If you read my first article on Metro Atlanta Flip Story, Finding the Right House you will want to read this one next to get the full feel of this flip story. Flipping is the art of buying, renovating and reselling houses for a profit. I am the Coach.
If you recall we found a three bedroom, 1 bath brick ranch on a nice quiet street with a pretty yard. The neighborhood was nice, and the neighbors were nice. There were hardwood floors throughout the house, a wonderful kitchen with beautiful cherry cabinets (we call that built in equity) and an old bathroom with green tiles that was in excellent condition. The price for this house – $63,000.
Now we have found our wonderful investment property and it was time to go to Home Depot to make some selections for the house. This is always frustrating for me. Putting the reigns on a client so that they don’t try to make a home valued in the low hundreds into a million dollar home is always difficult. There seems to be an inherent desire to give away the bank when it comes to renovating. My customer kept looking at the granite counter tops talking about the “pop” effect that they would have on the house as if this single feature would sell the home. I on the other hand look at buyers as being informed, realistic and wanting great housing at a good price. That means we have to look at the entire package and not just try to “bling” the customer into a buying trance. Now I have been accused of being too practical, however I have yet to get stuck with a house.
Kitchens are important. They need to be attractive, clean, and not give the impression that the first project for the new homeowner is to renovate that room. Updating is necessary. Now in the case of this kitchen we had updated cherry paneled door cabinets in excellent condition. But does this mean we drop at $3200 counter top in the room? This is a small kitchen with a total of 12 feet of counter space. I find the best approach is to put a vision in your head and move forward to try to achieve that vision in the most economical method. We started with laminates. I didn’t find any that would give the room any real valuable improvement. We checked out solid surface materials and they were too expensive. We headed over to tile. Using 12×12 granite tiles will give us the look we are seeking at about $190 dollars. So we will tile the counters. Large tiles on counters fair far better than small tiles. They also have a wonderful look and are extremely easy to maintain. We then selected a tile for the kitchen floor.
We had some significant debate over paint. Do we paint the entire house the same color? My package answer is yes. In the case of this house we have existing tiles in the bathroom to take into consideration, so the only room that would be painted in a different color then the rest of the house would be the bathroom.
Appliances then became an area of discussion. White, Black, Stainless, Almond (bisque). It is very common to have the washer and dryer in the kitchen in the older brick homes in Atlanta. This being said, it is important to remember that washers and dryers don’t come in Black and Stainless at any affordable price. I would hate to develop a look for the kitchen only to have it trashed and then hated by the home owner once they bring in their affordable white washer and dryer. Remember the buyer will be first time home buyers or investors. These are not huge wage earners.
I personally look at a houses structure, roof, storm windows, gutters, and mechanicals first and foremost. This house had all that except the gutters. To me this is was a must on this renovation. The client is still up in the air on that.
We covered light fixtures, faucets, toilets and vanity tops. We even looked at items for the landscaping.
The rest of the shopping trip went relatively well although exhausting. Now to keep the customer from what I call, the nickel and dime creep. That is when you buy this or that $50 – $100 dollar item here and there because it is small money and it will “look good”. Those small dollar items add up and can run you a couple thousand over budget when you are done. Will you get that back in the end? Remember you can’t turn a $101,000 dollar house into a $500000. The price you will get for your house is largely controlled by the market and the type of buyer that it attracts.
Read our next article to hear more about this Flip.