Flip Thy House

The Rumors of My Death are Greatly Exaggerated

It’s a bit strange to be posting a long-overdue update on house renovation projects in Texas from Las Vegas, but hey, there you go.

I’m here in Vegas from June 30th to July 15th, working my annual freelance gig updating the bwin poker blog for the fine folks at bwin. It’s the third year I’ve been out here for the Main Event working for them as a blogger-type for what’s a pretty sweet gig (especially since I play a lot of poker myself), as we’re staying at the Palazzo this year, so the accommodations are, umm, pretty nice.

My only mixed feelings are that I had to leave the Creek House about a week or so from being finished, and the last few weeks on that project have been pretty hellish. I’ve been killing myself the last few weeks trying to finish it up before I had to leave, and, despite all efforts, it just didn’t get done. Pretty frustrated with my contractor at the moment, as he started strong on this project but just completely dropped the ball the last month or so. I’d go into all the gory details, but, for the next few weeks, I’m just going to let that stuff go and enjoy myself in Vegas, as there’s not a damn thing I can do about it and I did everything I humanly could (plus some) the last 3 weeks or so to wrap that project up.

Even with the delays and being way over budget, I am pretty happy with how the Creek House has turned out. A potential huge profit has dwindled to a potential big profit to a potential decent profit, but I’m pretty confident that it’ll move quickly when it’s finally listed, as it really is head and shoulders above comparable stuff on the market, and I at least bought right when picking it up, so I’ll still likely make some money when it’s all said and done.

But yeah, major changes in the future if I continue to work with our contractor, as this current project went way over the line as far as what I can accept and deal with as part of doing business with small town contractors. I’ll bend over backwards more than your average monkey in an attempt to keep things friendly and smooth, but even I’ve got a breaking point.

In Which He Babbles about 926 Different Things

In theory, we’ll hopefully get all of the rough plumbing and electrical passed this afternoon at the Creek house, so that we can finally get rolling on sheetrock and paint. More than a little displeased at the delay, as I was hoping to get everything finished and passed last Friday, but such is life sometimes.

Although it is giving me a little devious pleasure, as the delay is about to cause the plumber’s head to explode. I’m happy enough with the work the plumber and his son have done, but his general behavior has managed to rub me the wrong way, and our contractor is pretty fed up with it as well. Nothing huge or major, but the plumber pitched a hissy fit when he started the job (three days late, mind you, when he swore he’d be there three days earlier), as far as showing up, interrupting our contractor when he was talking to another sub to demand his check (1/3rd of the total cost of his bid to get started), then made a huge production out of stomping off and leaving when the check wasn’t immediately there waiting for him.

And he’s pulling more of the same dramatic entrances and exits the last few days as the electricians finish up, as he doesn’t get his second draw until the rough inspection is done, so he’s stopping by the house 5 or 6 times a day, loudly talking about how broke he is, how he’d wish these damn electricians would hurry up so he can get paid, etc.

I try to let it amuse me more than annoy me, as it is kind of humorous to see a fifty year old man act like a five year old. Especially when he works in a trade where less scrupulous people than myself routinely drag out paying people like him for weeks and/or months at a time. Not that I’m unsympathetic to that, as I am, but until I personally do him dirty on a job, well, you know, please to be shutting the hell up and stop pissing off the people on the job trying to get things finished up.

We just got back the county property appraisals for 2009 for all our properties and it was good news, across the board. I’d been sweating it a little as our county appraisal district is apparently under pressure from the state to jack up property values across the board, after it was deemed that our county was well below par. But any worry was for naught, as our primary residence was the only one that showed any real increase in value, with two of the investment properties exactly the same as 2008, and the Wee House went up a whopping $100, to go from an appraised value of $4,500 to $4,600.

I must be failing mightily at this REI thing, purchasing and renovating a house at a cost of ~$32,000 that is appraised by the county at just $4,600. :) I’m obviously not complaining, but it does kind of baffle me as to why they bother at all, as they don’t seem to ever actually visit the properties, flag ones that have had building permits submitted, or anything like that.

In other completely random news, my wife quit her job about a month ago, so we’ve been experiencing the joys of being a single income household for the last month or so. It’s a temporary thing, as she was sick of her job and had been taking certification classes to become a teacher (and is looking for part time/full time work in the meantime as well until she’s actually teaching), but it’s actually been good as far as giving us a nudge in other areas.

It wasn’t great timing as far as the money I’m sinking into the renovation of the Creek house, so I finally got my butt in gear as far as cutting some expenses that needed cutting, the biggest of which has been cooking meals at home and taking my lunch to work. It’s pretty amazing, really, as far as how much money we’ve been saving by not both stopping for breakfast tacos on the way to work, both eating out at lunch, eating out/fast food for dinner, rinse and repeat, over and over and over. Not to mention that we’ve been eating infinitely more healthy, as I tend to cook pretty simple meals heavy on the chicken and steamed vegetables, pasta, etc.

