A "before" picture of the kitchen. The cabinets, sink and paneling are now gone.
In case you haven’t read about our house flipping adventure, the quick story is that my wife and I have partnered with our 30 year old son to buy, rehab and sell a house. This house is solid, in a great neighborhood (last night the neighbor, who knows we are rehabbing the house for a flip, brought us a pie as a housewarming gift) but had paneling on most of the walls and outdated ceiling tile on all the ceilings and worn carpet on the floors.
So here is our update.
We have removed all of the paneling, all of the carpets and all of the ceiling tile (including pulling all of the staples from the furring strips); we have gutted the kitchen in preparation for new counters and are getting started on plumbing and wiring. We have our design complete, thanks to my design expert wife and have learned that our original rehab budget was not enough. No big surprise, but one reason we are running over budget is because we have upgraded the quality of the rehab; focusing nearly all of our efforts on the kitchen and bath. Will a nicer – and more expensive – finished product bring more money? We are not sure, but we are sure that it will help the house sell quicker.
Now: on with the Roundup!
Recommended reading:
Savings Down, Spending Up but What Does it Mean? at Watson Inc.
True Christian Conduct at KNS Financial
Straying from the Path of Intention to Impulse at Money Crush
Use Math to Alleviate Fear of the Stock Market at MORE Than Finances
20 Ways to Save on Your Vacation at Consumer Boomer
Dave Ramsey Was Wrong at Eliminate the Muda
Faith Based Investing/Thumbs Up or Thumbs Down? at Money Help for Christians
Bankruptcy When It’s Your Own Fault at Budgeting in the Fun Stuff
Joe elsewhere on the net:
Life of Moses: How God is Always Working in Your Life at Christian PF
Roundups who have included my posts:
Memorial Day Roundup hosted by Free From Broke
Yakezie Weekly Roundup at Engineer Your Finances
Best Personal Financial Planning Ideas at The Skilled Investor
Weekend Love Link: Finishing the Drywall Edition at Rainy-Day Saver
Carnivals I have participated in this week:
Best of Money Carnival hosted by Free Money Finance
Carnival of Money Stories hosted by Personal Finance Analyst
Money Hackers Carnival hosted by Saving Money Today
Baby B00mers Blog Carnival hosted by Baby B00mers US
Christian Carnival hosted by And She Went Out
Carnival of Financial Planning hosted by Free Money Finance
{ 17 comments… read them below or add one }
Those two rooms are so important I think it’s good you’re not skimping on the quality of the materials. Can’t wait to see the finished product.
P.S. Are you getting rid of that ugly flooring in the kitchen?
Bucksome Boomer´s last blog ..Dental Care Makes a Difference
Where’s the after picture Joe? Not yet done I guess? Excited to see it happen!
Best,
Sam
Financial Samurai´s last blog ..Only The Poor or Super Rich Say, “Money Can’t Buy Happiness”
@Bucksome,
YES! The ugly flooring in the kitchen is going to be replaced. We are going with a very nice dark laminate flooring throughout the house.
@Sam,
Hold your horses.
I will show the finished pics, but it will be a while.
Thanks a bunch for the link! Good luck with the rehab and selling!
Darren´s last blog ..Use Math To Alleviate Fear Of Stock Market Volatility
Thanks for the mention
Sounds like it’s going to be a nice house. I think it would be fun (although also a lot of work) to rehab a house like that.
Jackie´s last blog ..Slip of the Tongue or Truth in Advertising?
Whew! I can’t imagine going through a flip in this market. Still, if you do it well I’m sure you will find a buyer. Best of luck.
Craig/FFB´s last blog ..What is a Health Savings Account?
@Darren,
You are welcome! Thanks for writing the great post I was able to recommend.
@Jackie,
It is both fun (so far) and a lot of work. We have pretty much gutted the house and are ready to start building it back VERY nicely.
@Craig,
The housing market in our quaint little Southern Illinois area has not had the crazy fluctuations that some areas of the country have had. We think we bought at a good price, so we will find out when we sell if we jumped when we shouldn’t have. Thanks for wishing us luck.
Hi Joe,
Best wishes with the f**p and we apologize about using the asterisks, but we absolutely cringe at the sight of that 4-letter word…it is, to us, much like very long and fragile fingernails being dragged (kicking and screaming) across the blackboard.
Steven and Debra´s last blog ..Some Say, “God is in Control”: We Ask, “In Control of What?"
Keep updating this journey, it will be interesting to follow from afar. I have never flipped, and won’t do so anytime soon, but gave it some thought a few years back – and may venture into that territory sometime in the future. It has always fascinated me, and I would like to opportunistically try it at some point. So, living vicariously will do for now.
Before/After pictures would be interesting to see. As for specific financials, I realize that’s private – I don’t share my own specifics on my blog – but perhaps we can see percentage gains when all said and done? May be too much to ask for, if so no offense meant:)
Anyway, thanks for sharing this journey.
