New regulations from the City of San Antonio with regards to my mechanical permit tripped me up this week. Turns out there are several new codes that took effect January 1, 2010 which affect new central air conditioning systems in remodels. San Antonio is now requiring a duct blast test to be performed by a third party licensed mechanical contractor. After having my new system installed and inspected for rough-in we had to bring in another contractor to test the duct-work for leaks. Since you would never know if there were any leaks until the system was turned on at the time of final inspection they have come up with this cool way to test your contractors work before you hang the drywall.
A fan is connected to the return air box and all registers are sealed with tape. They then crank up the fan and measure at one of the grills for pressure. The fan measurement vs. its affect on the duct pressure determines efficiency. Any leakage is shown on the computer and would indicate a loose seal somewhere that may need more tape or “pookie.” Before this technology existed we would wait until passing final inspection, turn the a/c on and manually feel around the joints for cool air. Leaks in your ducts cost big bucks on utility bills, especially in hot climates like Texas. If you are remodeling a house its now mandatory to have this test performed, the results are sent to the local power company CPS, and you wont get your electricity turned on without it. If you haven’t checked your system lately it might be worth a trip to the attic, one neighbor to a rehab I did asked for my help last summer. Upon inspecting her system my A/C guy saw that she was losing all the cool air into her attic as the tape from the coil/furnace had come completely unglued. Today we passed the duct blast test as well as rough-in for mechanicals.
I picked up 1200 s.f. of hardwood flooring last week from Home Depot and we got started putting it down. On a full gut rehab I always put down the new wood floors before hanging drywall (if they are unfinished).
We patched into the dining room, staggering the joints and have run the new 2 1/4″ unfinished Red Oak all the way through the kitchen, utility room and we are half way through the master bedroom. In the old portion of the house the wood nails right to the floor joists but in my new addition it nails to the plywood sub floor with some felt paper in between as a moisture barrier.
Most of the Craftsman Homes in San Antonio originally have Red Oak flooring but occasionally you’ll see Long Leaf Pine used and especially in kitchens. After some deliberation I decided to have all hardwoods in my master suite instead of using high end carpet for the bedroom and tile for the bath floor.
On the last couple of houses I used carpet and didn’t really hear any complaints but these Arts and Crafts style homes are really all about having hardwoods throughout. By the time I looked at what I would spend on the carpet, tile and installation it made more sense to just put down all wood and I’ll end up with a way finer product.
Like the last house, I’ll even run the hardwood floors through the master bathroom which got great feedback and will really give my new addition some character. I usually buy this flooring at Lumber Liquidators for $1.99/s.f. but their price went up to $2.89 now.
Home Depot has it for $2.39 plus I got a little bit more off the order since it was over $2500.00 we got to send it to the bid room. I’ll still have to have these floors sanded and refinished with the rest of the house once the renovation is complete but on the flip-side putting down a prefinished engineered wood just wouldn’t give you that old house feel.
I’ve been doing extra dark stains like Dark Walnut & Ebony on my last few projects but for this house I think I am going to go lighter with Golden Oak just to change it up.
The dark floors are really trendy right now and very dramatic but they get so dusty and are a nightmare to keep clean during the period the house is on the market for sale. When the flooring got delivered the driver didn’t show up until 7 o’clock. Wouldn’t have been so bad but he dropped the pallets curbside so I had to lug all 63 bundles up 15 steps myself after a long week.
Here’s another item that I always do before the house gets drywall, I install all the HardiBacker in the areas that I have planned for tile. In the hall bath (not shown) I am doing the floor and tub surround. In the master bath pictured here I’ll do the entire new shower all the way up, inside and out of the 9 foot walls, and the box for the spa tub with a mini surround.
Before the backer board could go up I had to do the shower pan. I use the rubber membrane and a dry mortar bed and slope to the drain. It takes about 2-3 hours to complete. The backer board is easy as well, it cuts great with a skil saw and goes in with tons of screws.
You want a real stable base so your tile job doesn’t crack. I’ve seen some remodelers using that blue board the sell at Lowe’s, don’t do it, your tile job will crack in a few short months! That would suck to have your flip on the market for sale and a tile job start cracking. I’ve seen it happen, multiple times. Always use 1/2″ HardiBacker and screw it down, even if the guys on DIY Network nail it.
