I’m giving 110%, eating and breathing real estate but still haven’t bought anything. It’s been just over 4 weeks now since rolling into town, sometimes you just have to pay your dues so I’ve come to grips with it now. San Diego is so large and to find deals you have to be willing to cover some ground. This week I looked at about 30 properties and made 4 offers. I know the city pretty well after living here for 27 years but I had to buy a GPS to get swiftly around town to some of these unfamiliar locales. Most of the deals I looked at were on MLS and bank owned REO properties. They are commonly vacant and beat up. Some more than others, its common to see signs of past renovations like travertine tile or faux paint jobs from times when easy money and using your home equity as an ATM machine were so popular here. Many homeowners simply ripped everything out when they left and took it with them. A lot of lenders are opting to paint and carpet and then list for near retail price.
One deal I found early this week in the middle class neighborhood of Linda Vista was listed at $168k. It was a great little 50’s rancher 3/3 with a room addition. I pinned the ARV at $299k. It needed complete kitchen, 3 baths, paint in and out, windows, stucco, flooring, and landscaping. I estimated my rehab budget around $60k, it looked real good so I wrote an offer of $172k hoping to grab it quick. This bank only lists their properties on a website, you are not allowed to submit offers via fax or email. Its like the EBay of REO’s.
Whats neat about this system is its suppose to take out all the double dipping as the listing agent doesn’t even control what gets presented, the bank has direct access to the site and picks the best offer. You have to upload your proof of funds and everything to the site. On the last day someone overbid me by 500 bucks and got the house for $172,500. I should have sat at the computer all day.
My direct marketing is working as well, I’ve got offers out on several really exciting projects so hopefully those will come to fruition this summer. I’ve been networking with some other San Diego real estate investors as well, 2 of these guys have alot of offers out and have even offered me some of their deals so I’m real grateful. When you are chasing Short Sales here in San Diego its common to write offers on 15-20 houses and then wait for 6 months. This is the case with these guys and now some of the deals are getting accepted and they don’t want them all. I feel happy with the progress I’ve made during the short time we’ve been back but still anxious to break ground on the first rehab. Stay tuned to see what I’m going to end up with for the first project…
PS. I’m Still Looking To Network With More San Diego Investors, Wholesalers, REO Agents, Short Sale Agents, Contractors and most of all Anyone Who Knows of a Cool House For Sale, Friend me on Facebook or Contact Me here.
PSS. A Special Thanks to Peter for the lead you sent to me on the Real Cool house!
Here’s a great 1920’s bungalow project. It’s a bank owned REO in a highly sought after neighborhood. I missed this deal yesterday literally by hours. By the time we went to submit an offer they had just accepted another one. There’s another great investing tip back story with this house, I’ll share it after I know it’s gone for sure.
“Welcome to San Diego, Now Go Home!” This was a popular bumper sticker back in the day and I kinda feel like the real estate market is telling me this. After spending the first few weeks settling in I’m now excited to started looking at property and assessing the local market conditions. Here’s my take as an outsider just arriving. There are tons of deals here but tons of competition to boot. Several agents have showed me stuff and of course I am searching MLS daily for hours and getting to know the “new” old system. I’ve found the San Diego market to be quite energized with a flurry of seasoned investors, newbies and first time home buyers all competing for what really appears to be a limited amount of inventory. When getting in a bidding war against a potential homeowner for a MLS property you’ll likely get outbid unless its an all cash sale. All the newbie investors that seemed to come out of the woodwork, are also bidding the MLS REO properties up to a point where its difficult to make a decent margin. Some of these guys are settling for skinny profits just to try and keep their volume up. Investors are commonly using POF from hard money lenders, tying up properties with a winning bid and then going back to negotiate round two after inspections. This isn’t anything new but seems to really have listing agents’ guard up here. Local wholesalers are running around town touting their overpriced deals as well. Foreclosures at the auctions have picked up this year substantially but you have several big players to compete with who are paying up to 90% ARV minus repairs. One of these investment groups is backed by Chinese investors and bought over 350 properties in 2010, that’s more than 30 a month. Another group is doing almost the same volume and a third player has about 20 million floating in entry level houses as this has been where the easy sales lie. It was interesting to see that the San Diego Courthouse foreclosure auction is daily, not just the first Tuesday of every month as in San Antonio. That shows you the volume difference here. There are many partnerships of guys doing 5-10 rehabs a year as well and they are all competing for the same stuff.
