The $3675 Total Kitchen Remodel with before and after pictures!!!!

General Real Estate Investing
1

Here’s my latest flip. A standard 3 bed/1 bath ranch. THOUSANDS of these homes were built in the 60’s and 70’s. I LOVE remodeling them. SIMPLE, QUICK, and PROFITABLE!!!

Here’s a quick break down of the costs involved in this kitchen rehab. First let me start by saying I almost NEVER rip out the old kitchen cabinets. Most of these homes have “built in place” birch plywood kitchen cabinets. These things are built like TANKS. I simply remove the old doors, order new MDF raised panel doors from www.lakesidemoulding.com, then paint everything a creamy white, install new pulls and hinges…DONE!! Granite and tile contractors do the rest!!

Here’s the cost break down.

Tile… $1500 installed (includes materials)

Granite counter top w/ under
mount sink… $ 800 installed

Appliances (Stainless) $1000 (includes Frig and stove)
Whenever I can get
them CHEAP, I buy and STORE
them for later use.

Cabinets doors, hardware, paint $375

TOTAL…$3675 Done in 2 weeks!

Here’s the before and after pics…

http://i303.photobucket.com/albums/nn148/petemfa/Remodel009.jpg

http://i303.photobucket.com/albums/nn148/petemfa/Remodel016.jpg

In this market really KILLING the remodel of these kitchens SELLS THESE HOMES!!! Granite, Stainless, and Tile in a starter priced home means a quick sale!! Make them BETTER than anything else on the market and it WILL SELL!!!

A couple of things to note in the pictures…First…hood fan has been replaced with stainless (used on craigslist $45) Second…take a look at the brick back splash. this was VERY 1970’s. Fake brick glued to the formica back splash. This stuff is a PAIN IN THE @SS to get off, so DON’T REMOVE IT!!! I just painted right over it, people LOVE it!! Also note the light switches…heres a GREAT tip for you guy’s. In these homes it’s about DETAIL…Before the painters come in I remove all the switch plates through out the house. I then get 1 can of plastic spray paint (Home depot) Then I spray each and every recepticle and switch white. It takes about 10 minutes and two coats. Once the painters are finished I buy new WHITE covers for those switches and BOOM!!! It looks like you replaced EVERY switch and recepticle in the home!! The switches in this kitchen were TAN and Black (mismatched) Total cost $4.97 for a can of spray paint!!!

2

I love it!!! I looks really good. Where do you find the cabinet doors at?

3

The old appliances look like they may have been in fairly good condition. What did you do with them?

Craig’s list – $350 for the pair?

4

Yep. Good ole Craigslist.

Sold on day one for $300 to a LANDLORD!!

It AMAZES me how much value people put on NEW Stainless Steel appliances!! (and you were right, NOTHING wrong with the old appliances) Typical American mentality I guess…It’s all for show. I use granite and stainless in ALL my rehabs now. It literally eliminates 95% of my competition. Remember…these are cookie cutter houses, ANYTHING you do to make them DIFFERENT really stands out to the buyer.

I love watching people come in to the home for the first time. It’s like clock work. “OH WOW!! I LOVE the kitchen!!”

5

You didnt change the thing above the stove to be stainless, might want to check that out.

6

Joker,
In his original post he states that he changed the hood to stainless. Obviously, this was after the pic was taken.

JP

7

What kind of tile did you put in ceramic or porcelin ?? $1500 seems like alot for a kitchen that size from the pic. how many sq ft was it ??

the cabinets and appliances look great I cant wait to start working on mine. closed tuesday on it still havent got the keys yet.

I cant seem to find as good of deals on stainless yet. maybe i havent been looking in the right spots plus ive been busy. I plan on doing all the tile work myself, i actually enjoy tiling and it saves alot of $$ DIY.

Ill make sure to take pics for everyone to see. thanks for sharing the pics it helps us newbies with the visual learning.

8

Kitchen looks great man, like something right out of HGTV :biggrin

Just out of curiosity though, have you ever tried using like a light stain on the cabinets rather than the paint? Just curious how much more work that would be for the benefit.

9

FdJake Nice Job, I like the way you think!

Could you share the rest of the details with us all.

  • Location?

  • Price Paid?

  • How you found the deal?

  • Total rehab cost and total time?

  • What else you did to the rest of the house? (pics)

  • Your Exit Strategy (Did you sell or rent it and the numbers?)

  • Total profit or expected profit?

Thanks :cool

10

fdjake - great work. Thank you for sharing. I copied your post to a Word file for future reference. Overtime I am building a nice word document with a lot of good tips/references… :O)

THANK YOU.