It was nice to get in a full week on the project now that the other house sold. I finished up the front porch by making new stairs and replacing the siding skirt where needed. We got a comment from Mike asking what I was going to do about the column base overhanging the porch floor, I’ll just have to live with it as its only over by a few inches and doesn’t strike me as really looking that odd since they overhang the top too. The posts that hold up the porch are existing 6X6’s. Their placement was really far out to the corners so in order form me to have the tapered columns I had to have the bases hang over the floor a bit. If I had gone back with just square posts I don’t think it would look as cool so I’ll live with it. The 16 degree flare on the skirt looks real cool with the 117 siding.
My firebox arrived this week as well so I got to install it. Of course the dimensions I got online for the rough-in framing hole didn’t work out so I had to reconfigure this wall a bit on the fly. It’s a double sided see-thru gas fireplace that I’ve put between the jacuzzi tub in the master bath and the master bedroom. Locally you’d spend $5,000-$8,000 for something like this even at a wholesale builders supply so I was excited to find them online for $1295.00 from Ebay/Discount Fireplace Outlet. With the vent pipe and everything you need, the total including tax and delivery was about $1800.00. It’s easy to put in, once you have the box framed in there’s just one gas line that I’ve got coming in underneath and then the vent through the roof. The unit doesn’t need electrical as there’s an ignitor and low voltage switch that you mount on the wall. This is a real cool feature for what I spent, we’ve designed the whole master suite around it, can’t wait to see it with all the tile around it and the 6′ tub in.
I found a new HVAC guy last week who’s already got started roughing-in my new 5 ton central air/heat system. It’s a horizontal gas furnace of course (electrical is not smart energy) with a A-coil like I always use. Since this house is so long we’ve got a real long supply trunk line with 11 drops and 3 return air grills. Yellow Page retail prices in San Antonio for a total new install like this would run over $2,000/ton, or $10,000. My regular sub-contractor was bidding $6,500.00 for this house which equates to $1,300/ton. Like I’ve mentioned before, it’s common to experience price creep with subs, you always have to keep hammering them or switching because they slowly raise their prices on you. So here’s the good part; my new guy is only charging me $4400.00 complete. That’s only $880.00 per ton my friends! I’ve already turned him on to another investor friend of mine, this guy is hungry for work and I saved over $2k by shopping around and walking away from old faithful. In my business any savings along the way goes straight to the bottome line.
San Antonio Home Sales of single family residences were up 20% in April when compared to the same month in 2009. Great news but undoubtedly this is directly reflective of the Federal Tax Credit that’s now expired. In typical cheerleader fashion, the San Antonio Board of Realtors has come out to predict “these home sale increases should hold through the Summer” although I have different thoughts..especially knowing that mortgage applications are taking a dive in May.
Chalk another one up for the history books. After 66 days on the market, 27 Realtor showings, 6 offers, 1 backup offer and 3 deals that fell apart , we finally got er’ done. TheNeighbor’s House sold yesterday for $367,500.00. This is the highest sale in Mahncke Park to date, trumping our last record with The Hat Trick House at $340k. This is huge by anyone’s standards as theres never been any other sales over $300k. We’ll spare everyone the gory details out of respect for the parties involved since the entire neighborhood has found their way to my blog by now. The real estate market has slowed a bit from last year in our area. Year to date there have only been 3 sales in Mahncke Park including ours while last year there were 7 by now and 12 total. Compounding the issue are the higher inventory levels this year, there are currently 13 houses on the market with an average time of 136 days, compared to last year where there was never more than 2-3 active at any given time. This was probably the craziest sale we’ve had as far as drama goes, it’s just a real weird market out there right now. We paid $150k for this house originally so this investment had a textbook spread, but dont worry it’s not all profit when you take into account the big rehab budget that it took for the transformation. Looking at the data would make anyone else feel lucky for selling their house but we had buyers lining up for our creation. Thanks to everyone who helped out with this great project and to Morgan at DeWitt Architects for the killer facade design and color palette. A big congratulations to the lucky buyer, we know you’ll have years of great times in the lovely home.
