). We bought this house for $138,000, spent about $15,000 in repairs, making the total expenses $153,000.

Because of the area the house is in, the size, and the improvements we made, the house was listed at (and sold for) $220,000. With the costs the way they were, we made a gross profit of $67,000! Not bad when you’re flipping houses on a dime for a living!

flipping houses on a dime outside

What helps us the most when we’re flipping houses on a dime is really finding the best deals on the materials we use. Since we work with the same contractor, we have a great rate that’s already been negotiated, so we don’t have to worry about spending too much money there. However, when you’re replacing the floors and countertops, you need to stay conscious of how much you’re spending.

When we replace the floors, we use this great wood vinyl that comes really cheap. The wood look vinyl that we use is luxury quality. The reason we use wood vinyl instead of hard wood is because it’s cheaper, and it wears much better. Whenever you’re replacing floors, you need to think about the longevity of the product. Especially in a family sized house like this one, you need to plan for the future. Buyers with children and pets aren’t going to want to live in a house where the floors aren’t durable, or are difficult to keep clean.

Just like the floors, you want to be price conscious with the countertops. It’s important to look for something nice that sets your house apart from the others on the market, but that’s also easy to keep clean and is durable. When we’re flipping houses on a dime, we stock up on Carrera marble from a vendor here in town. Because we buy in bulk, we really aren’t spending much per house. When you find a good vendor, don’t let go! Working with someone for a long time builds a relationship and makes getting good deals on material that much easier.

Before and After: What We Changed

On the Flipping Junkie YouTube channel, we made a before and after video of this property. Check it out to see all of the improvements we made! For now, let’s go through what we changed in each room and how we were able to get by flipping this house on a dime.

The Living Room

flipping houses on a dime living room

As soon as you walk into this property the living room opens up with a walk to the breakfast room and kitchen. The layout of the house was great, so we didn’t have to do any major demo (thank goodness)! However, the living room was pretty dark. There was carpet in the living room as well. Because the owners had lots of pets, the floors had that musty cat and dog smell. We knew that we would have to replace that ASAP.

Other than taking up the old floors and replacing it with our wood vinyl, we also added can lights to brighten up the space. This house didn’t have any large front facing windows to let in natural light to the living room, which is what made it so dark. That’s why we added the can lights. Can lights aren’t expensive to add to a room. Costing between $7 – $12 dollars a light, and the installation fee from our contractor, we transformed this room for pennies.

The Kitchen and Breakfast Room

The breakfast room wasn’t in bad shape. We continued the flooring from the living room into this room. Then we repainted the walls so that the whole house would have a uniform look to it. After that we added a nice chandelier from Home Depot and called it a day!

breakfast room flipping houses on a dime

The chandelier only costs about $100. Just like in our IKEA inventory video, we buy our accessories in bulk so that we’re not over spending on all of our properties. When you’re flipping houses on a dime, you need to be smart about what you’re spending on the improvements to your properties. Light fixtures and accessories are no different. The best method we’ve had is to get an inventory of the things you know you’re going to use in your properties. That’s why we stock up on light fixtures and countertops. The more you buy in bulk, the less you’ll spend over all.

Ok, tangent aside! Let’s talk about the kitchen. Like we said, we replaced all of the countertops with the Carrera marble we have. In addition to that, we updated the faucet and added an under-mount sink. We changed the backsplash from the builder-grade to a white subway tile. Each of these tiles costs under a dollar. Replacing the backsplash with something nice and clean like this really brightens up the room and makes it feel larger than it is.

kitchen lights flipping houses on a dime

The biggest money saver in the kitchen was definitely the cabinets. We’ve talked about this before in the Flip Pilot group. Don’t waste money replacing the cabinets if they’re in good shape. Just because they don’t quite look the way you want them right now doesn’t mean you can’t improve them.

All we did was sand them down and give them a new coat of paint. Voila! You can take boring, brown, ugly cabinets and make them stunning with a fresh coat of paint and new hardware. Just like the light fixtures, if you buy your hardware in bulk it will save you money in the long run. There is absolutely no need to change out the cabinets if you’re flipping houses on a dime.

cabinets when flipping houses on a dime

The same goes for the appliances. If they’re in good shape, don’t spend a thousand dollars on a new over and stove! Make sure you’re gentle with them during the rehab, clean them up, and put them right back in. The appliances in this kitchen were in great shape, so we didn’t need to spend any extra money on replacing them.

Upstairs

This property had an upstairs living room right in the middle that the bedrooms branched off of. Just like the living room downstairs, all we had to do was replace the carpet and add some can lights. If you can keep your rehabs simple, you’ll be flipping houses on a dime like a pro. Don’t get too crazy when you’re rehabbing a house or you’ll end up spending an arm and a leg.