Squirrelers´s last blog ..Squirreling Gone Wild #8 – Doubling Down
@Steven and Debra,
Thanks for the best wishes. I take it you have had a bad experience with a f**p. Have you ever written about it?
Squirreler,
First, I want to say that I love the name of your blog. Original and catchy…it creates curiosity.
Second, one primary reason I am writing this series is so people can follow vicariously. We have a bunch of “before” pictures that I will be showing along with our “after” shots.
Yes, the finances are personal, so I will probably be discreet about specifics, but we will definitely share how it went. You are not asking too much! Stay tuned for the ride.
Joe,
Our aversion to the use of the word f**p, as applied to real estate transactions, stems from the gigantic financial smoldering hole and associated human pain and suffering we see via foreclosures, tent cities, the homeless living under bridges or in plastic covered cardboard boxes, escalating unemployment, resultant broken marriages, and the on-going banking debacle.
The term f**p epitomizes the casino mindset associated with this smoldering hole. F**pping is, essentially, the combination of warp-speed velocity and massive leverage applied to financial transactions. It is the movement of paper (deeds, stocks, or other assets) primarily contingent on the ‘greater fool’ theory with no consideration given to either existing fundamental value or value added. It is a very risky game of financial musical chairs. It is very risky in real estate because of the inherent lack of liquidity prevalent in a market downturn or bubble implosion. The nimble can unload their stocks rather quickly (at some price), but real estate doesn’t have that escape hatch.
The term f**p is a mischaracterization of your project. You’ve assessed the market conditions, looked for existing value, and have a plan for adding value via sweat and capital. The only question we would have about the project is the time table for its completion. Do you have enough profit margin built in to sustain a market double dip scenario?
Best wishes on the project!
Steven and Debra´s last blog ..Some Say, “God is in Control”: We Ask, “In Control of What?"
Thanks for the update. I was wondering about the whole budget issue because it seems inevitable that most rehabs will come in overbudget, especially when you are just starting out flipping (no experience… just watching others). Also, thanks so very much for the mention; I really just found out. You rock!!!
Friendly Regards,
Shawn
Roshawn @ Watson Inc´s last blog ..Is It Wrong To Strive For Job Security?
Joe,
I’m avidly following your project and, while we don’t recommend buy/fix/sell as a wealth building strategy in the current economy, it sounds like you’re well aware of both the tight margins and risks inherent in the project. So…might I suggest a couple of resources?
This is a great book all about the art of the Flip (http://bit.ly/Flipit) with sample budgets, time lines and business models from some of the most successful investors.
Here’s the National Association of Realtor’s annual study of (http://bit.ly/dg9qpn) cost vs. value on remodel projects across the country and if you really want to geek out this link (http://bit.ly/a6b7Uv) takes you to the underlying data by region.
I was thinking the one big structural change that would add HUGE value would be adding a 2nd bath. What feedback did you get that made you decide to stay with just the 1 bath?
Looking forward to reading more on your great experiences.
Betty
Betty,
Wow. Thanks for the interest in our project and for all the info.
In answer to your question about adding a bathroom…we really wanted to, but there is just no room to do so. The existing bath and utility room are together in a 10′ x 10′ room, so we are separating the two rooms, replacing the one piece fiberglass tub with a new tub and ceramic tile enclosure, new vanity and toilet. We wanted to figure out how to squeeze a 1/2 bath in the utility room, but with a washer/dryer, water heater and utility sink, there was just no room. We didn’t want to sacrifice a bedroom (there are three small bedrooms now), so we are stuck with one bath. The entire house is only 1100 SF, but we knocked out most of a wall between the living room and kitchen/dining room to give a “great room” feel. We are replacing all kitchen cabinets, adding an island, new lighting, walls and flooring, so we think the house will “pop”. We are also painting and planting in front for added curb appeal. The house is in a choice neighborhood, and our improvements will not bring our asking price above the market value of surrounding houses.
My son, wife and I are doing most of the work, but we hired a plumber and will utilize an electrician to help get our wiring organized. We will hang the sheet rock, but will probably hire someone to finish it.
As promised, I plan to give updates as our work progresses.
I like Steven and Debra’s first comment. Too funny. Wow, you guys have your hands full. But best of wishes to your hard work you have blacked out your calendar to do.
Great links, too.
And your response to Sam was funny too.
Can wait to see the after pics! And from a woman’s standpoint… upgraded kitchen {definitely} and bathrooms are a plus, in regards to buying.
Money Funk´s last blog ..Early Retirement Extreme 21-Day Makeover
Money Funk,
Thanks for your encouragement. Yes, we have our hand full. Things are already getting testy at times when we allow ourselves to get too tired or stressed. But with all of you cheering for us, we get buoyed up and re-invigorated.
I never dreamed of the interest this “Flip” series would generate. Just knowing so many people are watching keeps me on my toes.
I too am looking forward to those after pics
!
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