It’s often been said that a buyer decides whether or not they like your house within the first 30 seconds of pulling up in the driveway. What I’m talking about here goes way beyond curb appeal. We are selling house fronts my friends. Not sides, not backs, not baths, not fences and not kitchens although all that has to be dialed in as well. What sets the hook in your buyers lip is what you do up front. All those other items just help you reel them in once inside. I’ve given this advice multiple times to other flippers; you must focus on everything up front and at the door area because as the agent is typically fumbling around with the lockbox to get the keys, your potential buyer has time to really study your work. With this in mind I stayed busy this week rebuilding the missing front porch columns, they are a very important feature of this house and if done correctly can really enhance the homes other characteristics. The big front porch on this house hooked me from the start although it was missing the original historic columns. Instead of rebuilding the style it came with I opted for square tapered historic house columns to tie in with the interior columns in the dining room. The driveway was really narrow before but with my new design I gained about 18” under the Porte Cochere. You know those old Model T’s had no problem rolling through there, but the Soccer Mom SUV would definitely be a tight squeeze. Before building the new columns I had to first jack up the structure to level it and replace the 4X4 supports. The new columns are essentially cosmetic and hollow with all the weight sitting inside on the posts.
My electrician spent 4 days at the house this week as well, for those of you who are regular readers you’ll remember that he is the lead singer in a Judas Priest cover band here in San Antonio called Sad Wings of Destiny. He’s a blast to work with, not only is he a great master electrician it’s cool when he busts out singing to the classic rock we listen to all day. Adam Lambert aint got nuthin’ on my boy Rick. Thursday’s temps got to 100 degrees; in the attic it was an easy 125. I told him if I didn’t hear him singing I’d come up and check on him. It’s serious business working in a Texas attic if you are a contractor as there’s been a lot of accidental deaths, always make sure you are working with a helper in case you pass out. Total cost for complete new electrical including 200 amp service, meter loop, sub panel, 28 recessed can lights and permits: $4200.00. Fixtures not included. Another great price, this job is easily worth 8k retail. We should be calling in for rough-in inspection early next week.
We passed plumbing rough-in and top out inspections this week at Target House and have now got started on the electrical. My electrician is getting a slow start so I am kind of disappointed but its par for the course here in Land of Manana, especially when you are getting great prices. I am going to stay on his ass all week and try for an inspection Friday. On the exterior I am completely done with all the siding and window trims on the new portion of the house and have started working my way forward replacing various sections on the original siding where I moved windows or there was damage. There will be alot of changes once I get up front rebuilding the porch, porte cochere and columns so that’s exciting. On the new back porch ceiling I used authentic 1×4 tongue and groove bead board, sweet!
The San Antonio housing market certainly showed signs of Tax Credit fever while everyone scrambled last week for the handout. I’ve been tracking the Pending sales and as you can see they rose by about 100 houses for each week in April all the way up until the cut off of Friday. It will be interesting to see 2 things from here, if the Pending sale growth continues and how many pendings actually close and turn into solds. The San Antonio Spring buying season typically is just now heating up, we’ll see how bad the tax credit affected future demand shortly. There are currently 11,455 homes for sale, down from 11,697 last weekend.
This is the last big weekend before the Federal Tax Credit expires on next Friday, April 30 so we are now in what I consider Last Call for this years hottest real estate sales period. Undoubtedly we are pulling future demand forward as everyone looking to make a purchase this year will try and have something under contract by next Friday. As many folks work during the week , today and tomorrow will be the last chance to get out and find something. The question remains though, what will happen to the real estate market after this credit expires? San Antonio will be o.k. but I’m not sure about less stable markets.
Sellers should be extremely cautious accepting offers this week as many buyers out there are simply not qualified, even if they are waving a “pre-approval” letter, as I personally found out several weeks ago. To get the $8000 back you just have to purchase an $80,000 house so we arent talking about the strongest buyers out there anyway. Couple that with a buyer going FHA and asking the seller to contribute 6k in closing costs sends up a red flag to me that they don’t even have the 3% to put down. Buyers not having any skin in the game simply shouldn’t be allowed to purchase a house in my opinion. It’s been said that some buyers are even tying up several properties at a time to make sure they get one that sticks so they get their free government handout. In this case the other sellers will get left out to dry with their properties going back on the market after the tax credit expires and in what could be the slower summer months. How many of these tax credit sales will wind up being next years foreclosures?