Quick question - it seems you did not install a dishwasher. I noticed that there was none in either picture. I came across a couple of houses that did not have dishwashers and my wife and I thought we would need to install one. In one of the houses we would need to be very creative in finding a place for it (small kitchen). I thought dishwasher was a MUST. Do you have any thoughts on that?

And one last question - we also saw some houses where the cabinets looked solid from the outside, but when we opened them there were significant stain and water damage inside. Not sure if it would make sense to try to save them or it would be better to start from scratch… Any thoughts?

Thank you again for sharing.

11

Here’s goes…

First off…I NEVER stain cabinets. You can NEVER match 35 years worth of patina on the boxes, and stripping them is too much effort. Remember, your trying to save TIME and MONEY here. Your not making the kitchen what YOU like, your making it BETTER inorder to SELL the home. Take a look at any current magazine devoted to Kitchens. The RAGE right now is PAINTED CABINETS. Don’t take my word for it, LOOK!!

Second, that “thing” above the stove is called a Range Hood. They cost $200+ in stainless. I found one on Craigslist AFTER the picture was taken for $45.

As far as tile goes I never spend more than $2.50/ sq. ft. for tile and my tile guy charges me $3.50/ sq. ft. to install it. The days of me breaking my b@lls to save money installing tile are OVER!!! I could get a better price but my guy is as reliable as a wrist watch. I call, he comes, 2 days later tile is installed and PERFECT everytime. This house had 250 sq. ft. of tile work including the hallway.

Dishwashers…I seriously doubt any buyer is going to pass on this home because it doesn’t have a dish washer. Take a look at the lay out. Putting a dishwasher in a kitchen so small would have added days and lot’s of dough to this job. You can’t take space away under neath the cabinets (there’s hardly any now) adding the dishwasher to the end of the counter increases your granite costs AND then you MUST ADD a custom built wall cabinet so you have balance between wall and floor cabinets.

Water stains…EASY…use KILZ primer then just paint the same as the outside of the cabinets. they’ll look brand new for about $10. I have NEVER seen a stain KILZ won’t cover.

Details…

Blue collar city, nice neighborhood, starter home area, good schools.
But very close to the airport. Outside of home was very nice. Nothing to do there. The inside was from the 1970’s. Just needed cosmetic updates.

Purchased for $110K put a total of $8000 into it. which included re-glazing the bathroom sink, and tub. New cabinet doors on bathroom vanity. 4 rooms with hardwood floors were all refinished to like new condition for $1000. Interior paint was $2000 and EVERY surface got painted. Like I said total cost was $8000. All done in exactly 4 weeks!! and that includes cleanout.

Just hit the market today for $199,900. As of today I’m into if for $123,000.

I buy and sell. CAN’T STAND dealing with moron renters. Been there, done that. I do about 4 to 5 of these a year. Great money, just repeat over and over. It ain’t rocket science.

12

Thanks for the replies fdjake. If you wouldn’t mind clearing one last thing up, you mentioned spray-painting the wall receptacles. This seems like a money saver, but what do you do to prevent the paint from going into the outlets? Do you tape them, or plug them somehow?

Anyways, thanks again for the pics. Nice job.

13

You can also get cheap new outlets and light switches at a home improvement store. The last ones I bought cost 37 cents for each outlet or switch and about 10 cents each for the new cover plate. It’s a very small cost, but looks very good to have all of them white.

14

fdjake. Nice job on that kitchen! How long are your flips on the market? Also, does the tax man consider you a “dealer”? I’ve heard they can really nail you when they do that.

15

Agreed, kitchen looks great! To go along with phlemboy’s question, do you do your flips in an s-corp? From what I’ve read/heard, it is typically better to do flips in an s-corp and buy&holds in an LLC.

16

Thanks for your response fdjake but is Blue Collar city somewhere in MI or TN. :cool

OK, since you are a flipper and yes I have done my share I wanted to ask a few things if I may be so kind as to do so?

You say you do 4 or 5 a year on these right?

Quick simple math. $199K projected sales price (so maybe in a down market 95% that at best?)

So lets say top dollar $190K - $123K cost (not including holding cost till it sells?)

So $67,000 Gross Profit

Minus Realtor Fees of about $11,400
Some Minor selling cost say $1,000
Tax on Profit at 30% or so $24,000

I will not even count Mortage cost till it sells, electric, water, sewer, lawn care etc etc.

So on the low side you expect to make $67,000 Gross Minus $30,600 in Expense and
that leaves you about $30,000 profit?

Is this about correct fdJake?

(Flipper TV Shows NEVER show you this part at all so its misleading I feel for newbies)

OK if you do 5 a year at this rate that is a profit off about $125,000 a year which is Good.

