More Concrete and Inspections

Just a little more concrete last week and now its time for framing. The first thing I did was have a third party inspector come and sign off on the construction of my block stem wall. He personally witnessed the mortar mixture and rebar placement inside. Then I called the City inspector also to sign off on it once it was completed. The reason for the extra stemwall is because the outside wall is the balloon wall and the inside wall supports the load from the upstairs floor joists. The stairs go up in between these two foundation walls and each has its own footing.

When the truck came to fill it up we also had to have the third party “special inspector” on site to take a sample of the mixture that came out of the truck. He packaged it into a small box that he’ll send to a lab for analysis. They test part of it at 7 days and the balance at 28 days for compression strength by putting it in a crushing machine. Inside the stem wall I used 2500 PSI grout mix. I only normally use big rock but this is the only place that its o.k. to use the pea gravel mix. I would never use it in a concrete footing , foundation or driveway.  The cost for the 2 trips from the special inspector and the lab test was about 500 bucks. I don’t know what would happen if the lab discovered I got a bad batch from the concrete company, probably make me tear down the wall and start over. I’d rather know now though before I move in that’s for sure!

Next I poured the garage floor. First I rented a compaction machine for the dirt, then put down plastic moisture barrier, topped it with 3-4 inches of manufactured sand and then my #4 rebar 18″ on center tied into the perimeter footing as the plans called for. Once the City came and inspected it we just backed the truck right up to it and poured 7 more yards of 3000 PSI 3/4″ concrete.  Once again you’ll see a lot of guys using pea gravel mix but its not nearly as good and tends to crack faster. The larger the rock size in concrete the better. I’m ready for framing now and getting material price quotes from Home Depot, Lowes and Dixieline. Hopefully we’ll be starting on the floor system by mid week if I can get a quick delivery, the framers are anxious and cant wait to get started. I’ll order my custom Milgard windows and exterior doors this week as week so they will arrive about the same time we are done with framing.

Raised Foundations for Dummies

While the City of San Diego only requires footings for a 2 story house to be 18 inches deep, went close to 5 feet in some spots. You can see here that the bottom of all my trenches remain level with steps, so gravity doesn’t take our house down the canyon. The reason the footing trenches vary in depth is due to the distance to reach native soils. No lot is perfect, in our case with this house one main challenge besides having the rear 30% unusable due to the canyon is unstable fill that’s been there for years. The only alternative to digging all the way down to native soils would be to have the whole site compacted to 90%. I could have done a slab on grade at that point but at the end of the day I felt this way will be the most structurally sound. While these deep footings will eat up expensive concrete at $95/yard, a slab on grade foundation would still need deepened grade beams and since the lot slopes down towards the back, the foundation is 3 feet high and end up being about the same amount of concrete. Note the existing 4″ sewer lateral ready to go.

The excavator we rented made quick work of the foundation dig but after the soils engineer came and inspected our footing trenching, he requested us to go farther into the native soils. You can easily see here where the brown, silty cobble fill changes to a rock hard gold color at my spray paint line. This stuff is so hard to dig we used a jackhammer for 3 days to deepen the trenches to satisfy the soils engineer. He’ll now give me a certificate which I’ll hand to the City inspector when he comes to inspect the foundation forms and rebar placement. As previously mentioned, you could roll the dice and not have a soils test but if the City inspector feels there is fill he’ll make you take all the forms apart and get the report anyway. I want to build it right so in my mind this is the only way to do it.

The first step in forming a raised foundation is pulling some control lines from which you can set your exterior forms. We build them all with 2×4’s and OSB, setting the outside of the house footprint first and then starting with hanging the rebar inside. All rebar has to be 3″ away from dirt or forms. Finally after cleaning out and debris that might have fallen into the trenches you then set the inside form. After inspection we’ll pump concrete in from the top.

