Archive for the ‘do it yourself’ Category

Completing repairs on fixer upper house

Monday, October 15th, 2007


Repairs on the fixer-upper house that we are living in and repairing on Calle Canis continues. As mentioned previously, my wife and I bought this fixer-upper in order to live in it for at least two years and then sell it. We will pay no federal capital gains taxes for the sale because we are following the steps to receive the exception under the Taxpayer Relief Act of 1997.

There isn’t that much left to do, but often it seems like the closer we get to the end, the further away it moves from us. The list of final repairs include,

1.) refinish two permanent wooden cabinets, one in the kitchen, one in the hallway;

2.) paint new indoor doors;

3.) applying a little more mud (joint compound) to cracks in guest bathroom and paint it;

4.) finish painting outdoor trim of house;

5.) fix cracks, paint, install pump and fence in swimming pool;

6.) spray for termites (we just discovered that we have them).

Presently, I am working on the guest bathroom and my wife is painting doors. We mostly operate early in the morning while the kids are asleep.

Sometimes, when we have to focus on our rental houses, it pushes back the work on this house. But, except for a few extended breaks, we have made pretty good progress on repairing this house.

This is a 4-bedroom, 2-bath 1600 sq. ft. house that we have completed the majority of repairs on, including landscaping the front and back yard, floor tiles on bedrooms and bathrooms, new (or almost new Re-store) kitchen cabinets, wood planks in the TV room, rebuilt master bathroom, ceiling fans in all rooms, new room for the washer/dryer, fixed wall cracks, paint all walls and ceilings, and other odds and ends.

Kitchen before repairs:

Kithecn after repairs:

Mostly, we just fixed or replaced what was broken or missing. Since we plan to sell the house, we are spending a little more to make it look good than we would if we were going to rent it. With the weak market, I sometimes ponder keeping it as a rental until the market perks up again, but we don’t have to decide right now. As Lincoln said, ‘we’ll jump over that ditch when we get to it.”

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How to Learn the Skills to Repair Houses, part 2

Wednesday, September 26th, 2007

This of Part 2 of my reponse to a question asking, “My background is not in the building trades. How do I learn the required skills to start a business in repairing houses and renting them out?”

How to learn the appropriate skills:

3. Draw on the Past

After I got more involved in the repair work of our houses, I thought back about how my father had taught me a lot by example. I recall seeing him construct screened-in porches on various houses that we had lived in. I was too young to help out much at the time, or to appreciate what he was doing, but looking back I realize that it required a strong desire to learn the basic principals, and a sense of self-confidence to build it. He had no formal training in construction, and didn’t have reference books like I do, but he learned by observing other porches that had been built in the neighborhood.

I also have a friend who has made a career out of living frugally. He does virtually all of his own house repair and car repair work. If he gets stuck, he goes to the library and finds books to help him. It helps that he has a background in teaching vocational eduction. We have helped each other with house repair projects over the years, and he is a source of practical advice when I need help.
You too may have family members, or friends, that you can draw insight and inspiration from when it comes to making repairs.

4.Create a House Repair Library

I like to scour the fix-up book areas at used book stores for good buys. I buy a book as soon as I see it if I know that it has valuable information. In the past, I have waited to purchase the book only to return later and find that the book I had wanted was gone. The price you pay will literally be a drop in the bucket compared to the money you will save. I have books on almost every possible repair topic, including electrical wiring, plumbing, flooring, you name it. Some books that offer information on a wide variety of repairs, such as Reader’ Digest “Fix-it Yourself Manual” and Better Home and Gardens Complete Guide to Home Repair,” are also good to have. See my earlier blog for more infomation on recommended repair books.

When a book is not enough, I can usually get good advice on specific jobs at hardware stores, like Ace Hardware. And, you can sometimes get advice on difficult repairs by doing a Google search.

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How to Learn the Skills to Repair Houses, part 1

Tuesday, September 25th, 2007

I recently received a question asking, “My background is not in the building trades. How do I learn the required skills to start a business in repairing houses and renting them out?”

In terms of how to learn to repair houses, I will answer that question in two parts. The first part today, and the second half of my answer will be in a subsequent blog article.

How to learn the appropriate skills:

1. Learn by doing. When Orson Wells directed his first movie, “Citizen Kane,” he said that he felt “like a kid with a giant train set.” One nice thing about buying a fix-up house is that it’s like having giant practice house, where you can practice learning to do repairs. Since the house is already pretty well beat up, its OK if you make a few mistakes along the way. You can always go back and correct them later.