Being in a new market certainly has its challenges, even if it is my home town. Looking back at our move to San Antonio makes me realize how lucky we were to pick a killer rehab off, right out of MLS on day 3 after arriving. Reality is setting in now, its going to be way more difficult to find juicy deals here. I’m sure I can pull it off, after all we have no choice. There are several avenues I have to chose from, one being to chase down the 3/2 bank owned properties in MLS that basically just need cosmetics like kitchen, bath, flooring, windows, landscaping and paint. With this model I would be bouncing all over San Diego County for sure. The other avenue would be continue with our specialty which is finding the inner city bungalows which are generally 1/1’s or 2/1’s and very small at around 600 s.f. and do the larger structural rehabs adding master suites to them. I viewed quite of a few of these this week to get an idea what my competition looks like.
Here’s a sweet one in the neighborhood that I like. Checking out the rehabbed homes I was interested to see some of the material choices as well as paint schemes. This one is really cool and new construction but some of the other rehabs really lacked the design sense that I know help sell our houses. One rehab selling for top dollar still had some 1970 aluminum windows left in the kitchen, another had some new concrete steps blocking access to the garage and the craziest of all; the top dollar, king of the area rehab that’s now Pending for $650k probably had the worst prep job for paint than I’ve ever seen. This was new construction addition where none of the blocking between the rafters or siding was even caulked before they painted it. The eaves were raw OSB with roofing nails poking through. I was alarmed to see this quality or lack thereof on the highest comp in the area. A new friend told me I should be happy to see this, and I was: ).
The 4-5 adjoining neighborhoods that I have targeted as my new farm still have a plethora of distressed homes in them. These of course are not for sale nor in MLS. We’ve started to ramp up out direct marketing campaign or what I call “the system” that worked so well for us in San Antonio and have been pleasantly surprisedwith a 10% response rate from our efforts. Doing the big remodels will thin out the competition for me as there are no homeowners to compete with, the newbies just aren’t capable and even the big players don’t want to get tied up in a 6 month rehab because they have to keep their money moving, as its borrowed. For me this works great, we enjoy the larger projects because we don’thave to find that many deals a year and we can squeeze every bit of equity out of them by doing the construction ourselves. The big budget rehabs with big profits are where it’s at so I hope I can end up back in this model. You’re not just getting paid for adding the latest “pergraniteel finishes” but you’re adding real value and forcing the house to appreciate by the additional square footage. Hopefully this is where I’ll land but I cant wait forever to start finding them, so we might have to knock a few lipsticks down in the meantime.
Here’s an example of the diamonds in the rough I am finding. There are some great old houses here, its just going to take time to start getting them. If you are a wholesaler or agent and got one of these, or know of one for sale, please contact me, we pay top referral fees. With all the heavy competition here it apparently has corrupted a lot of the local agents. One Top Producing “bus bench ad” agent would not even accept a full price offer when it was Active in the computer, holding out so she could double-dip and represent the buyer as well. Other agents getting REO’s from the banks seem to magically have a buyer lined up at the same time they get around to putting them in the computer, very discouraging to see such unethical behavior. Short Sales in San Diego are all the rage, its easy to get a list of everyone who is upside down in the mortgage and then contact them and offer to help. You don’t have to be an agent to negotiate with a lender on behalf of an upside-down homeowner. Once you get a low offer accepted you sweep in and scoop the deal yourself for rehab. Being new to town I’m being very picky on what we write offers on, it’ll be interesting to see what direction we end up going. You have to stay flexible as an investor and change your strategy for the current market conditions but we aren’t giving up so quick and bowing down to a cosmetic skinny deal yet!