Each bedroom, other than the master (we’ll get to that), was just as simple as the upstairs living room. New paint, new carpet. Bing, bang, boom, done. We did make sure to replace all of the hardware on the doors – closets included – with brushed nickel instead of the builder grade copper looking door knobs. That’s not a necessity, but it’s definitely something we do to make our houses look more cohesive. We’ve talked about this in the Flip Pilot group on FaceBook as a great tip for flipping houses on a dime. Swapping door knobs is simple and cheap and gives your rehabs one more bit of your own personal flair.

The Master Suite

Ok, so this master bedroom started off really dark (like the whole house), but that wasn’t the biggest issue. The big problem with this room was that the door was missing! I have no idea if they removed it just because, or if it had been damaged, or what. I don’t know about you, but when I go into my master bedroom I want a little privacy, especially as a mother. Needless to say we added a door.

replacing master doors when flipping houses on a dime

This master bedroom had a very interesting layout that I really liked. There was a nice space for the bed, some nice windows, but the really interesting part was a built in office nook. I don’t see that in my rehabs often, so I was really interested in it! This little office room had a big open arch to get to, with one window on the outward facing wall. The only problem was that it was so dark. To fix that, we painted the entire master suite a nice bright grey color that really showed off the natural light from those windows. For the most part, if your properties have good bones like this one, flipping houses on a dime is as simple as some new paint and carpet.

The master bath is my favorite part of this rehab! We removed the old vanity because that’s just our thing. Typically in all of our rehabs we replace the builder grade vanity with the stand alone sinks. Mostly, that’s just our style. I like doing this because doing it gives the whole bathroom such a clean look. In addition to changing the sinks, we removed the old tub surround and tiles in the shower and replaced them with much more modern tiles.

I used that nice dark wood grain tile in the shower to match the color of the wood vinyl we replaced the floors with. This wood vinyl is the same that we used downstairs. We like replacing the floors with this because it looks nice, and is really cheap to do. Our wood grain tile costs roughly $0.25 for a sample, so if you’re interested it’s literally a quarter to check it out!

changing tiles when flipping houses on a dime

I also found this great textured wave tile for the tub surround and just fell in love with it. This tile costs roughly $17/sq. ft., but since I was using it for the tub surround it didn’t cost much at all. The color is great and matches the light grey of the wall in addition to making this bathroom stand out against all of the other houses in the area.

This neighborhood is brown. All brown. Everything is brown. This master bathroom definitely stands out. That’s the biggest thing to keep in mind when you’re flipping houses on a dime: you don’t want to make your properties look like all of the others. Find an inexpensive way to make your stand out so that you can move your inventory quickly.

Are Your Flipping Houses on a Dime?

Did you get any ideas for flipping your next house without spending an arm and a leg? Our rehabs have a distinct look to them, if you haven’t noticed yet we sort of have a pattern going with the wood vinyl and grey walls. Because we use a lot of the same materials in our rehabs, we buy in bulk to take advantage of dealer discounts. Everything from the flooring we use to the kitchen countertops we buy in huge quantities. It ends up being much cheaper for us in the long run, keeping us flipping houses on a dime all the time!

Have a suggestion, question, or story to tell? Join our Flip Pilot group on FaceBook! You’ll get the chance to network and get in contact with other active real estate investors just like you. Share tips on flipping houses on a dime! Get suggestions on what to do with your nightmare properties! Find other investors in your area to build you wholesale buyers list! The possibilities are endless when you’re a Flip Pilot. Come join us!

The post Flipping Houses on a Dime: The $15k Rehab appeared first on Flipping Junkie.

Rehab Punch List – Getting Ready for Market

Hi everybody! Melissa here again, with another rehabbed property. In this article, we’re going to be talking about my rehab punch list for one of our properties, and how to make sure your properties are ready for the market.

Breaking Down Prices Before the Rehab Punch List

This property was bought for $130,000, which was kind of amazing considering just how big this house is. We don’t typically do houses this large. In the end, we only ended up spending about $23,000 on the rehab.

Repairs Needed

This two-story, 5 bedrooms, huge lot was definitely larger than we normally do. The rehab itself really wasn’t too difficult. The house was in pretty good shape and just needed some updating, as far as the inside went.

outside issues rehab punch list

However, the roof needed to be replaced because of some significant structural issues. There was a big hole in the roof on the outside near the back of the house, and a hole on the brick wall facing the side yard. That definitely needed to be patched and fixed.

Other than that, the house was in pretty great shape. We cleaned up the front yard and the trees that overhung to the roof. There was a really nice deck in the backyard that was in good shape. All we had to do with that was sand it down and give it a new coat of paint. Typically, we like to leave decks if they’re good quality.

