Day 14: The week started with another deal. Homeclick.com and Wayfair.com have programs for real estate businesses (as long as you can provide documentation, for example your EIN number that you get when you register your LLC) to score major deals. Wayfair has significantly lower pricing for a business account than for the normal consumer. Homeclick not only has lower pricing, but it also provides a $50 discount and $100 coupon for taking a few additional steps when you register for your business account. So, how much did we save? We purchased a glass surround and base for the master bath shower, and with the two discounts and the business pricing we saved almost $250!! With respect to the house, the floor guys finished today. They only have to put on one more coat of polyurethane when everything else is finished with the house. As the floors were being finished, and PM was not able to be in the house, he made a few trips to HomeDepot to finish getting the tile for the baths. In the afternoon, he was supposed to meet with a roofer, who not only was a no show, but never called. This roofer is someone who was “highly recommended” from one of the forums for which I am a member. He has said on multiple occasions he was going to come out to the house. Just another lesson, that not all “highly recommended” people are good. Bad news is we now have to find another roofer.
Day 15: Checked in with PM today on his thoughts for achieving the deadline of February 29 (with first showing March 6) and we should be good! We also have been going back and forth about a stager. Our budget is pretty tight on this house, and the rooms are pretty well defined and it is easy to imagine furniture layout. What do you think? (Reminder: our selling price point is mid-high 400's). The price range we have received for staging is $3,500-4,500, and then approximately $600-$700 per month holding. Back to the house happenings. We selected the paint color; walls are Accessible Beige and the trim is Marshmallow (both by Sherwin Williams). PM finished removing all of the old cabinets. I listed the cabinets for sale on Craigslist with a disclaimer that they need to be gone by Friday (as we are running out of storage space). Another way to get some money back:) We also have a double wall oven and a stove top we are selling. PM went around the house and checked and nailed down all of the quarter round (which will be painted with the trim). He then met with the Electrician. You might be saying to yourself, wait what is this about an electrician??? Initially, we did not think we would need an electrician, but with some added changes (for example the full renovation of the kitchen) the laundry list of electrical updates needed grew. Finally, the appliances came today. Interesting story about the appliances. PM had to drive his truck down the driveway, and load the appliances on the back of his truck as the delivery truck could not get up the driveway. He then had to unload them again into the house. Thank goodness PM was there at the time of delivery!
Day 16: The Electrician came today to give a bid, and it was ridiculously high! This is the same Electrician who did our last flip, so we were shocked with the price. We prioritized the items we needed him to fix, and PM is going to cover the simple changing of fixtures. The painters continued and are doing a very good job. One challenging point for PM is the language barrier. While I speak Spanish, PM does not. With me not being able to be at the job, and no English speaking painter (as the boss of the painters is at another job), communication is proving to be difficult. I have yet to mention that every few days I do a budget check-in to see where we are. We are currently almost $6,000 over our renovation budget. A few things to note about this: 1) We originally had a reno budget that was $10,000 over what would make the numbers work, and were sure we could make concessions to bring the budget down, 2) We did not know they would take the refrigerator, the stove was not in good condition, we would need to replace all of the kitchen cabinets, and a few other minor fixes, and 3) we still have some areas where we can hopefully find savings. Lastly, I scheduled the open house for March 6th!
Day 17: Lets start today with the challenges we faced. First, one of the shelves in the garage broke. It was holding the tile, grout, and thin-set. Fortunately for us, the tile did not break. While speaking with PM about the backsplash, specifically the quantity needed, he realized he ordered the wrong size cabinet for one of the cabinets. However, the bright side is the correct cabinet will be ready tomorrow morning, but he needs to go to New Jersey to get it. Why is this good news? The granite template cannot occur without all of the cabinets installed, and as the new cabinet will be ready tomorrow the granite template can still occur according to schedule. This really has been an ongoing challenge, but we continue to struggle to find a roofer. We only have a few minor fixes that need to be completed, but we can not seem to find someone. I made about five calls to roofers yesterday, and I hoping at least one can work with us. I mentioned earlier that we looked for kitchen backsplash. I sent PM seven options I found. I also ordered three mini pendant lights for over the kitchen island. PM scheduled a HVAC tune-up for next week. The tile guys began tiling the main bath and laying out the master. And the painter continued to paint. Considering we have some nice weather coming up, PM called the painters' boss and confirmed they will be working outside on those days to get everything outside completed on time. Keep in mind this is Pennsylvania in February!