Once again the City only calls for (4) 1/2″ horizontal rebar inside the foundation with vertical bars 24″ on center.  For just a little extra cost I upped the ante to (6) horizontal 5/8″ bars with verticals 16″ on center. Raised foundation houses in California have this exterior stem wall. In the interior of the foot print the load is typically carried by4x6 treated sills that the floor joists rest on. These beams usually sit on posts and piers. My raised foundation design is far superior with one more stem wall running down the middle of the house like a spine. I’ll be using TJI floor joists which will span the whole width of the house without any posts and piers. We’ve fixed so many foundations on old pier and beam bungalows, with this method you’ll also have the convenience of a wide open crawl space to run mechanicals without any posts in the way. A little extra cost but by far a superior design for a raised foundation. Most of the neighbors have stopped by now, its the talk of the street that something is going up on “old man Fred’s” lot. I’ve been extremely respectful to everyone, even buying car washes for neighbors whose cars got dusted out by all the digging. I also rented a construction fence with privacy mesh so no one has to look at the mess all summer. We should be done with the forms mid week and then we’ll get started with the underground plumbing that needs to go in before we pour concrete. Stay tuned, once I get past the undergrounds and pumping this foundation it will get framed up real quick.

South Park in 3D

Here’s my South Park project modeled in 3Ds-Max with V-Ray. Refreshingly modern and comfortably traditional all at the same time. Exploded views of the upstairs and downstairs floor plans coming soon!

South Park Modern Craftsman Plans

Here are the plans for the custom house we’re building for ourselves in South Park. It’s a Clean Modern Craftsman 2-story design, 3 bedroom, 2.5 baths with a detached 2 car garage at around 1900 s.f. For the bungalow feel we did nice 2×8 barge rafters at the gable ends with an a-typical edge detail and bold yet simple 4×4 brackets over 6″ corner trim. Porch columns front and rear will be 8×8 in smooth Cedar, just sealed. You can see the first floor is wide open and expansive with 10′ ceilings, the entry leads you into the dining area that opens right across to the kitchen. In the island kitchen we have a walk in pantry and a peninsula for casual eating. There is a powder room under the stairs and then the whole back of the house is the great room also off the kitchen for entertaining with direct access to the back yard complete with covered porch and decking on the canyon. Indoor utility room is also just inside the rear door.

All the bedrooms are upstairs, gracious closet spaces, full master suite with sit down spa tub as well as stand up shower. Dual vanities in both upstairs bathrooms. Normally we try and put the master suite downstairs but we dont mind stairs so it worked better putting all bedrooms up. I’m doing exposed galvanized metal roofing on the open porch framing and aluminum Milgard casement windows as well to give the urban mod feel. The back porch also provides a perfect breezeway to the detached 2 car garage. Check out the balloon framing in action on the side elevation/staircase windows, this is definitely some out of the box home design that’s going to make a huge impact in South Park. Estimated completion December 2012. Thanks Morgan for the help!

BTR w/ JtR

For those of you guys who missed it, here’s my interview from tonight with Jim the Realtor on Blog Talk Radio. We ran a little over time, I think its about an hour and a half. Thanks to Jim and Richard for putting it together, and you guys who participated online and called in. Please share it or tweet it!

http://www.blogtalkradio.com/jim-the-realtor/2012/02/14/tom-tarrant-on-btr-with-jim-the-realtor

New South Park Project

Great news this week, we are going New Construction in South Park and building a killer brand new Craftsman Bungalow for ourselves on a canyon lot. I dug this deal up straight ninja style, no MLS listing, no For Sale sign in the yard, just some driving for dollars, looking up the owner on the tax rolls, a cash offer and we closed 5 days later. A build-able vacant lot, with utilities, in popular South Park is virtually unheard of. You’ve seen us do some Major bungalow transformations such as The Hat Trick House, The Neighbors House and The Target House but stay tuned and see what we’ll build given the opportunity to start from scratch and build one for ourselves! Plans are in the works, I’ll show you guys soon our design ideas. Stay tuned, 2012 is off to a great start!

