July 12th, 2009
Prior to purchasing Carol, I had my home inspector take a look at the home. I did not have him prepare a written report because with most distressed property sales, it is sold “as is”. The bank was not going to reduce the price if I came back and said, the roof is leaking I want a $10,000 credit. So I saved money since he did not have to provide me a written report and his insight was most useful. It provided me what needed to be done from a home inspector’s eyes. Because when I sell it, you know the buyers are going to have a home inspection and this helps prepare the home for sale.
In addition, on the major renovation projects like replacing the windows, appliances, etc., I did have quotes from contractors before I submitted my offer to the bank. So with the home inspection completed and my major renovation tasks budgeted, it was now time to prepare my budget and my offer.
Entry foyer before renovation
I prepared my budget by room. For example the living room:
· New hardwood flooring with base/trim $600
· Replace window $400
· Paint $50
This helped me in not forgetting things but it proved unwieldy when allocating costs. For example the paint I purchased all at once so to say I used $50 in the living room was hard. Next time I will just have a paint budget and assign all my paint costs to that one category. Also, by using standard measures like square footage, you gain useful information for your next flip.
As with most budgets, expenses are always higher than anticipated. I included a 15% miscellaneous factor to cover the unseens. And I did have some like when I removed the wallpaper, the paper backing on the wall board came off, resulting in me having to drywall the entire walls in some rooms. I was not anticipating this however my “miscellaneous” account was able to absorb this without taking me over budget.
Downstairs bathroom before renovation
In summary, the tighter you can get your major expenses, the better you will be since many unforeseen items will pop up.
Tags: Naperville homes, Naperville real estate, real estate flip, short sales
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July 4th, 2009
I successfully completed 18 hours of course work designed for Realtors and earned the National Association of Realtors (NAR) Green Designation.
NAR Green Designation Realtor
This is the only green real estate professional designation recognized by NAR.
I am trained in understanding what makes a property green, helping clients evaluate the cost/benefits of green building features and practices, distinguishing between industry rating and classification systems, listing and marketing green homes and buildings, discussing the financial grants and incentives available to homeowners, and helping consumers see a property’s green potential.
As a NAR Green Realtor, I have the knowledge and the tools necessary to help clients realize their green real estate and lifestyle goals.
Tags: Add new tag, Green Realtors
Posted in Green Homes, Green Realtors, Naperville homes, Real estate | 2 Comments »
July 4th, 2009
As Carol progresses, there things I have learned that I will pass on so you can “learn from others” and not make the same mistakes.
Construction waste debris is the area that I could handle better on my next project. We filled a 30 cu yard dumpster with debris we cleared from the house. And we still needed another one! You need different dumpsters for construction waste and yard waste. The disposal rates are different also.
The changes I would make going forward are:
- separate the metals, and other recylables (I started doing this later)
- do not cut the landscape waste until you are ready to remove - by doing this you avoid handling it twice
- renting a grinder/chipper and recycling the cut wood as mulch (I did do this however make sure you rent the correct size grinder otherwise it goes very slow)
Renovation requires construction waste disposal
- plan on renting a dumpster at various times during the project renovation
Recycling to use as mulch
Tags: Add new tag, Flipping Homes, My Flip of a Foreclosed Home
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June 5th, 2009
Every home has a story to tell and this home had a very sad story indeed. So my goal is to take this home and create a happy, positive story.
What everyone saw
The first time I walked into the home, I saw the potential this home had. Now all I had to do was to get the bank to accept a price which would allow me to create that happy story. Negotiating with the bank is not an easy task. In a future blog I will go through the negotiations to shed some insight into that process.
To be able to “flip” a home, you need to have the ability to imagine what the home will look like; not how it looks now. Because I can guarantee that in its present condition, it is most likely very ugly and in need of TLC. In addition you need to understand your market; who is the potential buyer and what are they looking for in a home.
What I envision it to look like
For 1316 Carol, Naperville (aka “Carol”, my name for the flip) my market is the first time buyer. In fact I can imagine in my mind the family that is going to buy Carol. Their needs are:
- wanting to live in Naperville because of the schools
- because they have a 5 year old child who will be entering first grade and they have another child, most likely two or three in age
- and because of time constraints, budget, etc., they want a home that is move-in condition
- with up-to-date features like stainless steel appliances, hardwood floors and a nice yard
With this in mind, I start my “flip”.
A very rough palette! lol
My palette, so to speak
Tags: Add new tag, foresclosures, Naperville homes, Naperville real estate, Naperville schools, real estate flip, short sales
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May 25th, 2009
The “FLIP” started months ago, in fact a few years ago when I became a licensed Realtor. I had a desire to take a house that was in terrible condition and see if I could transform it into a home someone would be thrilled to live in.
So here is the journey of one such house; the “FLIP” at 1316 Carol Lane in Naperville, IL.
Exterior view showing the overgrown bushes and lack of curb appeal.
I started this journey by spending countless hours in front of my computer screen scouring the MLS records and looking at hundreds of homes. To be successful in this real estate market, you must do your homework. It is an unforgiving market and mistakes will not be erased by rising home prices like we had a few years ago.
The first choice I had was which community was I going to to purchase my “FLIP” in. I chose Naperville for a number of reasons.
The first is the fact the city continues to rank very high in the MONEY magazine of great places to live. This helps given the number of transferees we have moving to the area they are inclined to chose Naperville as their home.
Second is the schools. People move to Naperville for the schools. There are two school districts in Naperville: District 203 and District 204.
Bushes grow up and if not maintained can over power your curb appeal
There are other reasons as well, such as the outstanding parks and libraries and the downtown Riverwalk to name just a few. When people are unsure or frightened, there tends to be a “flight to quality” so to speak and I felt given this real estate market, Naperville has a much better chance to sell than some of the surrounding communities.
So in summary, one of the oldest truisms in real estate is LOCATION LOCATION LOCATION and Naperville fits this one to a “t”. Next, the insides of this foreclosured home is revealed.
Tags: Naperville homes, Naperville real estate, Naperville schools, real estate flip
Posted in Distressed homes, Naperville homes, Real estate, Short sales and foreclosured homes | 2 Comments »