I finished the 15 concrete piers today for the 435 s.f. master suite addition. There are 3 rows of 5 with 7 foot spacing. After the bobcat grading I dug 24” holes, 2 feet deep with an auger.
At the bottom of the holes I placed #4 rebar in a tic tac toe pattern, 3 pcs each way. Then I filled the holes up 18” with 4000 psi concrete to make the footing. For the pier I placed 2 more pieces of rebar sticking straight up through 10” sonitubes.
I left these 2 pieces of rebar a little high so the sill beams can lay inside them. Finally I filled the sonitubes with more concrete to complete the pier. I have to reflect for a minute on how easy this is in Texas vs. California which has all the earthquake codes and bureaucratic red tape.
The City of San Antonio only requires an Engineer’s approval letter for the foundation inspection of my building permit, (which I pulled over the counter). He comes out twice, once to inspect the hole depth then secondly after the beams are sitting on the piers.
Try pulling a permit in San Diego. Drop off your plans, wait for months and prepare to jump through some hoops! The framing will start on Monday. Stay tuned.
Here’s a good one for the bubble bloggers out there. To illustrate how far the real estate market has fallen in Southern California, our Flip from 2004 seen here on our site “The Probate House” just sold as a short sale for 345k.
We bought it in Fall 2004 for 375k as an extreme fixer and sold it Spring 2005 for 500k. That’s a 31% price reduction off the ‘05 peak. It’s pretty crazy that people were paying 500k for a tiny 1000 square foot 3/1 with a 1-car garage.
You could get a mansion here in Texas for half a million. The buyer obtained a Subprime adjustable loan with 100% financing. In fact, his “creative” realtor/mortgage broker tried to overwrite the contract for 525k and take out the extra 25k at the close of escrow for himself telling his foreign national client it was part of his fee.
The poor buyers almost got stuck with it until our realtor blew the whistle on him and called the DA’s office. He was prosecuted and went to jail for pulling that scam multiple times. I wonder if they confiscated his brand new black Porsche.
Here’s what the house looks like now 4 years later and worth 31% less. At least the palm trees I planted still look good. That’s close to 35% Market Crash in San Diego!
The SABOR 2009 Housing Forecast was recently presented. They do it every year and hold it downtown in the fancy Omni Hotel conference room. All the bigwig Realtors and Builders give their spiel on the San Antonio Real estate market. Remember, these are Realtors painting this picture for us so take it with a grain of salt as with anything coming out of the NAR.
They stated the following in their presentation, which I have posted here on my site. Sales were down 18% in 2008 compared to 2007. Down 23% from peak in 2006. A bright note they claim is that inventory is not however growing.
This seems odd to me because as I drive around all I see are For Sale signs. Fewer sales but less homes being listed for sale with 17,359 units sold in 2008. Months of supply are up at around 8 but only due to the fewer sales. The average days on the market for 2008 was up to 87 and that number doubles when you get north outside loop 1604.
Foreclosures were up 23% compared to 2007. The median sales price stayed flat at around 155k. According to the head honcho’s San Antonio Prices are now stable and expected to stay stable through 2009.
The percentage price change per neighborhood can be found on the .pdf file presentation but most neighborhoods saw about 2% appreciation rate for 2008. There were reports in another earlier that SA was down 4% but that was comparing November 07 to November 08.
In a recent article from Yahoo titled 2009 Real Estate Forecast: Troubles Spread it states that some Texas cities could now also be in trouble like the rest of the US. It forecasts that Houston could drop 8.5% and San Antonio could see price drops of up to 10% in 2009.
The article then goes on to explain how severely damaged markets such as Boston, Orange County and our hometown San Diego could be reaching affordability levels seen before the boom and may level off. My wife ran across a thread on City-Data that asked all the California transplants how many of them would consider moving back now that homes were affordable and back down to 2001 prices. Honey, pack the bags and I’ll load up the tools in the truck!
As always, Location, Quality and Price will be key for our rehabs through the New Year.
No LaDainian tomorrow but we have another LT, Darren (Lil Tank) Sproles. “I’ve played against him and seen a lot of film, I’ve never seen anyone get a great hit on him” – Troy Polamalu.
With the incredible D of the Steelers we have our work cut out for us. The good news is the Steelers don’t run well and can’t score. With only 11 points scored against us at our last meeting, turnovers might decide the game. My prediction 28-17 Bolts. Go Chargers!