Then, on the inside of the house, we updated a lot of what was already there. The countertops are replaced with the granite that we like to up in our houses, and we always make sure to replace all of the old floor with our signature wood vinyl and new carpet in the bedrooms. We repainted the walls in a nice neutral grey color, to keep the house clean looking.

walls before and after rehab punch list

After the floors and walls were updated, the appliances needed to be changed out. The shower heads were old, as well as the sinks in the bathrooms, so they needed to be replaced. If the kitchen appliances are in good shape, there’s no need to replace them (that’s just extra expenses). Just like the cabinets, if you can fix it up with a new coat of paint then there’s no point in spending the money to get them replaced. We talk about this a lot in the Flip Pilot group on Facebook. If you’re interested in being a part of our conversations, join the group here!

The Rehab Punch List Process

Personally, I like to start with the outside of the house when I got through my rehab punch list. That way, I make sure the big items that would be covered on an inspection have been taken care of. I have a few tools I like to use when I go through a rehab punch list such as my blue tape bracelet, handy-dandy note pad, and a pen.

However, the most important tool I have with me during a rehab punch list is my cell phone. I can not tell you how many times that phone has come in handy. My contractor is on call 24/7, so when I do these punch lists I’m able to reach out to him with any questions I have about the property. Especially when you’re getting a house ready to go back on the market, you always want to make sure your repairs got done. If they didn’t get done the way you had planned, call your contractor and find out why!

kitchen before and after rehab punch list

Going back to the rehab punch lists process, I also bring the scope of work with me. I do this so that I can double check that all of the items on that list got completed during the demo. The key when you’re doing a rehab punch list is to go slowly, you definitely don’t want to miss anything important. Having your scope of work list with you will guarantee that you revisit those items, but more importantly, you want to keep an eye out for any little things that might have gone unnoticed the first time.

For example, during the demo process, it’s inevitable that things are going to get bumped, scraped, chipped, or installed incorrectly. There have been so many times where I go back to do a rehab punch list and find outlets are installed up-side-down. It’s things like that that can go unnoticed if you don’t take your time with the punch list.

What I Look For

It really comes down to the details. When I’m doing a rehab punch list I inspect everything from the texture on the walls, to if the paint has an even coat. Then, beyond the obvious cosmetic issues, I look at the elements that are going to be covered when the house gets inspected.

master bath before and after rehab punch list

Important aspects of a house that are looked at during an inspection are:

  • Trees rubbing against the roof
  • The water heater raised 18 inches off the floor
  • Weather strips on the doors and windows
  • Hand railing on stair caseses (both inside and outside)

There are a lot of little things as far as safety goes that can be over looked. Especially when you have something like a deck at one of your properties, you always want to make sure there’s no structural damage. For instance, this house had that great big deck in the back yard, but it was a two story deck. Not only did we have to make sure the stairs on the deck were safe, with the appropriate hand railing, but we also needed to double check the safety of the railings and banisters were safe on the top section of the deck.

Always, always, always make sure your doors are sealed. That’s such an easy thing to fix, and just as easy to over look. You never want to miss the weather stripping on your doors. A good way to tell if a door needs a new seal is just to close it from the inside and see if there’s any light showing through from the outside. If there is, then you’re going to have to replace it.

water heater rehab punch list

The same goes for your windows. In fact, we had a house where we upgraded the windows to ones that open from side to side, but were installed opening up and down. Always make sure your new additions to the house are installed correctly!

Speaking of doors and inspections, a lot of times an inspector will look for a fire rated garage door. This goes back into that bit about safety we were talking about. If your area doesn’t require fire rated garage doors, or if you don’t know, it’s still worth while to make sure you get one installed. It doesn’t take long, and it doesn’t cost much. At the end of the day, the safety of your house is the most important thing to have.

Besides safety, there are other big things to look out for when you’re doing a rehab punch list. The things I keep an eye out for are:

  • Leaky sinks
  • Making sure all the lights turn on
  • Clogged drains
  • Making sure the showers and bathtubs turn on
  • Nothing blocking the garbage disposal
  • Double checking the dishwasher

Rehab Punch List Wrap Up

Now you know what I look for in our rehab punch lists. The most important thing I look for when I’m double checking my properties to get them ready for the market is everything that will be looked at in an inspection. As long as your properties meet inspection standards, you’ll be ok.

shower rehab punch list before and after

The next thing I look for is the quality of my rehabs. If I removed a wall, or added a wall, or did any major repairs like that I always double check to make sure they came out the way I wanted.

When you do a rehab punch list, what do you look for? Let us know in the comments! We love to hear about what your real estate investing businesses are up to.

Liked this article? Check out the video we made of this house flipping scope of work on our YouTube channel!

If you want to keep up with us on a day-to-day basis, join the Flip Pilot group on FaceBook! We’re always active there, and would love to hear about your house flipping nightmares! Don’t know what a Flip Pilot is? It’s you! And me. And every active, serious, real estate investor. Come network with us so you can take your real estate investing business to new heights. Talk to you in the group!

-Melissa Johnson

 

The post Rehab Punch List – Getting Ready for Market appeared first on Flipping Junkie.

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