We are in San Diego now! Over a 10 day period I drove from San Antonio to San Diego twice, bringing 2 work trucks, a 26′ UHaul and the family SUV. The trip takes about 18 hours, it was way more difficult to get out of Texas than it was to go there but well worth the effort now that we’re back. Pulling into San Diego was the best feeling ever after our 4 year hiatus but unfortunatley we were blindsided with disgusting conditions at our house which had been rented in our absence. The place was so bad we had to clean, paint and repair things for 3 days before we could even unload the truck. Not what I was hoping for after the huge move. It was all worth it now and we’re busy settling in, hopefully soon we’ll be writing offers and landing some deals.
There are tons of bargains on San Diego Real Estate right now and a lot of investor activity and house flipping. All of the deals I’m seeing here are cosmetic rehabs, mostly bank owned stuff. Not to say that we wont get back into some room additions and huge projects but I’ll probably warm up with some light renovations while I build my team of sub contractors. I’ve sent in the application to take my real estate test so hopefully I’ll be licensed by the time we sell our first project. It’s been a crazy move, stay tuned for some updates from the front line as I start to look at potential projects soon.
After 60 days on the market, we sold The Target House last week. We had a flurry of activity right after Christmas and then someone popped up who had actually seen it weeks earlier. Their inspector told me this week he loved the house more even after the inspection and that my quality of work was 2 levels above most renovations he sees even in the nearby pricier Alamo Heights neighborhood. I’m really going to miss this project, its one of our favorite houses. The sale wont close until the end of the month but we’ve got alot of packing to do and loose ends to tie up before we leave town. The 30-day notices were flying last week, one to our tenants in SD and another to our landlord here in SA.
It’s been a great final year for us here in San Antonio but I truly feel we are leaving at the right time. When we first got to S.A. there were tons of other California investors here rehabbing but they fled when the market here slowed and simultaneously CA started to rebound. The San Diego real estate market reached a bottom in Q2 09 and throughout 2010 saw steady home price appreciation up until July where things started to back off a tad. Depending on who’s numbers you are looking at they gained back about 3-8% of the 35% they were down from 2005 peak. I’m sure interest rates will continue to creep up in 2011 and the big lenders will continue to dribble out the REO’s for everyone to fight over but even with the Fall sales decrease I am optimistic that San Diego will hold ground throughout 2011 and then really take off in 2012 if the unemployment situation improves. Of course there is the double dip crowd that sees the opposite and anything is possible. San Diego is on sale right now, and 2011 is going to be a great year there for experienced investors. It’s a perfect storm of higher affordability, low interest rates, tons of bank owned properties that need to be fixed up, decreasing inventory levels, price increases and first time buyers chomping at the bit after waiting nearly a decade to be able to get into the market.
We had tons of fun this year sharing our adventures on the blog and attracted alot of attention doing it. This Spring my blog was voted Top 10 Real Estate Investing Blogs by Biggerpockets.com. This summer I was approached by 2 different production companies to do Real Estate Reality Shows and we completed and sold 2 big rehab high-end projects; The Neighbors House and The Target House. My killer rehab called The Hat Trick House was also featured on the front page of the local newspaper this summer which drew the attention of a local City Councilwoman who called us in to consult on urban redevelopment for the City. Our blog traffic doubled from last years numbers to over 80,000 visitors and my YouTube channel is blowing up. Happy New Year to everyone who’s followed along with us, thanks for all your comments and in less than 4 short weeks you’ll get to see a Great change of House Flipping Scenery from us, San Diego here we come!