Inspections and Appraisals

Happy Holidays to everyone! It has been nice to take a break and spend time with my family and new addition for the holidays.  We are out there turning over stones and looking at tons of new fixer upper houses to buy in San Diego, thanks to everyone who is also sending me leads. We Buy Houses in San Diego so if you know of a house please contact me.  The Painted Lady sale is closing next week after easily passing the physical inspection and VA appraisal. We even have a back-up buyer in place who is devastated she didn’t get the home.

The home inspection was pretty interesting to say the least, we sometimes miss something but generally have had no problems with our homes passing after all the work that we do.  This inspector however took a different approach and basically made some stuff up to fill his report. The big front picture windows we had custom made are of course tempered glass for safety, the inspection report I saw however said they were not. Tempered glass has a little logo in the corner, easy to see. For some reason this inspectors eyes weren’t focusing that day I guess. Foundations on old houses are another item that inspectors just feel they need to address for some reason, even if they are fine. The inspector wrote in his report that the house was not anchored to the foundation. Really?? What are all those J bolts through the bottom plate in plain view and the UFP plates along one side? I can see how some inspectors might not want to do the army crawl and check the entire perimeter under a house that sits low to the ground but there’s enough room under our house to have a party, believe me I spent all summer under there! Also the guy calls out the plumbing for being old cast iron which we removed and replaced with ABS. Probably the funniest thing I read in his report was that a light didn’t work in my hallway. I say to myself, OK a bulb must have burned out but surprisingly enough I get there and see that the dimmer switch on the 3-way wasn’t even on! If you are going to say something is wrong on a report wouldn’t you take a really good look first? When you get an inspection report that has obvious errors it’s best to just address them and provide your buyer with something in writing that shows where you feel their inspector was wrong. In our case my buyer was happy I showed him where probably 5-6 points were clearly invalid on the report.

Remember, 3rd party home inspectors are not City inspectors nor general contractors, and most of the time have minimal building knowledge. A home inspector credential can be obtained with 60 hours of online courses. Getting a bad inspection report is pretty common and sometimes is enough to spook a buyer and cancel a sale. It’s emotional enough buying a home, especially for a first time buyer. One home inspector in San Antonio named Matthew Gessner from Amerispec was famous with all the local real estate agents for blowing deals, its a wonder anyone uses him. A bad home inspection report sticks with the property, right or wrong, and has to be disclosed to future buyers if your transaction falls apart.

As I mentioned The Painted Lady had no problem appraising for the sales price. Home appraisers like to compare apples to apples but in our case Grant Hill doesn’t have any other sales comps for turn-of-the-century Victorian Houses, however within the 1 mile and 1 year guideline, the average price for a home like ours is around $600,000 although its best to use comps within the last 6 months and a half mile if you are an investor.  If you are doing a big spec project like ours I would take a look at whats comparable within the year and a 1 mile radius, if you cant justify your sales price with what you find, there is a good chance that an appraiser wont be able to either. I’ve known several real estate investors here in San Diego that after rehabbing houses and getting into escrow, they had to settle for a lower sales price after a low appraisal came in so be careful with determining your ARV.

Historic Grant Hill Park and The Painted Lady

One of San Diego’s most distinguished residents was Ulysses Simpson Grant, Jr., nicknamed “Buck” and second son of the famous eighteenth President of the United States. Mr. Grant was born in Bethel, Ohio, on July 22, 1852, at a time when his illustrious father was a lieutenant in the Fourth regiment, U.S. Army. Mr. Grant attended Emerson Institute, prepared for college at Exeter and took his A. B. from Harvard University in 1874 and his LL.B. from Columbia two years later. He was admitted to the bar in New York in 1876 and was for a time Assistant U.S. Attorney in New York, Southern District. He married Josephine Chaffee in 1880. His wife was the daughter of Senator Chaffee of Colorado. Forced by ill health to seek a milder climate, Mr. Grant and his family selected San Diego and came here in 1893.