Day 18: “Call me asap”. Three words I never like to see when reading a text from PM. A million different ideas of what “Call me asap” could mean, from family related (remember PM is my Father) to house related. When I finally hear it is house related, I am relieved. I am sure this infuriates PM a little bit, as he is still concerned, but I am just happy it has nothing to do with my family. I mentioned yesterday that he was going today to the cabinet warehouse to pick up the one cabinet he ordered in the wrong size. When he got there, they gave him a box that said “White Shaker”. PM brings it to their attention that we did not order white shaker, and they happily exchange it. PM then followed-up with the original sales person to confirm that all of the other cabinets were the correct style. Guess what? They were not correct. A few hours later the company called to confirm the delivery for Monday afternoon (three day delay). As a result, this will hold up the granite by a few days, but we should still be ok for scheduling.
Day 19: More tiling and more painting today. PM did some work to prep for some of the subs. Still on the hunt for a roofer. And our Realtor went around the entire neighborhood and handed out our referral flyer. Our referral flyer includes a bonus for anyone who refers someone who ends up purchasing the home, and it also includes information about the Open House. Our Realtor also posted the “Coming Soon” sign. We hope this will build awareness of the upcoming listing.
Day 20: Today the weather was really nice, so the painters moved outside and began to power wash the exterior. PM laid the tile design out in the Master Bathroom. It looks very nice and should be memorable. We are in the final push! Keep your fingers crossed that in two weeks we will be receiving an offer!
Day 7: I hope this entry is not the tone of this week. Late last night we received an email from our floor sub. Despite the fact that they signed our Independent Contractor Agreement (ICA) earlier in the week, cashed their first milestone check, and worked all week, they said they were offended by the ICA, and were very concerned that they were not going to be paid due to the ICA's language. Note: the ICA template we used is the one provided by Bigger Pockets; thus, there is nothing crazy about it...in fact, we even removed the delay in work/penalty section! We wrote an email back trying to resolve the situation via email, however, the situation was not resolved. Therefore, Monday saw no floor action. PM finally reached the company, and was able to talk them off the ledge. The owner is coming to the property tomorrow to go over his concerns. Just one small note: we pay a four milestone payment schedule (30-30-30-10). His payment plan had three 33% payments. He was going to complete 90% of the work this week, and just apply one last coat of polyurethane two weeks later. Thus, if we went with his payment plan, he would not get 33% of the total until he applied that last coat. With our contract, he would have 90% prior to that last coat. Once PM politely pointed that out, I think he was more willing to work towards a resolution!
Day 8: I fear this week is not getting better. Our floor guy who was supposed to meet with us, was unable to due to a family emergency. Thus, the floor guys are now scheduled for tomorrow. PM and I decided to focus on a few other import topics that are pending, most importantly the kitchen. We are now debating whether, or not to just replace all of the cabinets. Here's our reasoning: 1) the replacement matching cabinets are proving difficult to locate, 2) the cost associated with replacing and then staining are inching near the price of replacements, and 3) some of the cabinets are not in the greatest shape. The two risks with replacements are the same as all reno decisions: cost and timeline. PM is researching these two risks across a few companies, and we hope to make the decision promptly. We both agreed the lesson learned is to assess the situation, and make a decision sooner.
