Even with the short week we still managed to get a lot done. The plumber is almost done now and I had the hvac guy come through and he roughed in the whole house in 2 days. I installed a Goodman 70,000 btu central heat system only with all new ducts. It was a breath of fresh “air” not to have to do the full central air system because in most areas in San Diego you don’t even need air conditioning. These guys don’t mess around in this town, he rolled in with 6 helpers and they knocked it out. What a change from “Land of Manana” as we called San Antonio, where most workers only did the bare minimum, never showed up and just squeaked by since the cost of living is so low there. Thanks to my buddy Curtis Gabhart from Gabhart Investments for the referral! Check out his site if you want to see how the big boys are rehabbing here in San Diego.
I always bring the hvac sub contractor through second, then finally my electrician will come Monday and start with my 200 amp rewire and new service. The best news all week was that I finally appear to have approval from the Historical Review Board. The City Planner emailed me late Friday and said I could come pick up my plans. My project has been under review for over 4 weeks now, luckily they stamped my structural and mechanical plans right away so I could get started. If everything was approved then I officially have the permit and I’m free to start calling for inspections and can move forward faster. I’ll call for the foundation inspection first so he can check our forms and rebar, then we can pour Wednesday. Next I’ll call in for framing inspection so I can then put the roof on. Finally I’ll call for rough-in inspections on all 3 trades so I can then hang insulation and drywall the house up. It seems like a lot but I’m really not that far away from getting it sealed up.
I was a little surprised about code differences between here and in Texas, seems with all the regulations here in California they would be a little more strict on the duct work but evidently you don’t even have to put “pookie” on the registers or plenum. In Texas with the summer heat they were really strict on the system install but then again this is heat only and no a/c. Right now it’s 68 degrees and sunny. Sorry, to my friends in San Antonio already sweating in 100 degree, 80% humidity.. its going to be a long summer!
The San Diego Real Estate market saw some price slippage, in May there was a 4% decrease from year-over-year prices. Nationally, the 20-City Case Shiller Metro home prices are already in double-dip territory but we aren’t there yet even with the large decrease. I attribute most of this to the artificial market and tax credit last Spring, if the government would just stay out of everything and let the markets correct naturally I think we’d be in a better place. Here’s a good article by Rich Toscano over at Voice of San Diego.org.
House flipping tip of the week: Finding good contractors is a huge key to your success when flipping houses. There are 2 kinds of contractors, General Contractors, or GC’s, and Sub-Contractors. Most investors hire a GC who then brings in his own sub-contractors, oversees all their work and tacks on about 30% to your price.
This works great for people who have little construction knowledge or don’t want to spend the time ordering materials, checking in deliveries, writing checks on Fridays to subs and overseeing work.
My feelings are that most investors are doing this anyway and basically acting as their own GC, so shouldn’t be paying for one. Homeowners these days are even acting as GC to save the 30% and hiring subs themselves while building their new home.
There’s even a national company called U-BuildIt that sets you up with the list of subs for a fee. So, the key to the savings is finding the subs and managing them yourself. (more)
Another good tip for flipping is the get a mentor who can help you and you will fast track your career.
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.
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.
The skies cleared and the inspection gods have blessed our project. Finally, we passed all 3 rough-in inspections. We had to have the mechanical inspected twice and he almost failed me the second time because I had the incorrect tape on the joints of the dryer exhaust vent. The correct taping for the seams is the UL rated aluminum tape with the red letters, same as the A/C guys use. After some word games and a battle of the egos he busted out the green card much to my relief. It always seems the young inspectors have such a chip on their shoulders while the old guys just roll through, pass you and start talking sports and telling stories. Since I pulled the main building permit myself as the owner/builder then I am in charge of the next 2 inspections. First I’ve called in for framing inspection Monday for which the City of San Antonio will look at the placement of the fixtures with relation to each other, framing and construction as well as fire blocking of all penetrations from wiring and plumbing and foaming of the windows. Once I pass this framing inspection Monday I’ll be free to hang the insulation and call in for insulation inspection for Tuesday. If you hire a company to insulate your new construction they will furnish you with a certificate that will satisfy the city but because I am such a penny pincher I hang it myself which thereby requires them to come inspect. I buy the insulation wholesale saving about 30% from what Home Depot or Lowe’s charge. Once I pass insulation inspection I am finally free to drywall! Yea buddy, whew! You’ll also see on the video update that I’ve trimmed out the front porch and removed all the kitchen hardwoods due to old water damage and poor patching. I need to get the new wood patched in also before drywalling the kitchen but that won’t take long. The original wood floors in my house are red oak, which is still available through lumber liquidators for .45/ foot. All 330 feet of wood I am replacing only cost me about 700 bucks. Once the floors are refinished you wont see the patches. I am planning on the dark walnut stain again since they seem to be so trendy now. Stay tuned; next time you see the house it will be all sealed up. It’s a big milestone, what was previously stick framing all of a sudden becomes recognizable defined spaces.