We are anxious to return to work soon on The Hat Trick House, stay tuned for regular updates once I get back over there. We want to give a special shout out to another blogger and investor named J. Scott at REIstartup.com.
He and his wife also quit their corporate jobs and moved from California to the Dirty South like we did. I love his site, he shares tons of info, tips, numbers and pics. I can’t get off it. It’s a must read! You can find J Scott in Bigger Pockets website commenting on real estate posts.
Recently we switched gears to the 430 s.f. room addition for the new master suite. It’s a pier and beam foundation and since my lot slopes up towards the rear, the first thing I had to do was to rent a Bobcat and grade down 18 inches.
This will allow for the crawlspace to comply with the building code of having a minimum of 1 foot space between the earth and the bottom of your sill. With the Holidays quickly approaching it’s now time to take off work for a while and spend precious time with family and loved ones. We wish everyone a Merry Christmas and a safe and Happy New Year!
Walk though house flipping video from Tom Tarrant at Green Button Homes in San Diego. Tom Tarrant has 15 years experience flipping homes and is always looking to buy homes as-is and remodel them.
When my wife and I first moved to San Antonio 2 years ago an insurance agent told us the city’s nickname was “Land Of Mañana.”
We’ve found this to be totally true, it seems most workers are satisfied to poke along and only do what’s necessary to keep their family fed and stay semi-busy. Oh, I’ll just finish it tomorrow seems to be the consensus. Since the cost of living is low here there’s really no sense of urgency to get anything done.
Although we do most of the rehab work ourselves there are still sub contractors who we depend on and recently we’ve had our pace slowed down a bit.
The foundation guys disappeared for a week after there was a water leak under the house and things got a little muddy. You can’t lift the house to level it if it’s muddy because the hydraulic jacks will sink on you.
I had the meter off but it turns out it was faulty so some water was getting by even though it didn’t show it. I had SAWS come out for free and replace the water meter so we are all dry now and the guys finally got the house level and are almost done.
The design of the kitchen cabinet layout is complete thanks again to our Swedish friend’s website. Last time we wrote that we had some people email us and ask who our Swedish friend is…for all of you who don’t get that joke our friend is Ikea! Yuk yuk yuk.
The design required us to remove the 3 existing kitchen windows and put one back in with a new location so it’s centered over where the sink will be.
I finished the entire interior framing this week so the new laundry room, hot water heater closet, refrigerator cubby, food pantry, hallways and relocated doorways are all complete. I also patched the wood floors with Red Oak in the areas where I opened up interior walls. Once the floors are refinished you won’t be able to see the patched areas.
We are ready to start on the master suite room addition this week. To prepare for the room addition I had to get a 60-foot pecan tree taken down and then grind the stump down. I got a great deal from some guys to take down the tree but once again they only seemed to want to work half days and spread out a one-day job to 4 days. Getting rock bottom prices from subs is a key to our success but sometimes it slows you down a bit.
The room addition is 29 feet long so I also had CPS Energy come out and move the gas meter from the rear of the house 30 feet back in the yard. This only cost about $200, which I though was surprisingly cheap. They kind of have you over a barrel when it comes to moving their equipment so they could really charge what they want.
CPS is really easy to work with here in SA. They even came out for free when we dropped the big tree and took down the power feed to the house to make it easier and safer.
Here’s how the new floorplan is playing out after our drastic changes. As you can see we’ve opened up 4 main walls with dramatic arches. It has really given the home a more functional layout and brings in a lot more light.
We also got started on the foundation repair which is always 2nd on our list to do after demo. It was important on this project to get everything level before we even start the room addition and it needs to be lifted 3 inches in some areas. The house sits on 38 cedar posts, these posts are actually trunks of cedar trees which is common in this part of Texas.
Each post is 5 feet tall, 3 feet of which is buried in the ground sitting on a concrete pad. Cedar is naturally resistant to termites, however, after 85 years and possible drainage problems the cedar gets rotten as you can see in the above photo.
In order for us to level the house, we are replacing all 38 posts. We had 4 workers under the house digging the holes to pull out the rotten posts. How would you like to have to crawl under the house with only a damp dark 24 inches of clearance and dig 38 3-foot deep holes? These guys are rad.
We started the rehab on our next project “The Hat Trick House” this past Tuesday. It’s one block over from the two bungalow houses we sold this summer. It took two days with 3 helpers to do all the demolition and we filled two 30-yard roll off dumpsters in the process.