My philosophy is that the best way to learn is by doing. Granted, you have to gradually work your way up, if your are beginning near the bottom. At first you will have to hire out for most of the moderate or difficult repairs. Make sure you watch, or assist in doing, the repair when you pay someone to do it. That way you can do it, or at least do part of it, the next time you encounter the same situation.

Just last week, I had to hire someone to repair my air conditioner in a house that I am living in and fixing up at the same time. I took time off my 9-5:00 job to be on the roof with the repairman and observe what he was doing. I saw all of the tests that he performed with the multi-tester to identify what was wrong. The problem turned out to be two capacitors that were blown. If a similar problem arises in the future, I will know how to check and replace the capacitors myself.

If you have to pay someone to make a repair for you, make sure that you get your money’s worth by watching the repairman, and learning how to do it yourself.

2. Take community college classes. Most community colleges offer courses in the building trades – plumbing, electrical wiring, air conditioning and furnace repair, and woodworking. For a fairly low price, you can learn how to make repairs like a pro by taking these classes. I have taken several classes and they have been well worth the investment of time and money. Besides leaning the skills in a supervised environment, you also learn how to use the correct tools in the proper manner. As part of the program, students are required to take an 8-hour OSHA course in how to be aware of work site dangers, to do work in a safe way, and to avoid accidents. I highly recommend that anyone who does repair work take the OSHA class.

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Update on “Fix ’em Up, Rent ’em Out” Book -the wheels turn slowly, but still they turn

Friday, September 21st, 2007

My book, “Fix em Up Rent em Out,” is slowly approaching the finish line. It can be a slow process to get a book published, slower than I initially imagined. I finished the actual writing in June. The editing was finished at the end of August. It took until just this week for the cover to be completed. I shipped it to the printer yesterday. What’s left for me to do is to review the review copy, when it is send to me. Shortly after that the book should appear on Amazon.com and Barnes&Noble.com.

Way back in June, I thought it was a safe bet to set a September publication date on the book. That turned out to be wishful thinking. I calculated that would give me plenty of time to finish up all of the publishing-related details and even have it at Amazon.com before the deadline. Now it looks like it will be available in early October.

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How to Make Money in Real Estate – Stick to the Basics

Friday, September 14th, 2007

One of the surest ways to make money in any endeavor is to follow in the footsteps of other successful people. Astronaut Neil Armstrong followed in the steps of John Glenn. Comic actor Ben Stiller followed in the steps of his show biz parents Stiller & Meara. The same is true in real estate. Plenty of people have gone before us.

Buying lower-priced fixer-upper houses, using your own time & effort to fix them up, and renting them out has been a tested and true path to generate wealth & security.

The four chief benefits of purchasing fix-up houses are:

1) if you buy a house in need of repair, a fixer upper house, you pay less for it than for a house in good shape. Since you paid less, you can take out a smaller loan and have lower monthly payments.

2) By doing repairs yourself (as much as you are able to), you save the money you would have paid others, and you learn new repair skills.

3) By renting it out, you get a house that is constantly increasing in value (by an average 5% per year) the same time the rents are going up.

4) When you get older, your loans will be paid off (or close to it) and the rental income you receive are like a pension for your retirement.

Granted, it is hard work to find a house, make repairs and learn how to deal with tenants. But you also learn valuable technical and people management skills that you can use in other parts of your life, and pass along to others. Mostly, there is a great sense of satisfaction in your accomplishments, a stronger sense of security, and more income, which means more freedom.

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Rental House Repair: An Easy Fix for a Sagging Fence

Sunday, September 9th, 2007

Since this blog is supposed about fixer upper and rental houses (when I don’t get off track), every once in a while I like to pass along fix-up short-cuts that I use.

This past spring I had a townhouse become vacant. There is a small yard in the back of the house with a 6-foot wooden picket-type fence. It was leaning quite a bit on two sides, primarily because some of the bigger 4×4 posts that are planted in the ground had broken off at ground level. I didn’t want to replace those broken posts, which would involve a lot of digging, and removing the fence sections that are connected to the 4x4s.

