Sam's money pit
Sam Schneiderman, Broker-owner of Greater Boston Home team continues his weekly series:
Last week, I explained how my fiancé and I bought a single family after our three family purchase fell apart: a decision based heavily on emotion. We were desperate for a home and liked the idea of renovating and living in an “affordable” single family. We bought an ugly duckling that had nothing but upside potential. It was 1984; we were young, naïve and had “vision”.
There were no home inspectors yet, so we hired a pest inspector. The rest was up to us. The house obviously needed a kitchen, bath and “heavy cosmetics”. Every interior inch needed serious help.
During the hot, humid “dog days” of summer, the smell of cigarettes and the seller’s filthy dog would haunt us, hastening our desire to get the walls and floors refinished faster to seal out odors. Over the next few years, we methodically finished one room at a time when we weren’t working to earn money to put back into the house.
By the next summer, the house was beginning to look good. We were anxious to work on the kitchen and eliminate the winter draft that blew through it. Fortunately, my father in-law had plumbing skills, and I could do the rest. We just needed time and cash for materials.
We got a home improvement loan. The two to three month project included opening walls, insulating, adding windows and annexing a porch. It took four months. By the time we were done, we were tired, happy and broke again. We got lucky and combined our 12 percent mortgage and 14 percent rehab loan into a lower rate adjustable mortgage when rates went down again.
Perspective:
I now know that there is a right way and a wrong way to buy.
When working as a buyer’s broker with clients that want to renovate, I ask what skills they have, how they’ll pay for it and how much time they can commit to renovating. (A retired relative with skills is also good!) Their answers will determine if renovating is right for them.
Rehabbing a house with children is not a good idea, especially because of lead paint that may get stirred up.
Even if you have skills, you need a solid idea of rehab costs. Will the home’s price plus rehab costs exceed the cost of an already renovated home? Often it will.
Always get permits before renovating. Never pay contractors until permits are signed off by town building inspectors! Keep copies.
Let’s hear from people that have bought and renovated homes or condos:
What was your experience? Did it take longer than planned? Did you contract or do it yourself?
Did it cost more or less than planned? How did you pay for it?
What advice would you give others who are thinking about buying and renovating?
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Sam - I am disappointed in you. I thought you were a fellow maven
Home inspectors existed in 1984. I had done home inspections for clients as early as 1969 .
Sam -
We did a major kitchen renovation two years ago. While we are largely thrilled about the outcome, there are two things we would do differently: Most importantly, trust your instinct about subcontractors. We were not happy with one of the major subcontractors early on since they assigned staff we felt were too "junior" for such a major job, but didn't act on it. We should have.
Second, we missed an opportunity to go more green with our choices of materials, etc. You have to balance your concern for maintaining the value of the home with personal choices, but we should have chosen more environmentally friendly choices.
Save, Save, Save! and then save some more. We are renovating a 1780s home and the projects just snowball. Open one wall, redo floors, redo joists, add sills, add insulation, new siding. Open next wall; repeat above steps. Our initial plan was to move the interior stairs, expand the bedrooms upstairs and add a bath. That part of the project began one year ago May. The projects leading up to that began 8 months before that. The projects following the stairs, no end in sight. Doing all the work that we can that don't require permits ourselves to save money but it still adds up.
Sam responds:
REmaven- You are dating yourself! You may have been a real estate maven back then, but I was still a real estate dummy in my first year with a Real estate license. I didn't know any better. I did have a contractor look at the place, but he wasn't even close to as thorough or professional as today's inspectors. He only told me what was obvious, so I hesitated to call that an inspection.
tk- Great advice! Always go with your instincts. If it doesn't feel right, don't do it!. I also think you always want to maintain or increase your home's value and going green should not compromise that.
Roberta- I think that you mean that renovators can save by doing as much as they can by doing what they can themselves. There is almost always something that a homeowner can do. (Demo, paint, etc.)
DO get a permit for anything that a suspicious buyer might question later. Building inspectors can actually be quite helpful and offer some good advice, too.
Did you also mean that it is wise to save materials to be recycled back into the project at a later date? That could be particularly good advice when renovating an older home. Strip and recycle doors and deleaded woodwork, antique light fixtures, etc.
There is another kind of recycling available, too. Old fixtures, cabinets and countertops can be recycled to others in need by using Craig's list or Amazon.com or by contacting the Boston Building Materials Coop. They are a good resource for renovators looking to buy products at great prices, particularly replacement windows or those wanting to learn how to renovate.
This blogger might want to review your comment before posting it.
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