I ripped the kitchen and bath down to the studs and took off the paneling throughout the rest of the house. There was no drywall under the paneling so we have a lot to replace. The house also had vinyl siding that was installed over the original waterfall wood siding.
I ripped all this off already as well to reveal the historically correct appearance. I got lucky as the condition of the wood underneath was o.k. I also cut down the loquat trees blocking the cool front porch; we have some great features here to show off with this old craftsman bungalow so you need to be able to see them.
You can’t sell a house if you can’t see it, right?
The house is originally a 2 bedroom, 1 bath with 1450 square feet. There is a bonus sunroom off the master but you can’t technically call it a bedroom since you have to access it through the master.
I designed a completely new floor plan to bring this grand old lady current and get us top dollar on the resale. We are closing off one of the two front doors and will now be using the front bedroom as an entrance and study.
I’ll open the wall between this room and the living room to give more space to the front of the house. I am also opening the wall between the kitchen and dining room and adding a hallway to access the sun room in order to take it as a third bedroom.
For the middle bath I am relocating the doorway around the corner so it’s not visible from the dining room since I am also opening the wall to the main hallway. There is an original room off the kitchen called the milk run, it is a narrow hallway used in the old days for the milkman to leave your milk and eggs inside your house without entering the kitchen.
It’s common to find these interior hallways in older homes from the 1920’s and 1930’s. It’s basically a waste of space and this area will be added to enlarge the kitchen. With the new huge kitchen size I’ve designed a laundry room on the back wall that will be 36 square feet. My wife and I also designed a 435 square feet master suite off the back of the house including new second bathroom with dual vanities, water closet and shower.
The master bedroom will measure 13×15 feet and have French doors leading to a new deck in the backyard similar to the last house. A huge 60 s.f. walk in closet is also in my plans at the back of the new addition. I’ll be matching the original siding to the rest of the house, as this “waterfall” is still available and called #117 siding.
We are entering uncharted waters here by adding square footage to a flip. Usually we only work with the existing footprint and maybe open some walls or raise ceilings at the most. This neighborhood is fetching around $150/s.f. and I can build the addition for around $50/s.f. so adding this master suite should pay off.
We are having a lot of fun given the opportunity to design our own master suite addition. Here’s what my new floor plan design will look like after the complete reconfiguration and added master suite.
Friday I got started with opening some of the walls for the floor plan changes. Since the ceilings are 9’ I am raising the headers up as far as possible to the top plate and adding arches.
Happy Halloween and let’s celebrate! The sale on the Craftsman Bungalow closed today! Yea! This was a really fun project for us; we were able to explore some different avenues through the use of materials and colors that were outside of our normal selections.
It was quite enjoyable working with an older historic house for a change, but there was a real balance to be achieved with trying to preserve the original character but still use our creativity on the design elements. We were really pleased with the end product and already looking forward to the next house with more cool ideas.
We already bought our next project as well. I decided to call it the “Hat Trick House” since it’s the third one in a row in this same neighborhood for us. It’s another cool 1925 Craftsman Bungalow in Mahncke Park and only one block over from the 2 we sold this Summer.
We have a really good feel for the area now and actually just set our own comp. After hearing all the feedback we feel we know what the market is looking for and have some ideas on how to capitalize from this knowledge.
The rehab will start November 15 so stay tuned for more flipping fun this Winter! San Diego homeowners looking for someone to purchase their property just as it is should contact us.
Y’all May All Go To Hell, I’m Going To Texas -Davey Crockett 1836
Looks like Forbes.com is agreeing with the great Texian soldier. As just reported if you want more bang for your buck, head to Texas. San Antonio ranked #1 along with Austin on Forbes.com top cities to ride out the economic storm.
Also recommended were Houston and Dallas. Forbes noted that Texas continues to do well thanks to our Energy markets, Technology and growth in Manufacturing.
San Antonio was among the top 10 cities due to its reputation of where residents get the best value for their dollar, enjoy affordable housing and have promising prospects for job growth. San Antonio also has a huge advantage due to a growing Military community and number of Government jobs.
Homes in San Antonio are also not likely to fall in value due to the slow (non-bubble) growth.
After a slow couple of weeks from the credit meltdown and stock market crash things really picked up. The 7th Annual Mahncke Park Home Tour was a huge success, click here to read the full story.
Within 3 days last week we had 4 showings on our house and 2 offers resulting in a sale. The buyers are looking for a quick close on Halloween, which is great news for us.