I’m sure you’ve heard this before, maybe even from me. “Open Houses dont sell houses, agents just use them to find new buyers.” Although I love this saying, I have infact sold a rehab from an open house before so it’s more of a generalization than an absolute. With this being the slow time of the year we were determined to get some live bodies through The Target House. If we were in Spring or Summer we’d likely have seen some offers by now. This house sells itself, so it’s just a matter of increasing the traffic. To heat things up a bit last week I dropped the price $20k, we’re not playin’ around here guys and San Diego is waiting. After talking to my ad rep at The San Antonio Express-News classified department I learned there was the City-Wide Open House Edition this weekend in which they run color photos of the homes for you both Saturday and Sunday. I had this great idea to contact the listing agents for the other 4 houses for sale in our neighborhood and get them all on board with me and even had the newspaper agree to running our ads all next to each other to increase the impact. Needless to say none of the other agents took me up on it, even for the measly investment of $129.00 for both days. It’s cool, I’ll be drinking a Corona on the beach in S.D. and their listing will still be sitting there unsold. It still amazes me at how slow the local agents are compared to real estate professionals out West, maybe it’s the size of the commission checks, the heat, I don’t know but when it comes to getting something sold why not try everything possible?, especially after what we went through to get to this point. Without the other agents on board I was still able to work some magic and get my ad front and center, smack dab at the top, #1 spot for both days.
The turnout was great, between both days I had about 50 people through, including some agents, a neighbor, a historic home buff and even another prior owner of the home. This guy is probably 80 years old, he actually flipped my house in 1978. He bought it for $21k, his brother built new cabinets for the kitchen, they painted the whole inside white and resold it 4 months later for $42k. Great story. Yet more history from this house, and also goes to show people have been rehabbing houses forever, you just never heard of it until all the TV shows came out. He spoke of missing items which included a huge crystal chandelier that was in the dining room, my bookcase leaded glass doors that are now missing and a built-in buffet with beveled glass that used to be on the dining room wall, all of which are long gone by now unfortunately. We have another showing already scheduled for Monday which I have a suspicion could be an open house attendee coming back with their agent for a second look. After all this work in getting people through the house it’s important to have them leave with something, a little momento if you will. I made some quality color glossy card stock flyers and attached the mls printout and floorplan to the back to ensure they had something to refer to, and all the info they needed, if they were the slightest bit interested in buying. This is another tool I dont see getting utilized here by the agents in Texas. All in all, the open house was great success, tons of incredible feedback as everybody was just floored by the remodel and getting 50 live bodies through the house might have just givin it the exposure it needed to get something in writing soon. Thanks for following, here’s some parting factoids for you to ponder:
The Target House has been on the market for 22 days now and it feels like I am in some kinda weird holding pattern. No landing, no taking off, just holding course. As soon as this house sells we are moving back to Sunny San Diego so I don’t want to start any new rehabs while we wait. We are sooo excited to move back we can hardly stand it, so its hard not to focus on this sale because there’s so much hanging on the line although its the last thing real estate investors wanna do. House Flipping is in my blood, if I’m not renovating something and using my creative skills I go crazy. To keep busy now we’re working smaller deals while we wait such as the Wholetail House which is due to close on December 15. The San Antonio Real Estate Market stays pretty good all summer but as soon as school starts in September things really slow down. Just like in San Diego, once the holidays start nobody really wants to move so you can easily be stuck waiting for January if your listings don’t sell. Although I totally anticipated this, it seemed we might have got lucky again when several potential buyers returned for multiple showings the first week but we haven’t seen any offers from them yet. The showings were better than average up until last week but now it seems to be tapering off a bit. I’m holding advertised open houses and even hung up Christmas lights so we’re working all the angles. San Antonio MLS has a neat feature where you can perform a “reverse prospecting” search. This allows you to see which Realtors are emailing your listing out and then their clients response if they are interested. As long as I see it getting emailed out, and clients checking interested, we’ll continue to get showings. This wouldn’t be the time to start panicking and dropping your price since there’s way less traffic this time of year anyway but I’ve got some new marketing ideas planned for next weekend that should heat things up.