Soon after their arrival, the Grants moved into a three-story mansion previously owned by Samuel G. Havermale at Eighth and Ash Streets on Prospect Hill. The house was sold to Grant’s wife on November 17, 1893 by Ralph Granger with Grant, Jr. listed as the attorney. According to the agreement of purchase, the deed was filed in the County Recorder’s Office three days later, consideration being $25,000 in gold. 1893 was the year of a national depression and the year that saw many bank failures. Accordingly, money was not easy to get for real estate and the purchase price of the Grant mansion was only a fourth of what Havermale had paid for the house and most of the furniture, which came with it. The house had been built in 1887-1888 by Ora Hubbell, a well-known capitalist and local banker. The architects were the Reid brothers, James W. and Merritt, who had not only built the most beautiful of the tourists’ hotels in Southern California, The Hotel Del Coronado, but had also designed the George J. Keating Mansion. The Keating’s had arrived in San Diego seven years before the Grants, also attracted by the “salubrious climate.” Keating came to be healed, and he and Fanny, his second wife of four years, settled in the new Florence Heights near the City Park.

In addition, the site of the Grant home with its commanding view of the harbor, was one of the most valuable in the city. Built in Queen Anne style, the mansion was far more elaborate than might have been expected in the late 1880s, containing some twenty-five rooms. A spiral staircase, stained glass windows, and fireplaces of Tennessee marble and Mexican onyx adorned the living rooms. On the exterior, the first floor was pressed brick with brown stone trimmings and the upper floors were shingled. Elegant tile floors decorated the verandas and porches. Currently the El Cortez Hotel sits where this home was once located.

Grant continued to speculate in real estate. He also became a leading citizen, who pushed for the creation of a city park, that would become Balboa Park. Grant was a delegate-at-large for California at the Republican National Conventions in 1896 and 1900. He was also an elector for California in the 1904 and 1908 presidential elections

About San Diego – Grant Hill Park

The development of Grant Hill Park Historic District has been a long, slow process. Originally called Mount Gilead, the area was subdivided in 1887 by Mrs. W.E. Daugherty. The sparse development in the area indicates that this was a predominantly rural area of small houses and orchards. There was little construction in the area until 1906 when Ulysses S. Grant Jr. purchased a major portion of the subdivision, including the top of the hill, and resubdivided it, renaming it U.S. Grant’s Hill.

Ulysses S. Grant, Jr. (1852-1928) had long held the dream of erecting the finest hotel in San Diego and naming it the U.S. Grant Hotel as a memorial to his father, the former General and U.S. President (1869-1876). Just as his dream was about to come true, it appeared to be dashed when the San Francisco earthquake and fire of 1906 brought construction of the U.S. Grant Hotel in downtown to an abrupt halt. Because there was no lumber available, all construction in San Diego had stopped. While the hotel would finally be completed 4 years later, it may have looked to Ulysses Grant Jr. that his dream would never become a reality. This may explain why Grant Jr. purchased Mount Gilead, a prominent hill commanding a spectacular view, and changed the name to U.S. Grant’s Hill. He may have wanted San Diego to at least have a natural prominent site as a memorial to his father.

In order to take advantage of the view of the bay, the ocean and the hills of Mexico, Grant Jr. had “J” Street, which in earlier Mount Gilead subdivision would have cut over the top of the hill, graded in a curvilinear fashion to the South around the summit. The summit itself was never built upon and for many years served as a natural “reserve” where members of the community could retreat and enjoy the view. In 1940, the neighborhood conducted a campaign, under the leadership of Violet Black and the Golden Hill Improvement Association, to develop the summit area as a city park. With strong support of the community, including a contribution from George W. Marston, the City purchased the land for under $3,000 and developed Grant Hill Park.

In 1912, Michael F. Hall, a close friend of Ulysses S. Grant, Jr., and a member of the board of directors of the U.S. Grant Corporation, purchased the entire North side of “K” Street between 26th and 27th Streets. He built 15 bungalows along this block in this same year to sell as spec houses. Mr. Hall was a prominent realtor and businessman in San Diego who developed Mission Hills, Bird Rock and other San Diego subdivisions. When he built these houses, Mr. Hall was quoted in the paper as saying he had many more plans for the Grant Hill area.