Day 9: PM is getting us back on track! PM met with our floor guy today, and went over the contract. When the floor guy first arrived he said to PM, “We are not using this contract. I have spoken to several other contractors, and they told me I should not have signed this.” PM then said, “I totally understand. You and I are cut from the same cloth. We have been in this business for years, and we go off a handshake. I was put off by this contract too, at first, but after reading through it, it really just covers the basics. Lets go through it line-by-line, and see where there are issues.” They then proceeded to go through the contract and only one issue was noted. Together they decided to waive the one clause for this contract only; however, in the future PM noted this will be standard in the contract. The one issue was if they do not hold up to their end of the deal they are liable for up to $2,000. Why did we waive the issue: 1) they already were doing a good job prior to this point, and thus we assumed our risk to be low, and 2) the time and cost of finding a replacement, and potential project delay would be far greater than making this concession. This situation further demonstrated the necessity to provide this general agreement to the sub when they came to do their estimate. The crew started on the floors again, and agreed to continue late into the night, to have the overall project done by Sunday evening (possibly Monday morning). Note: the original finish date was Sunday evening, so the paint guys can start Monday morning. Next topic: Kitchen. I am sure you are as over me talking about the kitchen as I am writing about it! PM and I made a decision that we are definitely replacing the cabinets. Now it comes down to pricing. PM went to one place yesterday and was able to get a quote (a bit high, but a starting point). While he was there he asked if there were any good appliance places, and got a GREAT recommendation. He originally was scheduled to go to another cabinet place, but since he was close to the appliance store he headed there. Our total budget for a refrigerator, 5-burner gas stove and microwave was $2,500. (I know I have yet to talk numbers, but our selling price is set in the mid-high 4's....I will give all numbers in my last posting, once we sell the house). We both felt $2,500 was going to be tight to find the level appliances we were looking for this type of house, but we welcomed the challenge. Well, PM just killed it! Total cost: $1615 (including delivery)! How did we get that? As I am sure most of you know, appliances are best to purchase January through beginning of February, there were rebates on this package, Delaware (store location) is tax free, and we got a 2% discount for paying with a check!!! Score! Now we can use the extra money we saved towards the cabinets! Of course the money saved will not cover the overage in cabinets, but every penny counts!
Day 10: PM continues to score the deals!!! He negotiated the cabinets down to $5600 (fully assembled, including delivery)! We just need to figure out the granite, and then the kitchen is set! PM is going to one more place tomorrow to look at a few options, and then we will make our decision. The floor guys continued today, and were able to put on a darker stain.
Day 11: I feel like you are going to stop believing me, but I should just refer to PM now as “The Negotiator”. The Negotiator went to the one granite place today, and looked at a bunch of options. There were two options that stood out to me and The Negotiator. One was a really nice Level 1 and the other a Level 5. Both were on sale, but the Level 5 was obviously more expensive. Never fear, though, as the Negotiator is here. The Negotiator negotiated a $2500 all-inclusive deal with an upgraded double-sink for 60 square feet of the Level 5. If you have yet to shop for granite, let me put this in perspective. The most common deal in our area across all granite stores is the following: Level 1 granite, 50 square feet, standard sink (select from 3 options), at $1999, and each additional square foot is at the regular price, which is typically $35-$45 per square foot. And, for each Level you go up, the price per square foot increases between $5-$10 per square foot. Pretty unreal!
Day 12: PM went to the granite store first thing this morning to give a deposit for the granite and then headed to the house. The floor guys were there putting the stain on the floor and it looks fantastic. He confirmed today that the floors will not be finished until Monday, so the paint guys and the tile guys will be held off by one day for the floor guys to finish. Administratively, I finalized updates to a referral document that we create for all of our houses. Specifically, it is a flyer that we distribute to all of the neighbors alerting them of the upcoming listing. It also offers a $500 referral for anyone who refers someone to the house that provides an accepted offer. Note: for this house, we have holding cost of over $2000/month. Any possible way we can get a quick sale is welcomed! We also had our Real Estate Agent post the Coming Soon sign today. Since Home Depot changed their rewards, I started looking into alternative credit cards. I discovered that Bank of America Business credit card gives 1% off all purchases (also 2% off restaurants and 3% off gas). Comparatively, this is a greater savings than both Lowes and Home Depot cards. Upon discovery, I emailed my Bank of America contact to get more information.
Day 13: The final post this week is a bit off topic, but is relevant to anyone who is interested in flipping, and is trying to do everything by themselves. The last flip we did, PM did a lot of the work while simultaneously managing the project. Despite how hard he tried, it was (in both of our opinions) too much for just one person to handle. Keep in mind, this is someone with over 40 years of experience, and multiple contacts right out of the starting gate. For this project, we took a completely different approach. We tried to sub out almost everything. Why am I bringing this up? I can already tell you in less than two weeks, both PM and I have already had several conversations that we are not going back to the previous way. It is more efficient for us to streamline the process with PM at the helm. This process allows for a true Project Manager to emerge, phone calls to be made, scheduling to be kept, budgets to be tracked, and liability to be kept at a minimum.