My question to you and all other “Flippers” has always been in the back of my mind is this…

OK, after say 30 years of doing this Wash - Rinse - Repeat - cycle of flipping, what do you have to show
for it other than a worn out pick up truck, and some wore out tools?

What other investments are you and other flippers doing to insure some “Mail Box” money comming in during your declining years? I always worry about this for flipper investors?

I do understand your statement here, but I dont call my best customers morons?

"I buy and sell. CAN’T STAND dealing with moron renters. Been there, done that.

All my properties I own I have property managers handle all this for me. I will say most property managers are not worth the 10% most of them want and it is hard to hire good ones, but there are some out there if you search hard enough. Yes you have to take the bad with the good, that just business. My PM in Charlotte just evicted someone who did not pay rent for 4 months, but my other houses in Charlotte are renting well. Luck of the draw I guess?

The way I see it is your tenants are buying the house for you, and your note is going down and in the same 30 years most people spend flipping, you could own at 4 houses a Year x 30 = 120 Houses. Lets say you kept some of them at least 366 days so you can pay capital gains, currenlty at 15%

(Unless by some chance Obama gets elected then he wants us to pay 30% capital gains!)

Ok, most homes double in value ever 10 year on average. :beer

So out of the 120 houses you may buy over the 30 years, lets say you keep just 50% of your best ones, so 60 of them.

Lets say you pay only $100K total in each one for this example.

OK, 1/3 of the 60 houses (20) double twice in 30 years.

So in the first 10 years they are worth $100K, second 10years worth $200K, Last 10 years $400K.

So you paid $100K in say 2010 - Now in 2040, then 20 of them are worth $400K each on average.

$300K equity in 20 house = $6,000,000.00 in your retirement account IF you choose to sell them.

You may decide since you own them to keep the cash flow each month. Lets say 30 years from now the $400K houses rent for a low estimate of just $1600 a month by then, and after expense at worst you keep $800.00 each month. (hands off)

20 x $800.00 = $16,000 a month comming in hands off.

Which in 2040 may but you 2 tanks of Gasoline? :rolleyes

Now this is just the first 20. I have not even done the math for the next 20 which should double in value at least if you bought right, so add another $3,000,000 to your bank account. Then the last 20 you just bought but they shoud go up in value on Avearge 3% per year…

So you have at least $9,000,000.00 in your equity acct to retire on. Not to shabby.

This is why I wanted your feedback on just flipping as well as any other flippers on what else are you investing your money in besides a job flipping houses.

As you can tell I favor the buy and hold method of Real Estate Investing as the way to wealth.

I welcome your feedback, as well as from other flippers and other buy and hold advocates. :biggrin

17

Wallacecobbs, I think fdjake was referring to the renters that don’t pay or cause problem. Tenants who don’t pay are NOT their best customers. So they’re not only morons but they’re thieves. However, it sounds like fdjake does well for himself ( I think he’s a also a firefighter) and invests in other things But I’m sure he’ll be responding better than I could. I just wanted to make point about tenants being moron. If everone paid their rent and there were no problems, everyone would want to be a landlord. I like the buy & hold strategy but I can also see where flipping can generate cash quickly to invest.

18

“All you have to show for it is a worn out pickup truck and some worn out tools”

Yea…and a 7 figure bank account. But it hasn’t taken me anywhere NEAR 30 years, and THAT IS THE DIFFERENCE. I don’t LIVE on my profits. Those profits are all little WORKERS who go out and make MORE little workers. The single most important thing anyone here can do is to learn how to make MONEY with your MONEY. NOT from real estate, but from MONEY. Stocks CONSISTANTLY beat real estate EVERYTIME! That is a fact, not opinion. I completely understand the advantages of real estate, but… Stats have been kept on this for DECADES. NOT investing in stocks is the single biggest mistake most people make. The PROBLEM is HOW they invest. Can you make money in real estate by just GIVING your money to a BROKER and saying “Hey, here’s $250,000, just put it in some real estate that you think looks good.” Do you think you could make money this way??? Yet people do EXACTLY that with their stock investments??

I roll my earnings into commercial real estate and stocks because they make small profits, BIG PROFITS!!!

Also, you pay taxes on what’s left AFTER the realtor and expenses are paid. (my commissions for realtors are 4% now a days, take it or leave it, believe me, THEY TAKE IT) I have no idea how you came up with $18,000(???) it’s actually $8000.

I’m not going to get into detail on how my business is structured.