The development of the area around Grant Hill Park was a very slow and sporadic process. Individual lots were purchased and built upon over a span of eight decades and, thus, cover a diverse range of architectural styles. To this day, this community presents a low density, low-key rural development character.

Also, in the early 1900’s, a number of homes were built by a family named Berger. This family worked as Stone Masons and owned their own firm called Berger Brothers. Their profession may be responsible for the many cobblestone retaining walls in the area, a unique and consistent design feature of the Grant Hill neighborhood. The Bergers were also a part of a larger German colony that lived in the greater Golden Hill and Sherman Heights areas.

Because of the nonrestrictive nature of the neighborhood, many ethnic groups have settled in the Grant Hill area over the years. Kikuye Kawamoto, a prominent Japanese restaurateur built a fine Spanish Colonial Revival home there in 1936. Mr. Kawamoto was the owner of the Frisco Café on Fifth Avenue in The Gaslamp area. The Kawamoto family and all the Japanese –Americans living in this neighborhood were forced to leave in 1942 when they were sent to military detention centers for the duration of World War II. The Kawamotos, unlike most others, were able to return to their home after the war and were still living in this house in 1967 when the architectural survey was made.

In 1990 the City established The Grant Hill Historic District and as recently as 2007 set forth detailed developmental guidelines. No alterations or modifications may be made to historic structures without obtaining a permit from the Planning Director and undergoing an intensive review by the City’s Historical Site Review Board.

The Painted Lady Bio

Although the tax records show 1909, our Victorian 2 story house located at 405 27th Street was built on lots 15 and 16, Block 50 of the Olmstead and Lowe’s subdivision possibly as early as 1894.  It currently sits right across the street from Grant Hill Park and is the oldest and only 2 story Victorian on the hill. Geo Bell purchased the lots in 1891 and made an improvement by 1894 valued at $1475. This improvement indicates the building of a home, though no building records could be located. Although not certain, it appears that SEG Dougherty (Sallie Elizabeth Geller) may have lived at this property between 1893-1900 so our home might be technically “The Bell-Dougherty House 1894.”  Sallie Dougherty was involved in the subdividing of the Olmstead and Lowe’s subdivision in 1887. On August 20, 1900, Geo Bell sold the property to Homer G. Taber, who only a month later sold it to Mrs. Tina Pope.

Mrs. Tina (also spelled Christina or Tena) Pope owned and lived at 405 27th Street for about a decade.  In 1910, Tina Pope filed a sewer permit with City of San Diego, indicating that until this time the property was on septic and likely had an outhouse.  Mrs. Pope was a widow when she purchased this house and lived there with her son, Walter Lester Pope.  During her tenure at 405 27th Street, Mrs. Pope worked as a fruit packer.  According to US Census documents and San Diego City Directories, Mrs. Pope opened up her home to lodgers.  In 1913, Mrs. Tina Pope and her son, Lester (Walter), were listed as proprietors of the Hotel Webster at 912 8th Street.  By 1917, Tena and Walter were both living in Oceanside where Mrs. Pope was the proprietor of a hotel there.

By 1913, 405 27th Street had new owners: Sidney and Jennie Stead.  In 1913, Sidney was working as a salesman for De Varona & McDonald, a real estate company.  In 1914, his occupation was Bailiff at the Superior Court.  By 1917, he was working as a gas purifier at San Diego Gas and Electric Company.  The Stead’s lived at 405 27th Street until 1956.

We purchased The Painted Lady in Spring 2011 and during the course of the Summer completed the total ground up restoration. To see the complete renovation story, see before and after pics, and videos visit http://tomtarrant.com/tag/painted-lady/.