Neighbor’s House is under contract again, we had a back up offer so when the last buyer couldn’t arrange financing we went to plan b. Maybe 3rd time will be a charm, someones eventually going to be the lucky homeowner with the Coolest house in Mahncke Park.
Neighbor’s House Back On Market today!!!! Arrrrggghhhhhh! This has never happened to me, have a house fall out twice. This time we had it sold to a lady who was going VA. We made it past the home inspection, then the VA inspection and finally it passed the VA appraisal last week. This morning we get a call from the buyers agent stating that her client was turned down by the VA underwriting for not having the last 3 years tax statements. What idiot mortgage broker writes someone a “Pre APPROVAL” letter w/o checking tax returns???? These things arent worth the paper they are written on in todays market. Supposedly he thought since she was putting 20% down it wouldn’t matter. Dear Mr Mortgage broker, this isnt 2005 buddy, buyers need to state their income these days! Between incompetent mortgage brokers and an overzealous home inspector claiming my brand new 30 year roof had a life expectancy of 20 years and my brand new 16 seer A/C is 2-3 years old, nothing seems to be going right on this deal. Oh yea, my brand new gas hot water heater is also 2-3 years old according to this brain surgeon. Over at the other house the plumbers are almost done, they are shooting for an inspection on Wednesday. Stay tuned for more drama.
The new plumber got started mid week at The Target House and is moving fast towards the rough-in inspection which should probably happen Monday. I am impressed with the guys on his crew, they are very detail oriented, we even addressed the baseboard height so the water valves for the toilets will be at the right height. I am running 8″ high baseboards again on this project to mimic the houses original design so this puts the water valves higher than usual. All the new Pex lines are ran and as you can see he brought all new pvc drains and tied them in under the old existing bathroom to the main sewer line by removing the old cast iron stack. This is the right way to do it, we aren’t trying to tie into anything old so there wont be any problems for the new owner. I had also asked him to minimize roof penetrations for the plumbing vents. Every drain needs a vent so a lazy plumber would have poked through my new roof 5-6 times but instead these guys tied all the vents together in the attic so I only have 3 vents visible. I had to put my siding project on hold as its been raining all week, looking forward to finishing it as soon as the weather cooperates and the mud dries up.
The sale of The Neighbor’s House is still looking good. The buyer is using a VA loan and we are currently waiting for the appraisal to come back as this will be the last big uncertainty before closing. I got a call from the apprasier Monday asking a bunch of questions about The Hat Trick House next door, as I guessed they are infact using it as the best comp for this sale. What were the chances of rehabbing 2 houses next door to each other and needing my own comp?
I started getting the siding on this week and have been interviewing new subcontractors for the 3 trades that will be next in line to rough-out the house. I love the historic style #117 wood siding, it gives my projects a real edge over the competition as most guys run HardiPlank on their additions. It cost a little more at about 45 cents a foot but well worth the price for my projects. Its always my goal also to find the best prices for any work that I have to hire out because it increases my net profit. A dollar saved is a dollar earned, right? My DIY method of doing these rehabs does not involve hiring a general contractor who would tack at least 50% profit right onto your cost but instead managing the subs personally and working right alongside them doing most of the work myself. This gives me the freedom to pick my own sub contractors and negotiate with them directly and pocket the savings. As with many of the subs in the past, I started to experience “price creep” with my plumber on every house we did with him. With construction as slow as it is I cant justify paying a higher price for the same job so we give new hungry guys a shot.