San Antonio Resale Homes are down 20% when compared to Q3 2009, similar to what’s happening to the San Diego Real Estate Market right now. A lot of this is due to the tax credit which pulled alot of sales forward but I sense a little slowing in general here in Military City USA. The good news is that for this same period prices are up about 8% whereas in San Diego they’ve lost about 2 points. There are 3 factors we’re dealing with right now with the sale of the Target House; the tax credit theft of Fall sales, the usual buying seasonality factor and last but not least the fact that we have a specialty property that’s above the median home price in which the most activity occurs. I always say I only need 1 buyer, cross your fingers that we get him during the holidays and don’t have to wait until spring 2011, after all half of this business is total luck!
Here’s the slideshow showing the entire renovation process of The Target House. These house flipping videos are always fun to watch after I’m done. We are having some good showings over there, some buyers have been back twice already: )
There are many ways to make money in real estate. If you are a regular follower of the blog you know I specialize in major structural rehabs referred to as “Real Estate Merchandising or, Retailing”. Real Estate Wholetailing refers to an investing avenue that is a hybrid between traditional Wholesaling and Retailing.
When Wholesaling Real Estate typically the investor ties up a house under contract after finding a great deal and then scrambles around trying to sell his option, rights, or contract to another party who actually has the funds to close on the deal. Many wholesalers don’t actually have funds to buy the properties but simply act as bird dogs searching out the deals. Good deals always find money. Wholesaling real estate is also referred to as flipping contracts because you rarely ever take physical possession of the property. It’s challenging because since you don’t actually own the property you have a short window of time to line up a buyer who also must have cash to close the deal. Flipping REO’s is common as well and investors find these deals in MLS. Here in Texas the purchase contract actually allows for a option period for up to 2 weeks with as little as $100.00 down. If you write “or assignee” after your name as the buyer you can assign your rights to your third party buyer at the title company. This makes it very easy for wholesalers to tie up deals and then shop them around. In other states like California you would use typical contingencies to let yourself out of the contract and your earnest money would be on the line. Wholesalers typically use bandit signs, buyers lists, Craigslist and other grass roots methods to market their property quickly and try to line up a buyer at a slightly higher price in order to make a profit. A typical wholesaling fee would be around $3-5k but this isn’t much for passing off your deal unless you are wholesaling 5-10 properties a month. In order to find a buyer fast without the exposure of MLS you must have a great deal and pass on the equity to the next investor with a sales price around 55% ARV. This would get you to the 60-70% ARV less repairs that most investors look for. If this is all new to you and sounds great, be careful because if you go around your town tying up a bunch of houses and dont close on them, you’ll quickly get a bad name and the REO agents wont accept your offers anymore.
Wholetailing Real Estate refers to the practice of finding this same deal but closing on it instead of selling your contract rights to another investor. When Wholetailing we like to close on the house quick vs. Wholesaling where we want as much time as possible to find another buyer. You must have the funds to actually buy the house in this case but as the actual owner you are able to put the property in MLS and have way better exposure to potential buyers and increase your net profit. Not all houses make good wholetailing prospects. I look for clean, solid houses in good areas that someone could actually occupy themselves right away. Fixer uppers sell fast in MLS if they are priced right, usually even faster than retail homes. A wholetail house would be something clean enough to live in but priced way below the comps that maybe needs a little TLC. Sometimes its nice not to always butter the houses up with all the latest faux perganteel finishes, and drive retail prices to the max, there’s always a good market out there for solid modest homes at lower prices in good areas.