Sources:

Christianne Knoop

Tom Tarrant

Save our Heritage Organisation

San Diego History Center

Wikipedia

Special Thanks to:

Steve “Barney” Barnett

Jim The Realtor

Ken Kramer’s About San Diego

Jodie Brown, Senior Planner Historical Resources Board San Diego

Painted Lady Open House

It’s finally done! Green Button Homes presents: “The Painted Lady” for $499k, she’s a 5 bedroom, 2.5 bath, 2044 s.f. 1909 Victorian Gingerbread that we totally restored over the summer. There’s nothing like this property in San Diego right now on the market for the price. I’m having an Open House this Sunday October 23rd from 1-3 pm. If you are in the market or just want to see the project please feel free to stop by after the Charger game. The address is 405 27th Street 92102 in Historic Grant Hill Park. Here’s a walk through video from Jim The Realtor, he’ll also be onsite Sunday to assist any potential buyers. I’ll post more pics, back stories on the property and a before and after video soon.

*Realtors, we are showing this fine property by appointment only. There is no lock box onsite. If you have a buyer and want to schedule a showing please call Jim Klinge (760) 434-5000 or myself at (619) 565-7475. See ya Sunday!

Paint on the Lady

The painters I hired for The Lady turned out to be a little in over their heads. Throughout the week I found myself initially letting some poor prep slide, then finally by the end of the week I was actually showing them how I wanted things done and had my hourly helper doing their work. Since we had agreed on a contract price and not hourly, I told them it just wasn’t working out and I wanted to break up. The straw that broke the camels back is when I had my guy re-sand a whole wall because they didn’t prep it good enough and then before we could even put some primer on it, they sprayed color right over the raw wood. I feel much better now after letting them go, me and my guy will probably just finish it off ourselves. The paint job is real important on this house and as you know its all in the prep, but even though I had not planned nor budgeted for the caliber of work we’ve done in the past, it still needed to be better than what I was getting.  This is the first sub contractor who hasn’t worked out so I’ve been really lucky getting back here to San Diego and having to build a new team and at least the error is on something I can fix. I am super excited with my colors, the first one we put up after primer is the dark green on the big eaves. Victorian color schemes are known for dark eaves and trim and lighter body colors. The pictures are large format again so make sure and click on them if you want to zoom in: )

The second color we sprayed was on the gable shingles. This accent color will also be carried down to a few other spots later. Notice the ornamental rosette discs I found online to replace what must have been there originally. When we pulled the siding off last month I noticed these circle marks and figured out what had been there years ago. These little details are going to pop after all the colors are up. I’ve got one more period detail big surprise with the front porch handrail, the house is looking really good now but only half way to the impact I’ve got planned!

The drywall crew is doing a great job and should be finished in a few more days. The hand troweled smooth texture is coming out perfect so that’s my good news for the week. Here are a few pics before the texturing went on, the huge tray ceilings are really dramatic. I also went with the new style “mini-bullnose” for the corners, its smaller than your typical rounded corner but very sharp and clean and usually reserved for high end custom homes. My plan is to keep pushing on the exterior so we can get all the colors up before coming back inside to do window trim, interior paint and flooring. We had a good home sale a few blocks over, its another historic 2 story rehab, 500 square feet smaller and only a 2 bedroom went pending after only 5 days on the market for $425k. We’ll have to see what it closes for but I’m sure they didn’t take too much less with that short market time.

Painted Lady Week 6

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!

http://www.reiclub.com/realestateblog/best-real-estate-investing-blogs-2011/

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.

http://www.biggerpockets.com/renewsblog/real-estate-interviews/

It’s Heatin’ Up

Even with the short week we still managed to get a lot done. The plumber is almost done now and I had the hvac guy come through and he roughed in the whole house in 2 days. I installed a Goodman 70,000 btu central heat system only with all new ducts. It was a breath of fresh “air” not to have to do the full central air system because in most areas in San Diego you don’t even need air conditioning. These guys don’t mess around in this town, he rolled in with 6 helpers and they knocked it out. What a change from “Land of Manana” as we called San Antonio, where most workers only did the bare minimum, never showed up and just squeaked by since the cost of living is so low there. Thanks to my buddy Curtis Gabhart from Gabhart Investments for the referral! Check out his site if you want to see how the big boys are rehabbing here in San Diego.