Day 0: Whhhhhoooo closing went well! We received confirmation the previous homeowner took the two large items that were present during the walk-through. So we officially have a blank slate to start this project. And without further ado, here is a picture of the house:
Doesn't look like your average flip does it? We were having problems with finding the “perfect” flip, and for several months we kept missing out on the house by being outbid, late to discover the house, or just not even aware the house was available. We decided to take a new approach. We looked for houses that were sitting on the market for a while, appeared to need minimal work, and investigated further why they were not selling. This particular house had an offer when it first hit the market, but then when the septic failed, the house was listed back on the market with a significant price reduction. As it was not being marketed to investors, and instead to primary residents, we believed it to be a perfect house for us. Why? Because most people who purchase a home at this price point need a mortgage, and most lenders will not lend on a failed septic. But that is not even the best part of this story! When we learned of this, we submitted an offer far below asking. Despite going back and forth with the homeowner, we could not reach an agreement. The house then sat for another month on the market. We asked our Real Estate Agent to touch base with the homeowner's Real Estate Agent again, and we learned the homeowner might come down in price. So we started negotiations again. During the negotiations, we found out the homeowner had the septic issues fixed, and it now PASSES!!! This was fantastic news to us, and allowed us to come up in our price (as we no longer needed to factor in the septic repair into our renovation) showing the homeowner that we were being flexible too. Here is now the best part; they never updated the listing to reflect the fixed septic issues. Thus, no one knew they now could get a mortgage on the house! There was only one other person who put in an offer, and with our ability to close quickly we were able to secure the house! A few more updates before I close out this entry... First, PM went to two granite places and looked at the options for the Kitchen Countertops. Second, I customized the Independent Contractor's Agreement (ICA) and Sub Check-list for our first Sub, who is coming tomorrow to start demo. I also created a Payment Tracker document to track all Subs payments in one location, so we don't have to keep referring back to the ICA for amounts and conditions of payment. And I finished setting up all utilities, including insurance. The only two items left is getting another fill-up of propane for the tank, and we are going to hook up internet at the house. PM and I do almost all of our calls via FaceTime (so I can see what is going on), and cell reception is terrible at the house, so the internet hook-up is a must!
Day 1: Demo started early this morning! The only thing left to demo is to pull the carpet up in the basement. However, we had a little hick-up with the dumpster. The dumpster was supposed to arrive at 9:00am, but didn't arrive until 1:30pm. Further when it did arrive, I ordered the wrong size. I ordered a 40 yard, which wouldn't be that bad (considering it is always better to order bigger), but the sides were over 8ft tall! Which would have been very time consuming to actually put the trash in the dumpster! They took it back ,and replaced it with a 30 yard. While this hick-up caused a delay of the trash actually getting in the dumpster, the good news is we saved $100 by getting the smaller size....you have to keep looking for the positive in this business! PM and I had a few calls during the day. During the calls we confirmed the granite for the kitchen, however we still are working out the configuration of the kitchen. It needs to be decided shortly, as several tasks are depending on the configuration. The priority now is getting the flooring for the bathrooms. In order to do that we have to pick out the vanities, as it all needs to tie-in together. Did I mention how much I hate, wait scratch that, loath vanities!?!?!? Someone needs to come to come up with a store that just sells vanities. It would have mix and match bases and mix and match tops, with 20 color options for both, and different style handles. It could be made while you wait, or shipped the same day for free. The store would also sell the complimentary flooring, and have pictures of your combination with the different floor options. This way color matching between vanities, and flooring is not such a risk. And whoever is reading this thinking this is a great business idea, would forever give me 50% off instead of a royalty fee.
Day 2: Floor guys came today. They started sanding all of the engineered hardwood to prep for the refinishing. PM and I spoke again about the kitchen and master bath configuration/finishes. For the kitchen, the configuration is the concern. The current configuration has a 27” wall oven-microwave combination in black. All of the other appliances are stainless and the ARV cliental will expect stainless. Here's the problem. Wall oven-microwave in stainless are expensive (about $2,000 to start). While a standalone is way less, they are not made with a 27” width (they start at 30”). Solution, we had to reconfigure the cabinets to find the room for the standalone to fit. The new problem this creates is finding new cabinets that match the existing cabinets, and are available quickly (in order for the doors to be stained by the painters). Sounds like a headache for PM to worry about! Today we also ordered the main bath vanity, however we are waiting on getting the flooring, as the main bath vanity is featured at a few different stores and the color varies slightly. As we want the floor to compliment the vanity, we want to be 100% certain of the vanity color prior to installing the bathroom floor. We can decide later as the vanity is scheduled to arrive by mid-February. Just one more reason why having the mix-and-match vanity store would be such a great idea! (Read yesterday's post if you don't know what I am talking about).