I bought this house in a great high owner occupied neighborhood here in San Antonio last week for $115,000. It’s a fairly clean original condition 3/2/2 1600 s.f. ARV is $229,000 all day long, so I paid 50% of the value of this home if it was fixed up. My options would have been to rehab it with a new kitchen, both baths, flooring and paint and spend about $40k in repairs in order to sell it for $229k or in this case I am opting to Wholetail the property in MLS for $159k. At this price its a scream of a deal and my phone is already ringing off the hook. Why did wholetailing make sense on this deal? If I were to have rehabbed it I’d have a cash basis of 115+40=$155k. Selling it to a retail buyer for around $225k, paying some fees and closing costs would have maybe netted me about $65k. Wholesaling the deal would have only brought me about $5k. With my Wholetailing method if the house sells for $159k as it easily should, the profit would be around $45k less 2% realtor fees for only spending a few hours on the phone and taking 2 trips over there. With this deal we advertise it As-Is so we dont have to contribute to repairs or closing costs. Additionally, I have way less risk at this sales price compared to a full retail sale competing with all the other homes in the neighborhood. A great exit strategy also exists as I could dump it in a day with one phone call for $125k. If you also figure I don’t have to put $40k in for the rehab, my ROI is also actually higher, holding time shorter and less personal time involved in the deal. Consider wholetailing the next deal you get if it makes sense!
An end to our San Antonio chapter has come… The Target House is done! It’s going to make someone the ultimate urban nest located in the heart of the Broadway revitalization area. It didn’t go down without a fight however, yesterday right before photo time my lawnmower broke so I had to rush and buy a new one. Then on the way back I happened across a guy with a 1923 Model T who by chance was just 2 blocks away from the property, I was so excited to get him over for the photo shoot I dropped my camera. It’s really crazy because a couple of weeks ago I had this idea to include an old car but it didn’t materialize until the “day of ” and then it literally fell in my lap. Needless to say we postponed the shoot one last day and had the guy bring the truck back, so early this morning I got everything handled and it’s now officially done and For Sale in MLS for $399,000. Any serious preapproved buyers should call me at (210) 388-2952 for a private showing. I’ll make a before and after video as soon as I recover and get to know my family again (if they recognize me). I inserted tons of house porn below, please leave me some comments!
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.
Well, it’s been a crazy week. We’ve been in discussions with the producers of the most successful house flipping show ever on TV. Our regular online followers will remember another group had already contacted me earlier this year as well so this makes twice now and everyone is noticing our work!
As it turns out there is a brand new flip show in the works for next year with a familiar format. They are picking 4 teams and will start filming 26 episodes as soon as February to document the trials and tribulations of these flip crews. We were referred by our friend Joshua Dorkin over at Biggerpockets.com after making his Top 10 Real Estate Bloggers list earlier this year.
After providing tons of info on our business I was asked to complete a detailed questionnaire and film an audition tape as well as pick my cast members who would appear regularly on the show. As you guys know we aren’t a big home buying organization, I act as the investor, contractor and realtor all in one so there’s really nobody challenging my decisions on a daily basis.
Reality shows need drama to keep their viewers tuned in, at the end of the day I just had to pass on the whole deal because I’d be trying to create drama that really doesn’t exist . Don’t get me wrong, it’s not all smooth sailing with our house flipping business but producers need big time drama between multiple loud personalities to carry a TV show.
Take for instance our favorite show right now, Flipping Out. Flip or Flop is great too. Back in season 1 there was way more focus on the houses, materials and job site footage. This season they’ve introduced way more characters and its virtually all interpersonal interactions with dramatic side stories leaving literally nothing about the projects or flipping anymore.
Thinking back about the first seasons of Flip This House and Property Ladder leaves us yearning for “real” flipping reality shows to return that cover more of the nuts and bolts rehabbing stuff. Maybe we’ll get approached for something with a different format that fits us better. We’re keeping lines of communication open and maybe we can be considered again and 3rd time will be a charm.
Big thanks to these producers, Josh Dorkin at Biggerpockets.com and everyone who’s noticed us and follow along with our online fans!
