How much work in a typical rehab job?

Rehabbing, Fix and Flip, Rental Properties
1

Hey guys. I’m new to this forum as well as new to rehabbing. I apologize for the long post; I tend to describe my thoughts in detail.

My wife and I own a fixer-upper (our first home) that I’ve been renovating in order to get my feet wet. I’ve made so many mistakes so far and have learned so much! I’ve come to realize that we paid too much and that the ARV won’t be as high as we’d hoped. This has been a great learning experience, though, and I’m so glad I just went ahead and did it. You have to crawl before you can walk.

At the moment, I’m curious as to what level of work a rehabber will typically perform on a house. I am not a typical buyer for a house. By nature I tend to be technical and think of houses as machines we use to keep us sheltered and entertained. I pay attention to things like insulation, electrical, HVAC, etc. when looking at a house I want to live in. I expect that many people will not think this way.

This being the case, I have a few specific questions based on my experiences with my old house.

  • Tearing down plaster -

The plaster in the bathroom was in rough shape, so I replaced it with drywall. This gave me a great opportunity to run wiring up to the loft and to do plumbing. How often do you find yourself tearing down plaster, if ever? Hanging new drywall in old houses is time consuming, to say the least, and disposing of the old plaster and lath is a job in itself. Does a rehabber typically try to hide/patch bad plaster?

  • Stripping paint -

I’m currently stripping the paint off the trim in the bathroom. This has been a serious pain; I don’t think I need to explain. I don’t think I’ll bother stripping the rest of the house, but the trim and baseboards look terrible under 8-10 coats of paint. In these instances, would one normally replace the trim or just slap on the 11th coat of paint?

  • Electrical -

I’ve been doing a lot of electrical. There was, previously, one outlet in each room and not a single three-way switch for the lights. How much do potential buyers notice these things? What is essential in terms of electrical and what is not?

  • Windows -

How important is it to replace old windows? This is pricey.

Thanks for any help. I’m not going to take any actual steps until I know precisely what I’m doing. This current house was for practice; the next one actually has to make some money.

2

Biff,

(1) If it were really bad, I would do as you did – remove and sheetrock. None of my properties have plaster…

(2) Caution!!! If the paint is old, there is a high likelihood that it has Lead Base…stripping is only slightly better than sanding as far as removal! See: http://www.epa.gov/lead/leadinfo.htm#buy

I follow the EPA brochure and ‘encapsulate’ it (prime and paint).

(3) I try to find properties that don’t need a great deal of electrical work…it is expensive and/or time-consuming.

(4) I buy to hold as a rental. I fix the windows to serviceable…caulk and putty them as necessary. As long as they are safe and you can’t “throw a cat” through the gaps, it’s fine. If you are selling when you are done, different rules may apply.

My two cents…

Keith

3

It all depends on the property. I try to work in areas that have really nice homes — and I buy the one that should be torn down. Next time, (I promise) I’m going to tear it down. Some people call it urban infill development. I think of it as rehabbing. So anyway, I basically end up gutting houses back to the studs and going from there. My houses are easy to sell. “It’s got all new electrical, plumbing, HVAC, drywall and trim.” What more could they want?

4

DDavis: I would think that such houses would be hard(er) to find. Am I wrong?

5

I think there are many buyers out there who are lured
by the possibility of a lower price and nab the fixer upper.

The end result is an overshoot in the costs beyond the
median price for the neighbourhood.

The banks have got greedy and are holding tight
to such properties. They are looking for a owner buyer :slight_smile:
I am dealing with one such foreclosed property where the
banks wants more than what they took the house back
for at the auction. The house needs rehab and they want
someone to pay retail.
This is in a nice neighbourhood.
-Krish

6

When my wife and I were looking for our first house - the one I am currently renovating - we saw one house (foreclosure) that was listed for $95k. It was in rough, rough shape, but the street was OK and is gradually getting better.

Anyways, I was a first-time home buyer, but I instantly saw that it would take a fortune to repair. Judging by the listings of other houses in that part of the city, I judged that it would probably sell for $120k if it was in good condition. Or so I estimated; I am totally new at this. In any case, I wasn’t confident in my ability to turn a profit on the house.

The house eventually sold for $120k. Either I am severely wrong or the buyer is. I suspect it’s not me.