Here’s a Sneak Peek of the new build we are doing in South Park. Rough framing is now complete, roof on, Milgard aluminum windows in, plumbing done, HVAC almost complete, next up is electrical and fire sprinklers then I can call for the big “rough-in” City inspection.
Here’s a walk through to show the progress of The Painted Lady at week 6. After waiting 4 weeks for historical board approval we finally got the green light so we started calling for inspections. It was quite interesting to say the least, initially we failed both the foundation and framing because of a few small issues. The trench for the foundation was 2″ too shallow, the plans I drew noted a 24″ deep trench which is overkill because a 2 story house only requires 18″ deep footings but I wanted to beef it up a little. I also upgraded the rebar size from the nominal 1/2″ as code requires to 5/8″ just do make it stronger. None of this mattered when the inspector showed up, he failed me anyway for lack of the 2″ to make it match what the plans called for. On the framing I was missing a few nails as the plans called for. I knew it wasn’t a big deal to make these few changes so it really didn’t bother me to fail. We fixed them quick and called the inspector back out 2 days later.
This is when I learned that nothing is going to just get signed off on that quick. When he arrived it took him all of about 10 minutes to measure the trench depth and check for the framing nails. He then proceeds to tell me that he can only pass me on the foundation but I’ll have to wait to pass on the framing. Really, didn’t you just look and see I made the corrections? I’ve heard that they commonly show up and will only sign off on one or two things due to time restraints. The framing inspection includes about 4 categories; roof, floor, wall construction and sheer panels and could take up to 40 minutes in theory. Although he already verified everything was o.k. he only passed me on the roof portion “so I could stay busy and put my roof on.” As you can imagine there’s not much new construction going on, so last year half of the inspectors got laid off so I don’t think morale is at its highest level. With half of the staff now the inspectors are covering twice the territories so there’s not much time when they show up. When dealing with inspectors always tread lightly, give respect and remember not to rock the boat. The best rule is to close your mouth and just listen. This is exactly why most rehabbers look for the cosmetic flips or sneak by without permits. Next week will be big, plumbing is now completely done, hvac done and electrical 75% done. Monday we are finally pouring the foundation after waiting forever for the City. Even with the slow downs I’m still pushing, small set backs are just part of the business.
Several other cool things in TomTarrant.com land for this week;
1. There is a new contest at REIClub.com that I am nominated for. It’s another Best Real Estate Investing Blog shoot out. I’m up against some really popular sites so please go and cast your vote for me. Voting doesn’t begin until Monday, June 13 and goes through midnight on Friday June 17. This one is big, I could win a $250 Apple gift card which my wife would love. I need your help on this one guys, if you like the info I share here for you, please take a second and go vote for me!
2. Joshua Dorkin over at Biggerpockets.com asked me to do an off the cuff Skype video interview for him where we’ll cover general real estate investing stuff and info about my house flipping business. Make sure and go by his site next week and look for the interview. I’ll probably spill all the secrets you’ve been wanting to know.
We ended up going with Golden Pecan floor stain after trying about 8 different stain color samples. After applying the stain we used 2 coats of semi gloss polyurethane (buffing between coats) and mixed in a little Colonial Maple color to tint it even more. I’m really happy with the way they came out, only new wood can look like this so I’m sure the future owner will appreciate it. In the original part of the house the floors are almost 100 years old so they aren’t this perfect of course but a little distress look is appropriate due to the style house and age. As I was saying before I didn’t want to stain the whole house dark just to hide a few imperfections up front and not get to appreciate all this new red oak in the addition.
Here’s a sneak peek at the master bath. As you can see the glass company showed up this week between floor coats and installed the custom frame-less glass for the shower. The door is 7 feet high with chrome hardware that matches the other interior doors, I always design them a little higher than the shower-head. The fixed glass picture window is suspended in the tile opening with more beautiful chrome hardware. Most builders put the clamps on either the tops or sides but I did something a little different by having 1 clamp on all 4 sides. This custom frame-less glass ran $1300.00 installed. My plumber is coming this week to set the spa tub and fixtures, with my last contractor I would have done this myself but the new plumber doesn’t want me to touch anything so he can give the future homeowner a 2-year warranty, cool with me, less work. Check out how the new wood even runs through the bathroom and into the walk-in closet, this is a killer upscale look and blows away any kind of floor tile I could have used.