As my hardwood floor guys got started sanding this week they kicked me out of the house so I was relegated to landscaping duty. I called my good bud Dan who’s always happy to give me a hand when he’s between projects so together we really got the neighbors talking. After finishing the fence project and multiple dump runs we finally got to the fun part of laying out the beds. I opted for river rock on this house for several reasons, one being that there are alot of neighborhood cats that evidently have claimed rights to my yard or possibly even get a kick out watching us wipe our feet off, so I didn’t want to make it easy on them with big new mulch beds. Additionally the river rock goes really good with our style home, in California we would have also mixed a few palms for a tropical bungalow feel but of course that’s not possible here in South Texas because palm trees wont survive the freezing winters. After then laying the 4 pallets of St. Augustine sod down Thursday, our welder showed up and installed another sizzle feature for the property, our solar powered automatic driveway gate. No electrical connections here, a solar panel on top of the gate charges the battery which operates the gate motor. This is such a cool feature and will pay off huge for potential buyers.
Always wanting to change things up a little, I decided to go light on my floor stain as recently we’ve done several rehabs with very dark wood floors. The issue with going with a light color is that it will show any past pet stains. My floor guys brought a new product that I wasn’t familiar with, Zinsser Wood Bleach. It comes in a 2 part kit and after following the instructions we watched the old stains bubble up and disappear. It seems to work killer except it took a bit of the red tone out of my red oak wood floor as well but he assures me that when he comes back down with the new stain he’ll be able to play with it a little and hide most of the variations. I cant wait to see the floors done, remember I put down all new wood in the kitchen and back through the addition so they should be gorgeous. The shower glass and appliances arrive next week pending floor completion, stay tuned for more fun!
I’m getting close now so I’m feeling a bit relieved. Even with ongoing rain delays I’m making progress. I installed all the electrical fixtures and this time I spent a little more on Craftsman Style sconces for the porches. Really worth the extra money, check out Lumens.com for some killer stuff. The house numbers and mailbox are from Restoration Hardware again. I replaced the front door with an extra gem I’ve been holding onto after acquiring it from the Hat Trick House last year (some of these old bungalows come with 2 front doors and I always remove one to modernize the floorplan). I’ll paint it my same brown color when I second coat the porch. This Pine, 6 panel, beveled glass door came from renowned San Antonio developer H.C. Thorman’s personal residence in Mahncke Park that we flipped, it was the first house he built there in 1900 and appropriately on Thorman Place. It looks right at home on our project and seals tighter than new with a modern threshold and new weatherstripping all around. A building envelope test will be coming our way shortly as part of new code changes this year in order to pass final inspections, so the house can’t be drafty.
The 2 ceiling fans on the porch are a nice added touch. Just makes you want to pull up some chairs and have a cold beverage. As you can see I am flying the” Tarrant Realty ~ Coming Soon” sign in the window, we’re getting some warm bites already. I’ve weeded the yard and we’ll be laying out some river rock beds and putting down sod this week while the floors get refinished.
This door knob is older than you, unless you are 111 years old. It’s the original from our 1900 door that I refurbished. Note the modern weatherstripping, this thing shuts like an airplane door.
The tile job kicked my butt but was worth the effort. The hall bath was fairly easy but this master bath stand up shower and tub box seemed to go on for an eternity. I used white subway tile, river rock floor and a modern white/grey marble accent liner. The shower is tiled inside and out and all the way to the ceiling. Custom frameless glass for the door and picture window are on order from Thad Ziegler Glass. If you guys are flipping houses and not putting shower doors on your new showers at least give them a cheapo, so many times I see all this fancy tile work and expensive fixtures in a brand new bathroom with no shower door. It ranks right up there on my pet peeves list with no rods or build out in the walk in closet.
