Flipping Your Own House

Since starting this blog, I’ve gotten a goodly number of emails and comments looking to get into the house flipping game themselves, many asking for advice as far as where to start to get their feet wet.

It’s a scary, capital-intensive game to leap into, especially in uncertain economic times when the housing market is struggling throughout much of the country. If you’re just getting started, I have to say the best advice these days is to, umm, not leap just yet, as far as buying a property to flip. Unless it’s a screaming good deal and you have confidence in your budgeting and estimating abilities, tackling a first-time house flip right now is a pretty dicey, dangerous endeavor.

That’s the bad news. The good news is that conditions always change, markets always correct, and within the next five years house flipping will once again be a viable, profitable endeavor in many parts of the US. The even better news is that there are definitely things you can be doing now (instead of twiddling your thumbs) to put yourself in position to take a crack at flipping homes in the not-too-distant future, with a better-than-average chance of success.

Instead of dreaming of a big score one day from flipping properties, look around at your own house (or, if you rent, houses of family and friends). Odds are great that there’s plenty to keep you busy for years around your own house, whether it’s painting the living room, finally renovating that guest bathroom with the hideous wallpaper, or redoing the tile backsplash in the kitchen. Not only will these improvements increase the value of your home when you sell it, but they provide a great opportunity to learn some new home renovation skills yourself, in the comfort of your home, with no crushing costly deadlines looming over your head.

I’ve been busy the last few months working on our own house, in lieu of tackling another flip project, but in my head they’re pretty much the same thing, as the principle is the same. Since we live in the house, though, a lot of the risk is removed, as we’ve got no deadline to sell and aren’t spending x money on repair costs that must be recouped by y date.

The one piece of advice that I find myself giving people, over and over, is to learn to tackle certain home renovations yourself. You can’t (and shouldn’t) try to do everything, as it’s definitely a slippery slope with some jobs as to whether you save money, but doing some jobs yourself is crucial if you realistically want to make money flipping homes.

If it takes you ten hours to install shower fixtures that a plumber would charge you $75 to install, you really didn’t “save” $75, unless you believe your time is worth substantially less than $7.50/hour. If you’d normally make $20/hour from whatever work you do, it can be argued that you actually cost yourself $125 by installing the fixtures yourself. (This is a dumb example as it should never take you ten hours to complete that hob and everyone knows the plumber would overcharge you tremendously and it’s really be $81,816 for a simple job like that, if he ever bothers to show up, but hopefully you get my drift.)

But it definitely pays to pick your battles and selectively do some of the work yourself. These will be different for everyone, as far as what you’re good at and/or enjoy, but my personal big three are: painting, tile, and refinishing hardwood floors.

Of the three, painting is the easiest, and the one that most people have experience with. It’s probably the least profitable of the three, as hiring someone to paint your home is relatively inexpensive so there’s not a huge net gain from doing the work yourself, but it’s simple to do, requires no expensive tools, and can be done in pieces without hugely disturbing everyday life in your house.

As far as flip properties, painting can be a huge way to add value to the house, and put extra profits in your pocket. Most people just aren’t that imaginative and properties in need of a new paint job suffer for it, allowing you to purchase at a discount that’s often much deeper than the actual cost to paint the house with attractive, flattering colors.

Learning to do tilework is harder (and pretty much requires the purchase of a tile saw, as rental fees will pile up and often force you into working too fast and doing crappier, sloppy work), but it also produces more profits, and is a necessity in many, many flips. Installing tile does take some patience and it’s labor-intensive, but it’s not particularly hard work. You just have to be willing to take your time, plan things out, and keep plugging at it.

Much of the cost of having tile installed professionally is the labor, so tackling tiling yourself can be a pretty substantial cost-savings, especially if you’re talking about a lot of square footage. Depending on the type of tile you’re working with, it can also be forgiving for the newbie learning the ropes. If you’re tiling a back patio with 12 x 12 slate tile, you’ve got some wriggle room to learn as you go, as natural stone is slightly uneven by nature so your grout lines don’t have to be razor-perfect. If you’re installing 4×4 porcelain tiles for a tub surround, that’s a little trickier for the beginner, as any unevenness is much more noticeable and you have to be careful when spacing to avoid goofy looking 1 inch pieces being cut in corners, etc.

Refinishing hardwood floors is the most labor-intensive of the three, and is the sort of thing I simultaneously wince about even when I suggest people learn to tackle it themselves. It’s just not much fun, can be back-breaking at times, and takes a long time, with many annoying steps that you have to repeat over and over and over. Then, when you’re finally done sanding, you get to repeat the repetitive process once more, this time with stain and topcoats.

Not fun, any of it. But compared to paying professionals $3-$4 per sq. ft., it can really save you money, and it’s not difficult work, just repetitive, dusty, and exhausting. When done, it’s also pretty satisfying, as far as talking some pride in the transformation and final product. Keep in mind, though, that it pretty much brings everything to a halt in the house, so this one is tricky to schedule as far as a DIY project at home.

If I had to pick one of the three, as far as a great skill to have if you someday want to flip houses, I’d probably say learn to install tile. Pretty much any house can be dramatically improved by upgrading existing tile or adding new tile, and it’ll cost you a pretty penny if you’re always hiring the tilework out.

As far as some proof to back up all of the above babbling words, here’s some before and after photos of our house and some of the work I’ve tackled the last few months, that revolves around the above ideas.

That’s the living room of our house when we bought it, with the den to the left and a bedroom to the right.

Same living room, but with a new paint job, refinished floors, and slate tile in the niche that previously just had flimsy glass shelves.

The fireplace in the den, in all its red-brick glory.

Same fireplace, but re-faced with slate tile. (Ignore the clutter, fugly rug, red-eared slider turtle tank, and Halloween decorations.)

Entryway of the house when we bought it, with divider shown separating the living room and dining room.

Same area, but with refinished floors and paint.

Guest bath, with lovely wallpaper at top and plain white tile.

Guest bath before.

Guest bath before.

Gues bath after adding travertine tile on floor and tub surround, a new coat of paint, trim around the mirror, and a new vanity and sink.

If I’d hired all of the above work out (as far as painting, tile, and refinishing floors), the total cost would likely have been around $6,000-$7,500 or so. My cost for materials for those same jobs (not counting the costs for the bath vanity, sink, faucet, etc.) was about $1,250, so it’s a pretty dramatic way to save some cash if you have the time and inclination to tackle projects yourself.