I always bring the hvac sub contractor through second, then finally my electrician will come Monday and start with my 200 amp rewire and new service. The best news all week was that I finally appear to have approval from the Historical Review Board. The City Planner emailed me late Friday and said I could come pick up my plans. My project has been under review for over 4 weeks now, luckily they stamped my structural and mechanical plans right away so I could get started. If everything was approved then I officially have the permit and I’m free to start calling for inspections and can move forward faster. I’ll call for the foundation inspection first so he can check our forms and rebar, then we can pour Wednesday. Next I’ll call in for framing inspection so I can then put the roof on. Finally I’ll call for rough-in inspections on all 3 trades so I can then hang insulation and drywall the house up. It seems like a lot but I’m really not that far away from getting it sealed up.

I was a little surprised about code differences between here and in Texas, seems with all the regulations here in California they would be a little more strict on the duct work but evidently you don’t even have to put “pookie” on the registers or plenum. In Texas with the summer heat they were really strict on the system install but then again this is heat only and no a/c. Right now it’s 68 degrees and sunny. Sorry, to my friends in San Antonio already sweating in 100 degree, 80% humidity.. its going to be a long summer!

The San Diego Real Estate market saw some price slippage, in May there was a 4% decrease from year-over-year prices. Nationally, the 20-City Case Shiller Metro home prices are already in double-dip territory but we aren’t there yet even with the large decrease. I attribute most of this to the artificial market and tax credit last Spring, if the government would just stay out of everything and let the markets correct naturally I think we’d be in a better place. Here’s a good article by Rich Toscano over at Voice of San Diego.org.

Hammer Time

Feels great to be back doing what I love, creating new spaces, and most of all home in San Diego. We spent all week doing demo on The Painted Lady, with 3 laborers I gutted just about the entire house, maybe only a half day left and we’ll be done. I filled nearly (3) 40-yard roll off dumpsters at $427.00 each. I was really worried that we weren’t going to be able to get the dumpsters into the back yard, having to put them on a public street is a pain in the butt as you have to have a permit. My only other choice was paying someone with a dump truck to drive the loads to the dump one by one. This would have been very time consuming and costly. The house is huge inside, I am really excited and can see the final product already. Next up on deck after the demo is done is the foundation work, then I’ll be ready to re-frame the back of the house and put the new roof on. So far it seems sub contractor prices are not that much higher than I was paying in Texas, although I still haven’t nailed down a good electrical or plumbing contractor. Here’s a walk through video so you can see this great floor plan.

New Project – The Painted Lady

74 days after arriving home in sunny San Diego we’ve finally bought our first rehab project, The Painted Lady. I’m real excited about it, she’s a 1909 Folk Victorian Gingerbread. The house is located in an Urban Redevelopment neighborhood just 1 mile from Petco Park and Downtown, with incredible views of the Coronado Bridge and all the way to Tijuana.

There are original hardwood floors under the carpet, 10 foot ceilings, and a lot of original details still intact. This is a huge project and needs just about everything a rehab could require. I’ll be leveling the foundation by adding a new perimeter stem wall and 40 new footings, new roof, re-framing a 360 square foot master suite on the back, replacing all the mechanicals, new kitchen, 2.5 new baths including adding a half bath under the staircase, some new windows and complete landscaping and fencing with an automatic gate on the alley. The house has aluminum siding that’s probably been on there since the 70’s. I peeked underneath it and there’s fiber shingles probably from the 50-60’s . Under the shingles I found the original wood board and bat siding which I’ll expose and also add some of the missing period details like the gingerbread ornamentation and porch decoration the Victorians are famous for.