In a backwards way, it’s actually encouraging as far as giving the REI thing a shot as my full-time job in the not-too-distant future, as it hasn’t been too painful getting by on just one traditional salary, so hopefully once my wife is gainfully employed again I can get more serious about ditching the day job.

I gave into curiosity last week and bought one of these, which arrived yesterday:

I’d read about the resurgence of manual push reel mowers somewhere or other online, with devotees claiming that the newer models did a great job, but I definitely had my doubts. The model I got is a Scott’s 20″ reel mower, which I found for $120 (shipping included) on ebay, and I have to admit I was pretty dang impressed. The thing only weighs about 30 pounds and takes all of ten minutes to assemble (just bolting the handle together) and you’re ready to roll. It won’t cut super close so if you’re into the immaculate ultra-short putting green look you’ll be disappointed, but I was suprisingly pleased with how close and evenly it cut, without a ton of pushing effort. I don’t know that I’ll use it regularly on our pretty huge yard, but the portability factor of it is pretty awesome, and I can definitely see myself using it to keep the front yard of an investment property nice and tidy.

“Hey, Look, He’s Still Alive”

Apologies for being a bad house flipping blogger of late, as it’s been the usual deadly (to blogging) combination of being very busy and not having a lot in the way of “sexy” updates or photos to share from the current renovation project at the Creek House.

We’re about 2/3rds of the way done with the Creek House, with most of the heavy lifting done, shifting into sheetrock/paint/tile mode. I’m hoping to be done by June 5th, which will take a little hustle but is still very much doable.

The budget is still on track, and it’s looking like we’ll come in at about $45,000 for the entire renovation. I was initially hoping to keep it at just under $40,000, but the plumbing gods had different things in mind. We eventually got a bid of $5,400 for the HVAC installation that we went with (which was close enough to the $5,000 I budgeted for that), but the best plumbing bid we got was for $4,400, way off the $2,000-$2,500 I was hoping for. (And that one turned into closer to $5,000 when they discovered that the waste line tying into the city sewer had to be completely replaced and re-routed, with two new cleanouts added.)

Overall, though, this job has been clicking right along, and I’ve been much happier with our contractor on this job, as he’s hired on some more guys and we’ve been able to do better with scheduling both work and materials arriving, so we haven’t had as many wasted days as on the last project.

Recent sales activity and comps are also pretty encouraging. The market is far from going gangbusters, but what is moving most are 3-2s in the $115,000-$130,000 range, and those are almost all generic, boring starter homes, 1200-1300 sq. ft., builders-grade fixtures, smallish lots, cookie-cutter construction, etc. The Creek House will come in at 3-2, 1,600 sq. ft. on a half acre lot, and pretty much blow everything else away as far as upgrades (12 foot ceilings, backyard deck, French doors, and all that good stuff) and should be a quick, easy sell at $129,500. I’ll be at around $85,000 as far as total invested in the property, so anything in the mid 120s would make me pretty happy.

I’m heading out to Vegas for another poker freelance gig from June 30th-July 15th, so I’m not sure what immediate REI plans are going to be, once we finish up the Creek House. Unless something too juicy to pass up falls into my lap, I may take a break after the Creek House, and knock out some more work on our personal home, as well as prepping Larry’s House for renovation in August/September, when the redemption period expires.

Insanely High Sub Contractor Bids: Part Deaux

All in all, things are pretty much on track at the Creek house, as we’re finishing up the last of the framing, finishing the first exterior coat of paint, and nearly done with roughing in all the new electrical. The framing is dragging out a bit, as I’d hoped to be done with it by last Friday, but we made a few layout changes, so I’m not too bummed that we’re a bit behind there.

We’ve been getting more plumbing and HVAC bids, and I had to share the plumbing bid we just received. We’d hoped to use the plumber from the last job but his bid (all the plumbing bids are labor only as I’m supply all the fixtures and materials) was for $2,800, and I was pretty sure we could get it done for at least $2,000, maybe even slightly less, so we’ve been getting more bids.

To briefly outline the situation, the existing plumbing was upgraded 2 years ago, as far as all the plumbing in the existing bathroom, connections to the hot water heater, and the waste lines from the kitchen and bath, all the way to the street. All that stuff is good to go, inspected, signed off on, done and done.

We’re adding a master bath (toilet, double vanity, walk-in shower, Jacuzzi tub), and the plumber will need to run supply lines to the existing kitchen sink (the previous owners didn’t get that far, for some reason, as that sink is plumbed only for the waste line), add lines for a dishwasher, and add the necessary connections for a washer/dryer.