Instead I bought 4 or 5 six-foot stakes (there is probably a more common name for them that I don’t know) at Lowe’s for about $5.00 each. I pounded them in the ground with a stake pounder (again, probably not the official name) which cost about $20. Then, I straightened up the fence and attached it to the stakes with plumbers tape and screws.

Now the fence stands up straight after about an hour of work to do both sides of the fence. I acknowledge master handyman, Lee Anderson, for introducing me to this technique.

If anyone else has any other techniques, feel free to pass them along and I will post them on the blog.

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Dealing With Tenants Who Suddenly Move Out and Leave the House a Mess

Wednesday, June 27th, 2007

Sometimes in our fix em up rent em out real estate business we have tenants do unexpected things.

Last week I had some tenants suddenly move out of a house they were renting from me. They left behind unpaid rent, a messy house full of clothes, magazines, food, and a lot of other things for me to haul off. They were having marital problems and money problems, so it was not totally unexpected. But what, I asked myself, could I have done to stop this hasty exit, which left me with a lot of extra cleanup work? Not much, was the answer I came back with, it just goes with the territory. We ran background checks and called references at the beginning, and they came up clean.

My wife and I use the deposit to cover clean up costs, but since we do all the clean-up and repair ourselves, its a matter of us spending more time than normal getting the property ready to go again. A change that I am going to make to the basic contract, for the next tenants, is to charge an extra $25 per month for any pets. Formerly, I had it as a $100 deposit for dogs. One thing that tenants rarely do, in addition to never changing the air filter, is to never completely clean up after their dogs. Another thing that I am getting tired of cleaning up is oil spills in the carport. So, I’m going to state in the contract that any oil spills that we have to clean will result in an automatic $100 charge taken off their deposit.

Beyond the extra time spent to clean up, I do always get a sense of enjoyment and satisfaction in cleaning up and repairing a property between tenants. I have the sense that anything they can break, we can repair. My wife and I have done it frequently enough, these are the third tenants for this property, that its become routine for us to do the repairs. It just took a little longer this time.

On a lighter side, below are five rules NOT to follow to run a successful house rental operation that I have found useful. They are adapted from Andrew Stefanczyk’s posting on Investalist.co.uk.

The Five Rules on How to Lose Money and Get Your Rental Property Trashed by Your Tenants

Rule 1
Choose the worst possible area. The location of your investment property will determine the kinds of tenants you will attract, and how much rent you can fairly charge.

Rule 2
Put the very best of everything in when fixing up an investment property. Luxury bathrooms, thick pile carpets, plasma TVs. Never shop at stores that recycle construction supplies. Spare no expense.

Rule 3
Make sure you have absolutely no experience in making basic repairs. Not knowing how to change electrical outlets, unclog drains and toilets, and replace broken windows will cost you quite a bit of money down the road.

Rule 4
Do not screen your tenants. This may be the most important step to making sure you lose money as a landlord. Do not ask for or check references. Do not call previous landlords and ask questions like, did they pay rent on time? How was the condition of the house or apartment when they left? Did they ever disturb neighbors with loud music or shouting matches? How often would you have to make special trips for repairs? Being as uninformed as possible about whom you rent to will make a huge difference and will increase the chances that you will get tenants that will trash your property and refuse to pay rent.

Rule 5
Make sure you have not learned about your rights as a landlord. Be completely unfamiliar with the eviction process to guarantee long, drawn out disputes with tenants. Don’t keep up to date financial records or copies of correspondence with your tenants. Most states provide online information about tenant and landlord rights so avoid reading these.

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Start Your Fixer Upper Rental Home Real Estate Business in your Spare Time

Tuesday, June 26th, 2007


Opportunity is missed by most people because it is dressed in overalls and looks like work.
-Thomas Edison

This blog is aimed at the person who has a strong desire to invest in real estate but wants to keep their regular 9 to 5 job. This person, like me, may not start off with a lot of disposable income. My wife and I have to pinch pennies and think long and hard about it before taking the plunge to buy a property. People who posses the extra money can afford to hire professionals to take much of the burden of their shoulders. They can hire attorneys, real estate agents, landscapers, plumbers and electricians.

But for me, the key is to not rely on on the so-called real estate professionals to help you along the way. What I propose is that you learn to do all these things yourself, just as you would learn all aspects of any hobby that you pursue. It is more difficult to do it all yourself, but it is more financially rewarding, more deeply satisfying, and you will learn a wide assortment of skills that will serve you well throughout life.

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