Thursday, April 12, 2007

Flipping Houses

I found a new blog yesterday by an individual that works full time and is buying, renovating and flipping homes in his spare time - Flipthyhouse is his website. He provides lots of details about his activities, costs and financing. Hope that as he continues he will have lots more information.

As far as my own efforts go, I am in the 7th week of the renovation of a home I purchased in February and the punch list of items to do seems as long as when we started. I had originally budgeted about $7000 for repairs and planned on having contractors do a lot of the work. After the homeowners moved out and the 2 feet of snow melted I found lots of additional items that I had either overlooked or were hidden:
  • the roof is at least 20+ years old and will be an obvious negative
  • the hot water heat boiler must be the original from 1955, so I think I need to replace this. I'm debating whether to put in an 80% efficient furnace @ $1100 or a 95% efficient furnace which costs $3300. Will a homeowner pay for the high efficiency boiler?
  • the windows were shot and leaking badly. I've written about my experiences replacing them here and here.
  • The bedroom doors were full of holes and needed to be replaced. Iordered replacement doors from Lowes but after I started installing them I noticed they were wrong. So there is a 3 week delay here. Lowes will not be on my list of purchasing "special orders" in the future.

So we have been doing most of the work ourselves and it is taking a long time. The house is the largest one I have rehabbed at 2880 sq ft, so just painting everything has taken most our time. We are nearly done with the painting. Fortunately, with the techniques I learned from Pete Youngs, my costs to do jobs (like windows) are far below my estimates. However, I expect I will spend $10,000 on rehab which is over my budget.

On the other hand, I feel that we may be able to sell the house for more than the $182K that the sellers paid last year. Unfortunately, I don't have any good market data to support this. There has been only one sale in this neighborhood for more than $182k and that house had 3400 sq ft of living area. The house is in a really nice neighborhood, but a really bad zip code.

Last night I was utterly exhausted. I was painting ceilings the last 2 nights which is literally a pain in the neck. We have been working until 11pm for 5 straight nights. I need to get up at 6:20am every day for my day job. Maybe this evening I can take a night off and watch the Sabres play some hockey.

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