The see thru fireplace in the master is my sizzle feature on this project, while the tub side of the fireplace is surrounded by white ceramic to match the bathroom, I chose white and grey marble for the master bedroom side. Very romantic to say the least and all with a flip of the switch. There is a direct line of sight from the master bed location through the fireplace, and to the spa tub and into the shower. It’s sure to keep the fire burning in the future owners love life.
Good fences make great neighbors. In this case we have really cool great neighbors already but its very common with the older neighborhoods not to have good fencing. Part of my business model with redeveloping these urban properties is not only to give the potential buyer a complete package but also make them feel safe living close to downtown. A 6 foot privacy fence and automatic driveway gate (coming soon) usually does the trick. Any attorney, doctor or young professional could feel safe here and these are our target clients. My friend and I rented a hydraulic auger and jackhammer and it still took us 2 days to dig the 20 holes for this section. Nothing comes easy in the South Texas heat. A menagerie of rocks, roots, glass, and ancient plumbing were thrown our way but nothing can get between a cowboy and building his fence.
Another sweet milestone..On Saturday with the help of a friend we picked up and installed the granite and marble slab countertops in the kitchen and both baths. You can see in the pic I still need to install the backsplashes, but we got all the tops in and the bar top server on the kitchen pass-through. I went with Absolute Black for the kitchen to contrast the white cabinets. As a general design rule in rehabbing you always go dark, light, dark or the opposite in the kitchen meaning: dark floors, light cabinets then back to dark counters. The opposite would be light floors, dark wood cabinets then light colored counters. I think the black and white with grey walls looks real crisp and modern while still period sensitive, you can’t go wrong with this combo. Any future homeowner could switch out the wall colors and anything would still look good. Another flip tip to keep in mind is that you must have good lighting in the kitchen if you want to do black counters, but in this case we have under cabinet lights pre wired and with recessed lighting, abundant natural light and the pendants I’ll be hanging over the bar it won’t be an issue. Black counters can make a room look small as well but since I’ve opened everything up it works for me. I chose White Carrera Marble for the bathrooms, it looks a little more feminine and with the grey veining through it, ties in perfectly with our wall color. This is the first time I’ve used the white marble and I’m loving the way it looks. I cant wait to see it with the white sinks and chrome hardware.
I’ve received a lot of reader mail over the years asking about how I get my granite for so cheap. We started doing this method back in California, the granite industry has been revolutionized for people in the know. Yea, you can still pay $40/s.f. to the big dogs in town or mid $30’s to the big box stores for granite slab but this method gets er’ done for under $12.00 per square foot. These 8′ x 24″ slabs are pre-fabricated in China where labor is cheap and then shipped to the states. The material still comes from all around the world but it’s sent to China to get cut down, polished and bull nosed. For an 8 foot section I am paying $160.00. That’s $10/ square foot, then add a couple more bucks for materials and it still ends up pretty inexpensive.
Ask around for “pre fabricated” or “pre bullnosed” granite slabs. They always come from China. When we first moved to San Antonio you couldn’t get them here so we’d drive to Houston to pick then up. Here in San Antonio the company who carries them is called Builders Mark . They have about 30 colors in stock to pick from as well as bar tops, peninsulas, backsplashes and islands. You still have to put them in yourself, maybe I’ll do a “how to” video for the DIY’ers out there one day. They sell to the public but also give contractor discounts. Real stone slab counters boost the resale value of your rehab, along with stainless steel appliances, granite countertops are top of the wish list for homebuyers in today’s market.
One deal I found early this week in the middle class neighborhood of Linda Vista was listed at $168k. It was a great little 50’s rancher 3/3 with a room addition. I pinned the ARV at $299k. It needed complete kitchen, 3 baths, paint in and out, windows, stucco, flooring, and landscaping. I estimated my rehab budget around $60k, it looked real good so I wrote an offer of $172k hoping to grab it quick. This bank only lists their properties on a website, you are not allowed to submit offers via fax or email. Its like the EBay of REO’s.