The offer that we accepted included financing via a FHA loan. There is an anti-flipping rule that FHA has where they recommend title seasoning for 6 months. Furthermore – for investors who are selling their property to a retail buyer within 12 months of purchasing it, and the selling price is greater than your purchase price, the FHA might ask you to substantiate the improvements you did to the property with receipts, before and after photos etc.
Under some circumstances only a 90-day seasoning might suffice. Make sure and talk to the buyers’ lender to find out exactly what their requirements are before getting tied up in a contract which could result in an extra 30 days before you can close escrow.
There are many buyers in Texas using FHA loans these days because they can get good interest rates and only put 3-5% down. We purchased this house in late April, did a 3-month rehab and it’s been on the market for 70 days so we just luckily will have the closing date 3 days after a 6 month seasoning period.
This rule was put into place to protect home buyers from mortgage fraud and predatory actions. With the current housing market situation though you would think our Government and the Lenders would make it easier on private investors who in turn are getting families into some of these vacant foreclosures, getting loans off the books and simultaneously bringing back property tax revenue. Selling a house can be as easy or hard as you make it. Lenders sometimes have a lot of control over who your buyer will be.
The last 2 weeks have been really quiet, probably due to all the fear out there. This is a perfect time to go low ball some stuff and steal something because everyone is so freaked out.
I spoke with my title agent recently and she said business hasn’t slowed down. Banks are still funding and it’s business as usual for all the people who aren’t glued to the TV or hiding under their couch waiting for the next Great Depression.
I’m sure it’s tougher out there for the people putting 0 down or trying to buy too much house, but they shouldn’t be buying anyway so it’s probably a good thing. I spoke to someone today who went down to the Ford dealer, traded in his truck and bought a brand new one.
No problem getting a loan. Where is the credit crunch in San Antonio? Maybe it’s just on Wall Street. I feel sorry for anyone who had their retirement in the stock market. In other news The Craftsman Bungalow has now been on the market for 61 days with 3 offers so far that didn’t work out.
Next weekend is the Mahncke Park Home Tour so we should get over 130 people through the house.
We got our second offer on the The Craftsman Bungalow. It was $10k higher than the first offer. This is not bad but additionally they asked for over $6000.00 in closing costs so the deal didn’t fly after we countered.
Also this week we were chosen to take part in the Mahncke Park Home Tour by MPNA that takes place yearly, and is coming up on October 19, 2008. Tickets are 10 bucks and it’s open to the public.
The local newspaper also covers the event and showcases some of the homes in their Sunday Edition so we hope to make the cut. Hundreds of people will come through on that Sunday and the neighborhood as a whole will get tons of media exposure so we’re excited. My wife and I went ahead and staged the house this week.
We pulled extra furniture and accessories from our home and bought a few new items as well. It’s now been on the market 44 days so we thought we would step it up a bit, stage it for the Mahncke Park Home Tour and with the furniture it looks really good. Bungalow#2 closes tomorrow, yeah!
We have some good news and bad news. First the good news, we sold Bungalow #2 to another investor after putting it in MLS and getting a lot of interest on it, this is called Wholetailing.
All cash offer, it closes next week and we got the price we wanted. This 2-week deal will net us a 25% return on our investment and all I did was pressure wash it, take out the carpets and mow the grass. We were able to make a decent profit and still leave some on the table for the next guy.
Had I not already been working on a rehab across the street I wouldn’t have run across this deal. It wasn’t on the market for sale, was not vacant, and according to the neighbors the owner would never sell it and I still took it down. This goes to show that perseverance is the key.
Our rehabbed house, The Craftsman Bungalow is still for sale. Although the first offer we received didn’t work out we are still averaging over 5 showings per week. It’s been on the market 33 days now. No sweat, it will sell. It only takes 1 buyer. As long as we keep getting the traffic we are getting, I am not worried.
The bad news is Hurricane Ike hit Houston pretty hard last weekend and flooded my mom’s house so my wife and I loaded up the truck with a generator, fans, water and gasoline and headed over to Houston to help Mom out.
I had to pull up all the carpets as there was about 2” water in the whole house and had to cut down several large elm trees that had also fallen on the home. It’s a real natural disaster, there are no gas stations open, still no power in her home and a citywide curfew imposed until this mess gets worked out.
Galveston got hit a lot harder, my mom also owns a couple properties down there, both of which seemed to make it through with just some minor flooding. Thank God it wasn’t worse and nobody got hurt, houses can always be fixed.