One important thing to note is that due to the layout of the house, all the plumbing work is highly concentrated. The existing bath and new master bath we’re adding share a common wall, and both share a common wall with the water heater and where the new washer/dryer will go. Except for supply lines for the kitchen sink, all of the plumbing work required is in a highly concentrated area, literally all within a 10′ arc. And there’s also a ton of space both in the attic and under the house (pier and beam foundation with a ton of room), with very easy access on both fronts as far as running vents and lines underneath the house.

So yes, indeed, there’s some plumbing work to be done here. But on the grand scale of plumbing work, this isn’t a ginormous job, and it couldn’t be laid out more conveniently, as far as location and access. For a general yardstick of what work runs around here, I had one of our rental houses (3-1, 1300 sq. ft.) completely re-plumbed (replacing galvanized with PVC/CPVC) for $1,900, and had a flip property (4-2, 2000 sq. ft.) 75% re-plumbed (with a new bathroom addition on a concrete foundation that had to be cut/jackhammered out) for $4,500.

So what was the bid (labor only) that I just got back for the Creek house?

$11,100.

I nearly spit out my coffee when our contractor called to tell me that. I mean, it’s more amusing than anything, and I always love a chance to vent and spleen about plumbers, but geez. I am most definitely in the wrong line of work it seems.

I guess I find it interesting more than anything, both from a business and psychological perspective. I just wonder what goes through someone’s head when they give a bid like that, one that’s easily 4x-5x what it should cost. Especially when you’re talking to general contractor who has clearly told you that it’s for a flip, that the owner didn’t just fall off a turnip truck, etc.

I’d normally chalk it up to a sub who wasn’t really interested in the job and just threw out a huge number, but this guy apparently really wanted the work, as he has called back twice already to see when he can start, mentioned that he had a crew ready to jump on it immediately, etc.

Does it work out for him in the end, even if only 1 out of 20 people are foolish enough to agree to a bid like that? Maybe so, but that just strikes me as such an odd way of doing business, as far as the majority of people breaking out into giggles and shooing you out of the room when they get your bid, with your bills being paid by the select few that simply don’t know enough to laugh in your face.

Oh Insanely High Subcontractor Bids, How I Love Thee!

Things are rolling along at the Creek House, and we’re done with all the foundation leveling and major demo work, and started in on the framing and exterior painting yesterday.

No real major surprises so far, and I’m hoping we’ll be done with framing and the rough electrical by Friday, so that we can get that inspection done and out of the way.

While the electrician is rocking and rolling, we still haven’t signed off on the plumbing or HVAC bids yet. The total cost for the electrical was a shade under $6,000, which is a little more than I was shooting for (hoping to get it done for $5,000-$5,500) but reasonable enough, given that we’re ripping out all the existing electrical and completely re-wiring everything, and he’s got to wrestle with some old-school framing (wooden slat walls with lots of horizontal fire-blocking throughout) issues. That bid includes installation of all the outlets, ceiling fans, etc., as well as all the equipment/breakers to upgrade it to 200 amp service.

The plumber who worked on the Wee House have us a bid of $2850 (labor only), which was pretty disappointing, as this really isn’t that big of a job, since the existing plumbing was professionally upgraded and re-done just a few years ago. The new bathroom and laundry room are adjacent to the existing lines, so it’s really just a matter of tapping into it and running the new lines about ten feet, adding vents, etc. He also included $300 for the plumbing permit, which, again, is just sort of abrasively stupid, as that’s the first thing my contractor noticed, and he should definitely know better, as both of us aren’t idiots and know that the plumbing permit for a job this size doesn’t cost anywhere near that. I was hoping to get the labor on the plumbing done for about $1,500, with us tackling a lot of the easy stuff like setting toilers, installing valves and faucets, etc.

Pretty much the same story with the HVAC bid we got, from an installer that’s the son of our electrician. He’d done work for our realtor who was happy enough with him, so I was hoping we’d quickly get that sorted and crossed off the list, using him for the HVAC. Until he came back with a bid of $8,000, that is. We were planning on putting in a decent enough unit (5 ton 14 SEER Goodman heat pump), and the air handler does have to go in the attic and duct work does need to be run, but I as expecting something in the range of $5,500-$6,000. I priced the same exact equipment online from various wholesalers and even with shipping I can pick up all of the equipment new for about $3,000, so he’s basically charging $5,000 for labor (even more if he can get the equipment cheaper, which is possible), which seems pretty damn high for what’s not the biggest house in the world at 1566 sq. ft.

So we’re trying to wrangle more plumbers and HVAC installers over for more bids, and I guess we’ll see if I’m being unrealistic or not.

We’ve also had someone try to break into the house the last few nights, attempting to pry up some windows by the kitchen, and messing around with one of the garage windows. Which is kind of ironic, as I expected trouble of that nature working on the Wee House, in a much crappier, less visible neighborhood, but we didn’t have any problems over there.