I recently heard that 30% of Americans (myself included) don’t park in their garages, they only use them to store junk turning them into basically a drive-in closet. In California people have alot of pride in their cars, detailing businesses flourish with customers paying hundreds of dollars for hand waxing but then again it never rains so it makes sense to keep your car clean. Here in San Antonio we get an average rainfall of about 32 inches compared to 9 in San Diego. Even after a rain you’ll still see puddles a week later because the streets are so bad. With all this rain you’d think that garages would be hugely popular here. It’s not the case however, people would rather enclose their garages for more living space because they don’t go outside anyway as it’s too hot and humid. Plus, their car is going to stay dirty anyway, garage or not, because of the weather and the street conditions.
So, why the hell did I build this garage you’re asking? Our project is going to be priced around the $400k mark in a city where average home proices are around $150k. Theres an unspoken rule that if you are paying $400k in San Antonio you better get a garage. Even if the locals don’t appreciate them most of our buyers are moving in from other states and telling their realtor to do searches for 3/2/2’s so we dont want to miss any potential customers. Once they get used to the SA way of life I’m sure they’ll stop parking in there, their car will be filthy and it’ll be full of crap. Either way these historic houses don’t have much storage so it’ll get used. I designed the 500 s.f. garage to look historic and match the house architecture. I’ll be using “T117 House Siding” again and I’ve left the rafter tails open, included huge 28″ overhanging eves and even a clipped gable roof. There will be a vent under the gable and of course I’ll multi-color it as well to match the house.
Finding good contractors is a huge key to your success when flipping houses. There are 2 kinds of contractors, General Contractors, or GC’s, and Sub-Contractors. Most investors hire a GC who then brings in his own sub-contractors, oversees all their work and tacks on about 30% to your price. This works great for people who have little construction knowledge or don’t want to spend the time ordering materials, checking in deliveries, writing checks on Fridays to subs and overseeing work. My feelings are that most investors are doing this anyway and basically acting as their own GC, so shouldn’t be paying for one. Homeowners these days are even acting as GC to save the 30% and hiring subs themselves while building their new home. There’s even a national company called U-BuildIt that sets you up with the list of subs for a fee. So, the key to the savings is finding the subs and managing them yourself. (more)
We have now passed all rough-in inspections for the Target House. Tomorrow I’ve called for the next inspection which is for the framing. This inspection is on the whole house permit that the owner or GC pulls. When inspecting framing they look for placement and relationship to all the trades’ fixtures as well as other items like foaming the windows and fire blocking the holes from the electrical wires. Once I pass framing I’ll be free to hang the insulation this week. Only after the City then inspects the insulation job can I hang the drywall. I’ll order it for a late week delivery and we’ll start hanging right after the insulation inspection.
Today I had the whole house sprayed for wood destroying insects (termites). This is the perfect opportunity to spray as the walls are all opened up. I don’t know any other rehabbers doing this, it’s a little more expensive but worth its weight in gold to the future homeowners and the life of this killer old house. The residue stays in the walls for up to 10 years and also kills roaches and other bugs who normally use those highways to enter your house. These old historic homes have tongue and groove wood all over the walls and ceilings so it’s a party if termites get in. I’ve heard of some people sprinkling seven dust in the wall cavities before drywalling but as you can see in the video we soaked everything to the hilt.
