1. Home

Discuss in my forum

I have an investment house to sell or flip...[and] want to spend...little money.


Question: I have an investment house to sell or flip...[and] want to spend...little money.
I have an investment house to sell, flip, or whatever you call it, that is in need of repairs. I want to spend as little money as possible…can you blame me?
Answer: The reader then described how a contractor had quoted $180,000 for whole-house renovations to bring that investment house up to saleable condition. The reader was shocked at the six-figure ticket, and he wondered if there was any way to control those costs.

Only a few years ago, the concept of “house flipping” got a terrible image because of greedy mini real estate “investors” who bought HUD houses or houses in similar run-down fashion, renovated them, and sold them at a profit. The renovations were often done shoddily, with sub-standard core services work on those “minor” things like electrical, plumbing, and foundation. Stories were told of entire roofs failing in, foundations collapsing, cheap replacement windows leaking, and more.

Urban legend or not? Many stories were true, but they were so dramatic and salacious that for every one shoddy “house flip” there were a thousand that were performed adequately, within code, and to the satisfaction of the seller and buyer.

This renovation axiom is true: If you are selling an investment house, you want to spend as little money as possible on the renovations. Can you blame the reader for wanting to minimize costs?

Contractor’s Fees

One thing that those home remodeling contractors may not be figuring into the cost: their own commission. This may range from 15-18% (or more). Yes, if you physically did all of this work yourself, it would cost half or probably even less than half. That would be a tall order, though.

Alternatively, you could act as your own contractor. You "sub out" these individual jobs to the trades. That way, you don't pay the contractor's $18,000.

Given the fact that you intend to off-load the house, here are ways to minimize your costs for the jobs you have described:

1.) Windows to replace - 12 regular, 1 bathroom slider, 1 casement, 1 kitchen slider

Avoid any "window replacement companies" (and certainly avoid the Pellas and Marvins of this world). Find a one or two-man local contractor/handyman outfit. The world abounds with guys like this. And at this time in our economy, you have bargaining power. This contractor/handyman guy can obtain replacement windows, and he can probably install them all by himself or with a friend. You keep him in business, he gives you quality work.

2.) Replace exterior doors - 3

Same thing here. These local self-employed contractors will be your savior, if you can find the right guy or guys. Door replacement is often done in the same breath as window replacement.

3.) Holes in roof need repair (whole roof may need to be replaced)

If you can repair rather than replace your roof, so much the better. And here's why: roof replacement is a thankless repair. You spend all that money, and it just gets a glance from homeowners, if even that. But potential home buyers will dwell for an hour looking at the kitchen’s stainless steel. Do safe, functional roof repairs only, if possible.

4.) Second floor ceilings are cracked and have holes

Removing old ceiling plaster (I'm assuming it's plaster) is a real mess. It's not just plaster, but all of that lath underneath. It may be possible to install a "skim layer" of 1/4" drywall over the plaster ceiling, after knocking off any really bad hanging pieces of plaster.

5.) 1st floor kitchen - ceiling caving in because of water damage

It's hard to tell if this can be skim-coated, too. Presumably, the water leakage will be taken care of with the roof repairs.

6.) Carpet badly frayed

In terms of sheer materials cost, I would replace with carpet again, rather than upgrading to hardwood (unless it's in some super yuppie area where hardwood is mandatory). Carpet installs fast, and you can get it for cheap if you look hard enough. Carpet has none of the mess involved with hardwood floor installation, either.

7.) Bathroom fixtures need to be replaced (1 full + 1/2)

Not much to say here. Low-end bathroom fixtures nowadays can look pretty great.

8.)Kitchen appliances need to be replaced

This is at your discretion. If you're at all handy, you can install all of these yourself, from trash disposer to dishwasher to stove. Most appliance retail centers will provide free installation, though, so there is little point to this. If you buy cheaper appliances from eBay or Craigslist, then you definitely have to install yourself.

9.) All kitchen cabinets need to be replaced (because of water damage from leak in ceiling)

No "kitchen cabinet companies." They'll charge a fortune. Even having The Home Depot replace kitchen cabinets can get expensive. If you can buy your stock cabinets elsewhere (i.e., IKEA), then your contractor/handyman guy can install cabinets.

10.) All electrical needs to be brought up to National Electrical Code

No way to get around this, other than saying to avoid large electrical service companies and try to find smaller operations.

11.)Drive way needs to be repaired or repaved

Those roll-on asphalt “blackers” don’t do much—unless your asphalt driveway already in pretty good condition. For replacement, asphalt tends to be cheaper than concrete.

©2014 About.com. All rights reserved.