The Victorian era began in the 1830’s and ran until roughly 1940. Our house is a Folk Victorian, more simple in design than the ornate Gothic or Italianate Victorians, and was usually built more modestly for the middle class. I’m excited to see the scalloped shingles under the gables which I’ll paint multi-color and the decorative gable bracket. This architecture can really hold color well so I’m planning on using a minimum of 6 bold colors to bring her back to life. I’ve done a lot of Craftsman style houses but this will be my first Victorian and only the second 2-story house we’ve rehabbed. With the huge scope of this project it will be a perfect welcome home project and enable me to become reacquainted with the City permitting, historical and inspection departments this summer as well as dial in my sub contractor team. If you can’t see the potential in what we have here, Google “Painted Ladies San Francisco” and you can get an idea of where I’m going with this project. Stay tuned for demo and a walk through design video!

San Diego… Short Sale City

                                                                                                                                                                                                                                Yes folks, it’s definitely all about the short sales. With 1 in 6 San Diego houses underwater many homeowners are opting for strategic defaults and walking away from their properties. The hungry agents out there are simply working the NOD (notice of default) list and finding plenty of anxious sellers who want out as their home is now only worth roughly half of their loan amount. This presents a huge opportunity for investors and homebuyers willing to wait out what’s frequently a slow process. After scouring MLS for weeks for REO’s and swimming with all the sharks out there I decided to switch gears and actually get on the phone and start networking with the short sale agents who are on the front line with all the distressed deals. I’ve quickly come to realize that you have to make your own deals, not just look for one. Not every agent however who has a short sale listing is capable of influencing the deal, much less even closing it. There are third party professional negotiators who seem to have the process wired though. A good short sale negotiator can hammer the lender and dispute their BPO’s, even sometimes providing their own appraisals and documentation as to the value and condition of the property and build in the margin rehabbers need to make a profit. The downside is it can take 2-6 months to close a short sale so we are filling our pipeline up with as many as possible. Knowing who these agents are and networking with them is key, once again its not what you know in this market but who you know. If you are a homeowner looking to do a short sale in San Diego, make sure both lien holders give you a “non-deficiency”, it holds you harmless for the portion of the loan amount thats been forgiven. Our short sale agent has 100% success ratio getting this and has done over 150 transactions. If you are interested in a short sale please contact me.

Calling All Contractors! Contact me if you want to be a part of our team! 

Moving here I had the long term plan of stepping away from the labor part of the rehabs and just doing design work and overseeing the contractors.  Afterall, these arent huge projects, mostly cosmetic stuff. I had given myself a 3 year window to get to that point but after arriving here its evident that this needs to be my new business model right out of the gate. I’ll be hiring all the construction out so I can do multiple projects simultaneously so if you are a GC or know of a reliable one let me know please.  Maybe once the market picks up for move up buyers I’ll do some larger structural projects again but the money to be made now is on the entry level stuff, that only needs light rehabs. The profits wont be as large as we were used to but with increased volume we should be able to make it up and then some. I’m super excited, our California LLC is set up now, we have over 30 offers out there and some are very close to reaching acceptance so I’m looking forward to finding solid team members on the construction side. Also, many people are reaching out to me, new blog followers and old alike. I’m stoked to meet all of you, after the machine gets running we’ll be open to joint venturing on some deals, offering some of our overflow deals to you or even using private investment funds so contact me if you are in San Diego and want to chat about all the opportunities we are seeing with the local real estate market.  

                                                                                                                                                                                                                                 I’m not totally over the bungalow craze so fast though, I’ve got an offer on this amazing California Craftsman REO, I hope it pans out. I’m competing with conventional retail buyer offers that are higher but hopefully the lender will opt for my all cash offer instead. I utilized my “write the offer with the listing agent” strategy on this one: ). No matter what we start buying we’ll do some fun stuff and try to set our rehabs apart from the crowd by hopefully offering a little more attention to detail and some cool design sense. I’m really making headway, once we have more deals than we know what to do with I’ll share a little more about how I figured it out. Stay tuned and thanks for following.