I see a LOT of investors who buy HOUSES and rent them. The problem I see over and over is they finally get big and then get BURNT OUT!! By the time they start making REAL MONEY they’ve had it with the BULL SH*T. I know there are plenty of people here making good money renting homes. I’m just not interested in that, I’ve done it, it sucks in my opinion. I own my properties for about 90 - 120 days give or take. When I sell them THERE GONE!!! The new owners don’t call me when the toilet is plugged or a pipe bursts. I flip houses to create INVESTABLE CASH. That cash goes into commercial real estate, self storage warehouses, and stock that is SEVERELY under valued. You can read about the entire strategy by just looking at my past posts.

Buy things of value when NO ONE ELSE WANTS THEM or see’s the value IN them. Sell things when your local barber and everybody else is BUYING them. This has proven to be very profitable for me for a very long period of time. I went into great detail here about Ford as an investment. I LOVE IT when I hear about how rotten an investment people think Ford is. It almost guarantees me a healthy return if the MAJORITY think it won’t work. People say…“what happens if the stock market is down when you want to sell???” I say…the same thing that has happened to MILLIONS of people who held rentals through the present time. They’ll have to hold those properties for anoither 10 years to see what they saw in 2005. If your 60 years old at that point…YOU MISSED THE BOAT!!!

DO THE OPPOSITE OF WHAT EVERYONE ELSE IS DOING AND IT WILL USUALLY MAKE YOU LOT’S OF MONEY!!!

There is NOTHING wrong with buying and holding homes. I just DO NOT like owning an investment were the LAWS are on the side of the RENTERS not the owners. Read the posts here written by landlords. You have CITIES holding LANDLORDS responsible for DRUG activity AROUND their property. NO THANKS. I’ll buy Ford stock and wait for the economy to recover. If it doesn’t recover we’re all SCREWED so what’s the difference?
If a renter in my self storage warehouse doesn’t pay me…I SELL HIS STUFF!!!

THAT IS A BEAUTIFUL THING!!

Commercial property laws are a completely different animal. Your renting to a BUSINESS, if they don’t pay, THEIR SCREWED, NOT ME. I’ve wriiten about this here dozens of times. It’s all just my opinion. But it WORKS for me and I’ll continue to do it MY WAY!!

Let’s look at the house I just purchased. It was a STEAL at $110,000. if I wanted to RENT it, that home would bring about $1200/month. I’ll let Propertymanager explain how NEGATIVE the cash flow would be from this property. Not EVERY strategy works in EVERY market. Buying and holding in NEW ENGLAND is a LOSER!! So…with that in mind, I use another method to generate investable cash. I’ve been doing it for years and it works. My net on this project will be about $40K for exactly 4 weeks of work. I don’t know where you are, but in New England $10,000/week AIN’T bad!! My realtor called me today. (the home went on the market Yesterday with pictures on the MLS) he has 2 offers on the home, one at full asking and one OVER!! I’ve been doing this for a long time, an offer is NOT a sale…But…it certainly tells me two things. The reaction BUYERS are having to the home is exactly the same as the guy’s here had… and… a intelligently rehabbed, well priced home WILL ALWAYS SELL!!!
My houses just plain BEAT the other homes. Remember guy’s…the PART TIME flippers are GONE from this market. The husbands and wifes who watched flip this house all got their asses handed to them. What’s left is FORECLOSED HOMES, that the banks do NOTHNG TO, and homeonwers who can’t afford to rehab these homes with Granite counter tops, tile floors, all NEW stainless steel appliances, new paint, ect, ect. You tell me…who am I competing with??? Let me explain this…NOT ONE…NOT ONE SINGLE HOME for sale in this area, at this price point, has Granite counter tops, tile floors, completely refinished hardwoods and NEW, never used Stainless appliances…NOT ONE!!! If YOU were shopping for a home which one would you buy???

I’ll let you know when it sells officially.

19

Fdjake,

Do you sub the work out or are you doing the rehab yourself?

20

I do the kitchen cabinet work myself because I want them to look perfect. It’s very simple, good paint prep, make sure the new doors line up nicely, and then picking out GOOD hardware. Everything else gets subbed. It’s a TIME issue for me. get in and GET OUT. A crew of 4 guys can paint the interior of a house in 2 days. Alone… that same job would take me 2 weeks.

One last tip I’ll leave you guy’s with. The absolute best money I spend on these rehabs is with the DESIGNERS. I use two woman who are INCREDIBLE at picking out colors that other WOMAN LOVE!!! I just starting using them. They pick simple neutral colors and add window treatments to each home. It’s incredible what a difference it makes. Including buying AND installing the curtains they charge me $500/ house. They pick out EVERYTHING, tile, granite, paint, anything with color. In a dowm market making your homes stand out is money well spent.