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Monthly Archives: March 2017

We Bought Another One

Two people in front of a house.

Carol and our San Antonio friend and possible project manager Frank discuss our newest acquisition.

On Tuesday (28 March), Carol and I drove to San Antonio to do the final walk-through and sign the closing papers on our new acquisition in San Antonio. Our initial exist strategy for this house is to hold it as a rental for a year or two.

Once we see how the neighborhood is changing, we may decide to sell the house, fully renovate it for a higher-end flip, or continue to hold it. As I mentioned the other day, there are tax advantages that can make it much more profitable to hold a property for a year or two before doing a full renovation and resale.

Now you may wonder why we bought a house such a long way away from our usual area. There are a couple of reasons.

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Counter-tops? At Last!

There are certain milestones on a project that give you faith that it may actually end. One of those is when the counter-tops are cut and installed. It had been so long since I saw the surfaces I chose for the Bobcat Lair, that I really didn’t remember them. So, walking into the house earlier this week made me so excited that I had to rush from room to room to see what was in there.

This is some nice granite. Way better in person.

First, though, we had to stop and gasp at the granite on the living area shelves. It’s also the master bath and powder room granite. Wow. I’d forgotten how cool it is. The colors absolutely tie in with the gray, cream and black throughout the first floor, too. You can’t see how shiny it is in the picture, but it really has dimensions! I made a great choice in 2015.

The kitchen, I have to admit, was a concern of mine, because I’d originally intended for the cabinets to be cream and charcoal gray, but we got such a good price on the gray cabinets, that I agreed to change the plan. I just hoped that the counters I’d already paid for would look good with the cabinets.

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Selling a Rental Property with a Tenant

A large tenant-occupied house.

Check out those cars! Tenants can make it difficult to show a house.

Most of the time, we sell our properties when they’re vacant. If at all possible, it’s often better to wait until the tenants vacate the house before listing it. However, that’s not always possible, especially when the plan all along was not to sell it right away after the rehab.

It’s a hassle to pack, find a new home for rent and move. So, what’s in it for the tenants if the home they’re renting is being sold? They sometimes are inclined to put up every road-block to prevent the home from showing. Most lease agreements include a clause addressing this, but that doesn’t make it any easier to enforce. If a tenant has something to gain from the sale of the house, they are more likely to cooperate showing it. Continue reading →

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When NOT to Renovate

I posted on our blog for sellers yesterday, and it seems to have hit a nerve. So many hits! Lots of people enjoyed it on our Facebook page, so I thought I’d share it here, with some added thoughts for our fellow real estate investors.

a ceiling with lights.

Gosh, wouldn’t can lights be a better choice here?

One of our Facebook readers pointed out something that most of us know, but perhaps some of us who are just casual rehabbers or are new to the business haven’t taken seriously enough–and that’s the need to get permits on any structural work you do. (You may recall that’s what delayed out Bobcat project for so long). But it’s so important.

If you do not get permits for the work done on your house, you might have a lot of trouble when time comes to sell. An inspector can take note of any additions or renovations and request permits. If you don’t have them, you may have to do something like tear down a room or garage. Or they might be so kind as to do what happened to someone Carol knew. They gave her retroactive permits, but after a hefty fine was paid, AND the seller was required to repay ten years’ worth of back taxes.

Where did that money come from, you wonder? Why, it came from the profit from selling the house. Over $30K. That was pretty much ALL of the profit. So, go ahead and shell out the money for permits!

So, do you have any more big things NOT to to do if you want to sell a house, from an investor standpoint? The ones below are from the viewpoint of someone selling a house to an investor and maximizing what they can get. But, we also want to maximize our sale. I’d love to read your ideas in the comments!

Here’s the post from our other blog:

It’s quite common for people thinking about selling their house to start making improvements in hopes of a higher selling price. This can be a great idea. However, there are some things to think through before making a lot of changes to your house.