Day 3: We decided at the beginning of this project, the target audience for this house is my Mom (PM's wife). Which makes sense as this house looks exactly like my parents' house. We decided to leverage this by seeking my Mom's approval for each design element. Which brings us to the master bath. While I hate vanities, I am sure PM hates master baths. In the past 24 hours, I have changed the design three, wait, four times! In fact last call he said, “I don't care what we do, just pick something!” Here is where my uncertainty began: I had an idea for an expresso and cream colored bathroom and showed it to my Mom. And she said, “It is not what I would have picked, but if I walked in and saw it I would like it”. With that small comment, I started coming up with alternatives. I sent a few options to PM, and while PM and my Mom were having breakfast this morning, they ranked the ideas with the original idea at number one. With that confirmation, I ordered the master bath vanity. Sooooo, hold on to your hats, we are going with the brown and cream option! I am still a little nervous about this, but I know it will be more unique than the Calcutta, grey and white bathroom that everyone is doing right now (not ripping on it as we did it on our last house). PM investigated the kitchen a bit further, and discovered there is a gas line already in for the new oven location! When PM told me this, I said, “This is a good thing, right?” and he replied, “If you like saving money!” And that right there folks is why we get along so well! PM also has the cabinet figuration sorted out, and made a call to a cabinet maker to identify where they can be made. PM also called the company who made the shower fixtures in the master bath. I forgot to mention this previously, however, instead of replacing the entire faucets, we are just switching out the exterior parts. Not only will this take less time to complete, but it will save money while giving an updated look to both the shower and the tub. While things seem to be going very well, there was a bit of bad news concerning scheduling. When we originally spoke to the floor guys, they confirmed that we could work in parallel while the floors were being done. Apparently that translated to only two days (while they were sanding). Tomorrow they start staining, and they don't want anyone in the house until mid-week next week! Fortunately, we have the time, but lesson learned we really should have gone day-by-day with them to confirm which days we could and could not be in the house. This is not welcome news, as we just purchased all of the tiling supplies for the tile guys to get started tomorrow on the tiling, which will now be postponed until next week. Fortunately, they completed all of the sheetrock today in the main bath, and some in the master.
Day 4: With the floor guys needing the house to themselves, PM and I had a long call this morning to work out a few more design elements. To start, my Mom actually found a chandelier she liked for the interior which I was able to find for almost $90 cheaper online. (I am starting to think I should write an article on how to save money when flipping, or renting...I am like the crazy coupon lady of house flipping!) The granite company wants the appliances in prior to taking their measurements (which was not the case with the last granite company we worked with; PM is going to call to verify that is truly a necessary step). PM and I also looked at appliances online, and he was going to go look at a few appliances later in the day. After our call, and PM running a few errands for the house, he went to the house and checked on the floor guys. Here is a picture of the floor stain; it is the darkest we can go. While I am a bit skeptical about the color, I think once the whole house is completed and the floor has polyurethane on it, it will look good.
Day 5: I am starting to think my Mom should be on payroll for this house! Today my Mom went to a granite store, and found a granite option for $500 less than what we originally selected. The color is a bit different than the one we initially chose. Before making a final decision, PM is going to put the two granite options next to the color of the cabinets, wall color, and backsplash. PM also spoke again to the cabinet company, and while they do not make the cabinets we need, they believe they know who does. PM has to call back on Monday to get more information. PM and my Mom also went to check on the house today. It appears the floor guys did not show up! PM called the floor contact multiple times, but did not get a call back. On Monday he is going to have a conversation with the floor company, and explain if people are not coming on certain days, he needs to bring other guys in to keep the house moving. While at the house, he tested a sample for the stair railing, and applied a second coat of stain on the floors on a hidden area. The floors look better with a second coat. We are going to ask about the cost/time of applying a second coat of stain and make a determination.
Day 6: Shameless plug...I launched our website www.HouseItLook.com! I have been working on this behind the scenes, but it is officially launched! Other than that, day of rest to be ready to continue the momentum tomorrow morning:)