Here’s how my 900+ s.f. addition came out over at The Target House. The floorplan is flowing nicely even with the change in elevation to the master suite. That hallway is actually 46″ wide even though I mistakenly tell you 42″ in the video so its not cramped at all. As you can see I basically had to rebuild the entire floor in that back room this week because it was originally a screened-in porch so it sloped down for drainage. It’s all straight now and lines up perfectly with the new addition. As far as sales go, we are getting great showings at The Neighbors House, Spring is here, the weather is beautiful, flowers are planted and there is a strong smell of home buyer in the air: ).
For those of you taking notes, I just completed step #4 in my standard order for major renovations.
Step#2 Level the existing structures’ foundation
Step#3 Frame up new construction portion
Step#4 Put the roof on
As with any renovation the demo always comes first. Next, I always level the existing house’s foundation so I am starting with something straight before I add on. Thirdly, I frame up the new addition and then finally get the roof on so everything inside will now be dry. After the roof I’ll usually move towards getting the siding on which includes doors and windows then I can have my sub contractors come through and rough-in the electrical, plumbing and hvac. I like to have the house secure before new stuff goes in so this is my reasoning. You can see how the roof gable pops up moving backwards through the addition, this compensates for the interior steps keeping the same 9′ ceiling height throughout.
After my usual price shopping all over town I ended up getting the 30-year roofing material at Lowes for $50/square. If you are spending alot of money at Lowes or Home Depot have them send your quote to the “bid room.” They’ll come back with another 10% off everytime. If you bring in a competitors quote they’ll beat it by 10%. In San Antonio if you can speak a little Spanish you can get a roofing laborer to put on a new layer for $20/square if you supply all the materials whereas roofing contractors charge over $160 with materials. I ended up throwing down about $80/square total after including all new flashings, tar paper and drip edges. I used my favorite color Estate Gray by Owens Corning, it goes with everything and looks rich. This isnt bad and less than half of what a homeowner would pay. This roof is 37 squares so the total price is around $4000 which is a great price for a 30-year shingle with all new metal and added ridge vents on a 2200 s.f. house. Another rain storm caught the guys mid-way Saturday so we’re finishing it up Monday.
After some last minute on-the-fly floorplan changes Thursday night from our architect Morgan at Dewitt, we finally got our material delivery Friday afternoon and my new framing crew got started. We really cut it close as she actually showed up to the jobsite with the new plans just hours before the framing started. These guys are very detail oriented and even cheaper than my last guy so I’m pretty stoked I found them. Framing in San Antonio goes for about $3.00-3.50 per square foot for new construction if you deal directly with a sub contractor, in case you are wondering we negotiated $2.71 per foot for this project. In a day and a half they got the floor system done and all the walls up, all that’s left for Monday are the ceiling joists, rafters and decking. The master has a cathedral ceiling and we are also doing a double-sided gas fireplace between the spa tub and master bedroom which are both new for us so its exciting. I’ll get the roofers over as soon as framing is done so we’ll be all “dried in” and then i can get started on the siding myself.
A Major TV production company in Hollywood that does all the good reality shows on TLC Network and HGTV contacted us this week about doing a reality show about house flipping. They found out about us evidently through our YouTube channel and got to my website. It would be real cool to get our own show but unfortunately they are looking for someone doing a minimum of 10 houses per year, probably so they can film enough episodes. Theres been a real lack of good flip shows on TV lately, we really enjoy Flipping Out because Jeff Lewis does the larger spec deals like us and Property Ladder was always good because Kirsten Kemp the host is great and they also featured such a wide variety of different investors from pro to novice. As far as the new Flip This House crews, Rudy in LA isnt really doing it for us and the New Haven crew seems to be more focused now on selling courses online like Montelongo. It’s pretty flattering nonetheless to get approached anyway, maybe there will be a Property Ladder episode in our future?
We are still getting good showings at The Neighbor’s House and I feel the Spring buyers are just now getting out there now that we have great weather. In San Antonio, sales are off 4% year to date when compared to last year and inventories are slowly rising this year by about 100 houses per month. After a closer MLS search for our general area, its apparent that there are tons more sales that are AO (under contract) or Pending right now so this figure should be improving for March.