  • Find out what works in YOUR neighborhood. If you are surrounded by manufactured housing and crumbling farm houses in a rural area, don’t fix your house up to upscale suburban standards. You won’t get a return on your money!
  • Stick with neutrals. We recently looked at a house with brand-new tile. Half was pale blue, half was a mix of pink and gray. That’s not neutral. It will only appeal to a small subset of their potential buyers. Also, navy blue paint? Not neutral AND hard to cover up.
  • Look at other renovations and do what they do. Spend time on Pinterest or Houzz. The house in the photo would have much better resale value if, instead of “button fixtures” all over the living area they’d put in can lights. Pricing is about the same.
  • Have your renovations done by someone who knows what they are doing. This means you check references and look at the past work of people you hire. You’d like the electricity to actually work. You’d like the light fixtures going in the same direction (see below).
  • Also, think hard about how long and how costly your home improvements are. If they take months and cost a lot, you may very well come out ahead by selling your house below retail to someone like us, because you won’t be paying the holding costs (mortgage, utilities, and insurance) or the renovation costs. Besides, if you make the wrong decisions, you might actually make your house harder to sell, so don’t risk it unless you know what you’re doing!
  • This is very important: don’t do work that’s not permitted. You could be asked to remove un-permitted additions before you sell, or at least pay, and pay big. 

There are a LOT more things to consider than what I just shared. Here are a couple of good lists to start with:

BA_bath

It’s nice to have matching fixtures

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Bobcat Mini-Update

 

living room shelves

The “floating” shelves. The white part will have dark wood behind it. Sort of a modern version of those wood accent walls people keep making.

While we are waiting on our big ticket items (the granite, the light fixtures) we did a quick check on the Bobcat Lair project late last week.

I got a better picture of the master bathroom (soon it will have a tub!), and a close-up of the beautiful discontinued tile (see gallery below).

There were a couple of lovely things to see. First, the shelving in the living area got painted its final gray color. Wow, is that going to look nice. Between the two “units” will be panels of the same material as our flooring, running horizontally. The room needs the dark accents to tie things together, since the paint is all light and airy. The mantel and the beams in the ceiling will also be dark brown, which should be just enough to keep the space from appearing bland and like every other renovated house you see.

tile steps.

Looking up the stairs leading to the new bathroom.

I also realized what a nice job the crew did with tiling the steps that go up to the new bathroom. The way the pattern flows really makes the tiled steps a feature, not just a necessity, and when the stair rail is installed, it will look spectacular (there’s another picture below). It’s all the more impressive, since this area looked pretty ugly before it got finished. The rooms  have a lot of different elevations, thanks to the layer of bedrock under the house, but it makes it interesting and unique. This is NOT a cookie-cutter house!

Since our visit, the electrician has come and finished all the last-minute wiring that had to be done before the countertops get installed (he’d forgotten to wire for the microwave, and the cooktop also needed doing). So now we are ready for counters…and of course it rained, so another day’s delay.

We got all the last-minute items ordered, though, including pulls for all the drawers and cabinets, the light fixtures, and some faucets and such that we didn’t have enough of. The big-ticket items also got ordered from some new company that is coming to Austin, Pirch. We got the scary fancy double oven (just like the ranch one) for enough of a discount that it covered the price of the gas cooktop. Both are Bosch, which is my favorite brand for ergonomics. In the neighborhood we’re in, high-end appliances are expected. Hee hee, I’m not complaining.

orange-ness

Where’s Anita? She’s invisible!

Next week’s update or updates will be much bigger! Invisible Anita says it will be THIS big! (See why she wanted orange walls? It’s so she can hide!)

By the way, if you are interested in reading the WHOLE long story (going back to 2014) of this project, please visit our Bobcat Lair page. There are links to all the previous posts, and an abbreviated (really, it’s a LONG story) version of what we’ve been through and why we are so thrilled this project may actually end some day.

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