Fixer Upper

by Marla
(Ontario, Canada)

Starting Small on My First Fixer Upper...

I am just starting out in realestate rehabilitation.

But I did a lot of preparation and planning before I jumped in!

I took ownership of my first fixer upper four days ago.
I've been looking for a suitable property for several months and had made two offers that were not successful. Although it was frustrating to look (and in my opinion, wasted time) for so long, I am quite pleased with how it turned out.
I was able to get a place requiring work that was within my ability range and budget.
As an added feature it is also close to my home.

The house has other attributes going for it...

It is, by far, the saddest looking house in the neighbourhood.
It "has" two bedrooms, one bath and a small eat-in kitchen/laundry room.
It was well built, in 1952, and well cared for until 1988 when it was rented out. Subsiquent landlords have stopped leaks and kept pet problems to a minimum but nothing else.
So, when I took ownership I had a building with good bones and a wornout interior but no rot and no abuse.

Another bit of clever timing on my part is that a current government initiative will cover almost 60% of my materials costs.
I arranged to have an Energy Audit preformed before I took ownership.
The auditor confirmed what I already knew:
very little insulation,
poor windows,
and outrageous air leakage.
When the auditor returns after I've completed the renovations he will approve me for almost $7000 in rebates.

I will add stairs and turn the attic into two bedrooms and a half-bath.
I will also open the "kitchen/laundry" area into a main floor bedroom creating a large kitchen/dining room.
When I'm done the house will be an energy efficient 3bdrm home with 1.5 baths, new windows, doors, siding, heating and 1950's charm.

I got the keys to the house at 1pm.
At 1:05 I was taking down walls...

Before I put in an offer I had a very clear idea of what had to be done.
By the time my offer was accepted I had a detailed critical path.
I knew what had to be done and in what order to be efficient and effective.

I realize this sounds pompous but I am proud of the planning that I've done to make the work run smoothly.

Today, at the end of day four,
these things have been stroked off my list:

1.) Energy Audit and paper work
2.) Windows and doors ordered (3 week delivery)
3.) Basebords and trim
4.) Kitchen cabinets and sink
5.) Front steps salvaged and stored
6.) Construction steps and stairs installed
7.) Two walls removed and reframed where necessary
8.) Floor sag jacked
9.) Attic rafters built out
10.) Knee wall and ceiling installed.

My only concern at the moment is that I think I was a little too hastey in my window selection.
I may have let my love for double hung windows cloud my judgement. I think I should not have ordered them for one window grouping.
My husband says, "get over it, no one else will care."

This is my first investor real estate fixer upper.

What do you think?

Comments for Fixer Upper

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Completed Fixer Upper
by: Anonymous

Hello Marla,

Have you finished your fixer upper project?

I'm eager to know how your progress turned out and if you ran into any problems that will help me with my home remodeling projects.

I'm realizing the real estate investor market is in the buy, hold, and rent stage, but I have to sell the one I just finished to recapture my working capitol.

I've found out that even though I can find cheap homes, my completed fixer upper has to be offered at the current market price and I can still make about $10k to $15k on a property flip.

Are you going to continue to buy fixer uppers in this market and are you going to sell them or rent them?

Thanks

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Thank you
by: Marla

Thank you every one for your encouraging words. I have been SO busy with this project that I haven't had the time or inclination to write about it. I will soon, I'm almost finished.

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You're off to a great start!
by: Debbie Gilliam, Home Staging Expert

I'm impressed Marla! Great start!
I too have rehabbed a home and was tearing down walls the day after I got the keys! I share your enthusiasm, and agree with the others that you are doing everything right. Your proper planning and sticking to a schedule will make all the difference.

Don't get discouraged when problems arise to throw your plans off, because they always do....just blow off the sawdust and keep up the great work. In spite of all of the difficulties you may encounter along the way...the sense of pride you will have when it's finished will have you hooked! Creating win-win situations for others feels pretty darn good too!

About the windows? Guess I'd have to see which windows you're referring to, but likely would agree with your husband and Joe...they are new, so that's a huge plus. Just be sure not to let your husband talk you out of spending just a few extra bucks for nicer features...In most cases, it's women who make the decision when couples buy or rent a home...the man may do the negotiating, but the women are the ones who fall in love with the home and get the ball rolling.

Find an inexpensive Pull Down kitchen spout fixture..they start out pretty affordable..also, spend a few extra bucks for something a little nicer than the standard, 2 pack flush mount ceiling light fixtures everyone throws in...it's another affordable way to make an impact.

Staging the home can really make those additional features shine as well as highlight the home's other great features, and distract from those not so great. It got my rehab sold!

Wishing you all the best...keep us posted!

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Great job
by: Doug Thomas, the RE/MAX agent

You're off to a fantastic start, it takes me years to get some people to the level you're at right out of the gate.
Just keep it up and you'll be able to write your own ticket anywhere.

As for mistakes, you'll make them (we all did.. and still do) just think of them as the cost of your degree in real estate investing. Learn from them, make a decision not to make the same mistake again and move on.

No matter how diligent you are in the planning stage problems or changes will come up, if you approach them with the same consideration you have given the the rest of the project, you'll do well.

Happy Investing and Good returns,

Doug Thomas the RE/MAX agent.

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Real Estate Fixer Upper
by: Joe the Rehabber

It sounds like you're a seasoned professional. You are off to a Fantastic Start!

Many of the investment homes I've purchased were from so-called real estate investors who thought they were going to get rich on buying and selling (or renting) homes, but couldn't.

You have described what it takes to be successful in the real estate fixer upper business.
You're a true "Rehabber!"
Your preparation and planning was impeccable! Great Job!
Your husband is right, the windows are no big thing, the windows are new! What more could anyone ask for?

You didn't waste any time getting started on your project. It almost sounds your fixer upper is nearly fixed up, only waiting for special orders.

You did so many things correctly;
Buying the ugliest house on the block,
Pre-inspections,
Knowing about Government grant programs,
Having a clear and efficient work plan,
and having your husband on board with you.

It sounds like you know more than some seasoned investors I've met over the years trying to do what you are doing, but just haven't figured it out yet.

I've got to ask you Marla, How Did You Learn so much before you even purchased your first real estate fixer upper? I'm sure your visitors would like to know too!

Please let us in on your secret learning methods.

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