Monday, August 07, 2006

House 3: Lessons Learned

Each project gives you tons of opportunities to learn, so if you can't find at least some new things you've learned, you're doing something wrong. I certainly got lots of opportunities to learn on this project! My lessons:

Location, location, location! Of course, this is the cardinal rule of real estate and I thought I knew it. In fact, I do know it. Where I was lacking was my ability to properly judge a neighborhood. I knew when I was investigating the property that it was in a low income neighborhood. That means the crime rate will likely be high. I did not expect to be broken into four times! There were several homes on the same street that looked very nice and well-kept and the cars parked on the street were newer models and in good shape, so I thought the area wouldn't be so bad. I know better now.

Repairs. This is a mixed bag for me. I really like the handyman I used. He completed the job quickly, had regular hours, and went out of his way to help me on the times when the property was broken into, even after he was technically done with the job. On the other hand, others have suggested that his prices were a bit on the high side. Next time, I'll do some more research before hiring someone. This guy's service will be hard to beat though.. He was also a licensed contractor, as opposed to the handyman I had used on the last two houses. I really can tell the difference in work quality and professionalism and I'll be sticking with licensed contractors from now on.

I also learned a bit about what to replace. The property had an evaporative ("swamp") cooler in it. It was old and broken, so I replaced it with a new one. But the buyer wanted air conditioning and I ended up giving her some money at the sale to get that installed. I don't have any idea what it costs to install air conditioning in a house, but I'm sure it's cheaper than putting in a new evap unit and then installing air conditioning!

Security. Because of the neighborhood the property was in, I should have paid more attention to security issues. I always made sure all the doors and windows were locked and I did change the locks as soon as I owned the place, but there was more I should have done. The property backed up to an alley and had a double wide gate in the backyard. It took me a couple months before I realized I should put padlocks on that. I'm convinced that went a long way towards stopping the break-ins. Around the same time, I put up some temporary paper blinds in the front facing windows. I also bought two desk lamps and timers and set them in the house so there would be some lights on during the evening. The padlocks, blinds, lamps, and timers are super cheap when compared to the costs of repairing vandalism damage. And I still have the lamps and timers, so I can use them at the next property.

Oh, and just one last time, here's the post with the Before and After pictures.


Anonymous said...

You say you have a good handy man.

Im not an expert or anything but I would rather spend a little more and have the job done correctly and stress free than to save a few pennies and end up with alot of headaches and shabby work. If the price difference is less than 10-15% it may be worth it to consider sticking with your current handy man.

Just something to think about

Trisha#1 said...

You've made an interesting point, differentiating between a licensed contractor and a handyman. Given the grief that Contractor 2 (uh, that's a misnomer, actually, since he's only a handyman) put us through on our House 14, I'm with you on sticking with licensed contractors whenever possible! I'm going to try to do the same thing!

Congratualations on your sale, Shaun! Don't be down that you didn't make a truckload on that one. We're probably only going to break even on House 14, but only because we chipped in months of our own labor! So, you did well in comparison! Just remember--it could've been MUUUUUUCH worse!

Steve said...

Way to go, Shaun. And thanks for posting the details. It's refreshing to get an honest, REAL depiction of a deal rather than the fluff guru's lead everyone to believe happens.

I wouldn't worry too much about getting a huge profit on the backend. With all you had to deal with I'd be happy breaking even. The experience alone was probably worth 100x more than the money you got.

Hopefully the commerical undertaking is going well, too.

Shaun said...

Anon - I completely agree with you. I wouldn't pass over this contractor just to save a few bucks.

Trish - Thanks! Good luck with the retail strip mall! I hope you get it!

Steve - Thanks for the kind words. I try to be as open as possible and to show all the nuts and bolts of what needs to be done to flip a house. It's not hard, but it is detail-oriented and definitely not as easy as the TV commercials make it out to be. No news on the commercial project. I should be getting my first payment any day now.

Nick said...

I have several rental properties and use non-contractor handymen. However I have to keep finding them because the better ones do eventually end up getting their contractor license and charging appropriate rates. So I start with some smaller jobs and if I like the work they keep earning my business. The issue often is that others discover and begin liking their work as well. The time starts to get crowded, the rates start to creep up, and eventually they go and get their license as well. I don't feel bad though because I got the cheaper work for a while and also I helped them build their reputation and move on up.

Congrats on getting this house done and getting out alive.


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