(co-written by Sue Ann)
Next in the series on Lessons Learned from our recent projects is the Taylor Homestead project. We knew it was going to be a challenge, but we’d wanted to do a house in that area for a long time, and were excited by the potential in the place. Yes, there was a lot of potential, but our private money funding did not give us the budget to do all the things that would have truly made the house a home. So, basically, we made it cleaner and safer, so someone else could finish the rehab or rent it out.
How Did We Do?
It appears that we lost money on this one. Factors include how long the project took to get started and the fact that we sold it for much lower than we actually intended to sell it for, because an old listing was still up and we felt obliged to honor it.
What worked well:
- A really good contractor can keep to a budget and still do good work. Way to go, Chris at CHAMPS Handyman Services!
- Sparkle really does sell (and Anita made it sparkle!).
- Doing some of the work ourselves can help when budget is tight and time is available.
What we could do better:
- Every house in the area around and east of I-35 will need some leveling. Budget for it. That’s not bad, just true.
- Make sure the house you are buying really fits with your model. This one cut it close, which left us very little wiggle room. We’ve learned that if we buy a house wholesale, there probably won’t be much “wiggle room” on the renovation, so we will be more careful before doing that strategy in the future.
- Really old houses WILL have weird electrical wiring. Houses owned by eccentric computer hackers will have all sorts of unforeseen electronic “features” to remove.
- Don’t wait too long figuring out the scope of work. This was a hard project to scope, and the first one our project manager did. While we lucked out by getting a good contractor because of the delay, this increased holding costs significantly. And…
- Holding costs can add up when a project takes longer than expected, especially when you are using private money at a high interest rate. Our lenders did make money on this one, probably more than they expected.
- Trying to save money by using a small crew and doing a lot of the work yourself can also lead to delays. A larger crew would have been able to complete the work much faster.
- Sometimes it’s better to wait for the right price than to accept the first offer. On the other hand, sometimes the first one will be the ONLY one. So, this one goes both ways!
The house was a great learning experience for us, though. And it sure ended up looking GREAT.Hermann says please like and share!