Out of the 3 trades I always do the plumbing first, its hard pipe and cant move whereas the electrical and mechanical can work around anything. I accepted a bid from a plumber yesterday that I’m really excited about. He’s been is business over 25 years, does alot of new construction homes, comes highly recommended and has beat our last guys price substantially. We are getting a complete new plumbing system with “15 fixtures” including new pex supply lines all the way from the water meter, new pvc drains all the way to the sewer and complete new black pipe hard gas lines from the gas meter throughout the house to 4 locations in order to qualify us for the “Smart Energy” title. Our local energy company CPS right now is really pushing awareness of using a combo of gas and electric to builders but we’ve of course always done this anyway. They designate your project a Smart Energy House, this combined with all the Energy Star appliances has been a real plus for our customers. His bid also includes supplying the hall bath tub and 50 gallon hot water heater. I am getting a 1 year warranty as well and he wont even let me touch the fixture installation to save money as he’s that concerned about his liability. The price is $5900 for the job where previously we were paying over $7000 and having to furnish the tub, heater and do the trim out myself so effectively I think I’ve shaved about $2000 of this one trade alone. I hope he works out, he is suppose to be all roughed in and topped out this week for an inspection.
The Neighbor’s House is under contract again as of last weekend. We are passed the home inspection and are expected to close at the end of the month. Additionally there is a back up offer in the lurch. I still will share all the juicy details from all the previous offers we received and deals that fell through but not until the sale closes. This house is incredible and someones going to be very happy to own it. What a great project and fun story!
I had a productive week starting out by hanging all the OSB plywood on the room addition exterior, it really starts looking like a house once it has something on the framing. After the OSB I wrapped it with Tyvek, wow does Lowes like to advertise! Its amazing how many local rehabbers I see that dont use house wrapping on their additions. They’ll go straight over the OSB with the siding. For $88 bucks you cant go wrong and it really makes a difference on your electric bill and keeps the drafts out. The windows arrived Friday and I got most of them in along with the back door so now it all locks up again. As you can also see I had a retaining wall built this week from CMU block under the perimeter of the new addition. There was such a deep below grade cavity from my excavation that this was necessary for correct drainage and to prevent water intrusion under the house. I’ll backfill the sides now and we’ll be good to go. Another example of how we are doing things right, some guys would have thrown down some plywood and backfilled. The back porch is really neat, cant wait to see everything now with the historic waterfall style #117 siding on it to match the house.
The original owner of the house stopped by and said that their dad build it back in the 20’s. She’s going to give us all the info on the home and story behind it so we can pass it along to the new owner eventually. I am hoping she has some vintage photos of the front so when I go to rebuild the columns and porch area I can replicate it correctly. While I was under the house this week I found some old moonshine jugs, a 1927 Good Housekeeping magazine and a Texas automobile license plate from 1933. Since last weekend we’ve had 10 showings at Neighbor’s House and more offers as well. Spring buyers are out in full force. Cool stuff, stay tuned …
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: ).
The roof is all complete and just in time to beat this week’s South Texas rain storm. Final tally after adding up the receipts for my spreadsheet is $3998 for labor and materials, an excellent price for 40 squares of 30-year roof including 23 squares of old roof tear-off. Speaking of finding deals I’ve been doing some window shopping for the past few days in search of the best price for dual pane, white vinyl, low E windows for the Target House. I compared 4 different sources and ended up back with my usual supplier Builders First Source here in San Antonio. Sometimes I cringe at putting vinyl windows in an old historic house but with today’s energy prices it really makes sense. After having Home Depot quote it and send it to the bid room twice, Lowe’s quote and send it to QSP, I was still able to do better by a few hundred bucks. For 25 windows I am paying $3340.00 with tax. Keep in mind most of these for the old portion of the house are ESW’s (exact size windows) and are made custom to fit inside existing wood casings in order to preserve the historic qualities of the home. There is a Federal tax rebate for 2010 in the amount of $1500.00 if you spend over $5,000 and the new windows have a U factor greater than .40. This changed from last years requirement of .32 but in any case we wont qualify due to our low invoice price and we didn’t see it necessary to pay an extra 20% for the extra U factor just to get the $1500.00 back. Make sure and check with your CPA if you are a rehabber, there is some great energy efficient Obama money out there for grabs.
For those of you taking notes, I just completed step #4 in my standard order for major renovations.
Step#1 Demo
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 floor plan 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 job site 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 isn’t 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.
