Archive for the ‘making repairs’ Category

How I got started in the fixer uppers

Monday, July 14th, 2008

Buying fixer upper houses and converting them into rental houses is a great business. And anyone can do it. You don’t need a certificate, you don’t need a degree, and you don’t need anyone’s permission. You just do it!

To view a condensed version of how I got started in the fixer-upper business, check out my article at ezinearticles.com. This is the version with no bells or whistles, and no accompanying three-part harmony.

The townhouse closing may or may not happen today. If not, Angy has to catch a flight out of town tomorrow. In that case, we will have to sign power of attorney over to me so that I can sign for both of us at closing.

Just like the recipe for my famous extra-chewy chocolate chip cookies, the plot thickens!

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Due Diligence, Part 3 — Inspecting the Property

Wednesday, February 6th, 2008

*
Following the outline from “Real Estate Investing for Dummies,” aimed at investors in fixer upper houses, we now move to the property inpection part of due diligence.

You have made an offer on a house, it has been accepted by the seller, and you are now in a period where you must determine whether or not the house is really worth puchasing. If you inspect the property and the physical condition is not satisfactory, almost all purchase contracts allow you to gracefully back out of the deal with no loss of earnest money.

Even if the investment property looks good on paper, and your pre-offer inspection didn’t unearth any skeletons, a wise investor will always do a thorough physical inspection before purchasing.

Although we investors tend to be frugal (see, skinflints), this is not the time to cut corners. You need an extensive inspection by qualified experts. I mentioned in an earlier post that I have a handyman/friend who has extensive experience in the construction & building trades, who inspects my investment properties. Unless you know someone that has that kind of background, you ought to hire someone who does.

Almost always, the inspection pays for itself. You will find problems in need of repair that are of far greater value than what you will pay the inspector. And the good part is, the seller will have to pay for the repairs if he wants to sell the house.

Many investors use a two-track approach to property inspection. You are looking for two types of problems:

1. Patent defects — those which are more superficial and can be spotted by merely looking at the property. These include broken doors, cracks in walls & ceilings, and spots in ceilings indicating a leaky roof.

2. Latent defects — those which are not visible to the naked eye, and are only identified through delving deep into the bowels of the house where few have treaded. In fact some potential problems, such a water pipes inbeded in the slab would be nearly impossible to evaluate. In fact, you couldn’t evaluate it at all unless you had a disclosure from the seller.

Next Time: Disclosure Requirements

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Grout in Old Houses — Don’t let it get grout of control!

Friday, December 21st, 2007

A common problem encountered in older houses is the grout can look dirty. For the 1957 fixer upper house that my wife and I are presently working on, the tile grout in the master bathroom was dingy (see picture above). My plan since I bought the house was to remove the old grout and replace it with new grout.

However, last week before beginning the grout removal, I checked my copy of Home Depot’s book “Tiling 1-2-3“. The book suggested cleaning the grout to bring it back to its old glory.

So I purchased some Agua Mix Grout Deep Clean, and some White Tile Grout Coating for good measure.

First, I used my grout saw to lightly scrape off dark spots in the grout.

Then, I used the Grout Deep Clean, which to my surprise, actually did make the grout look cleaner. I let the liquid “dwell” on the grout for 5 minutes, I “agitated” it with a scrub brush, then I waited 2 hours for it to dry. But it still wasn’t as bright as I would have liked.

Next, I liberally applied the Tile Grout Coating to the grout.

The coating did a remarkably good job of coloring the grout to a strong color of white. I was very happy with the results. After the coating dried I applied grout sealer.

After all was done, the grout looked like this.

So, the lesson is, as long as the grout is not badly cracked, you’re better off cleaning and coating the old grout. It can save you a lot of time.

Info on Terry’s Book

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A small grouting job in the bathroom

Sunday, November 18th, 2007

Sunday, work continued on the fixer-upper house that we live in, and plan to sell (for more info on this investing strategy, see “How to Turn Your Home into a Rental Property, Instead of Selling It!” coming in Sept. 2012.) There was a little grouting left to do in one of the
bathrooms, around the tiles that made a baseboard-type border abound the bathroom floor.

Here are the tools I used – small bucket, white grout, a trowel, and a small “mud” (or joint compound) spatula (not pictured)

I mixed up a small amount of grout. Add water to the powder until you have grout the consistency of peanut butter.

When I mix grout, I wear a mask or kerchief to cover my mouth and nose. The grout mix contains cement, so if you breath in the powder it can scar your lungs.

I apply the grout with the small spatula.

Afterwards, I clean up tools with water.

After the grout has cured for three days, I apply grout sealer.

There are two pretty good books on floors and tiling published by Home Depot, “Tiling 1-2-3” and “Flooring 1-2-3“. I recommend “Flooring 1-2-3”, if you just want to buy one book. It cover tiles about as well as the other book, and also addresses how toinstall several other types of flooring. I used it as a guide to install both laminate flooring, and vinyl flooring.

As always, to make money in the fixer-upper business its best to do everything yourself. You learn by doing. Start small but work up to bigger projects.

Our first tiling project was in a small bathroom, a good place to learn the process. But since then, my wife and I have worked our way up to doing large bedrooms. We feel comfortable tackling any tiling project now.

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Termites, a relentless foe in rental houses

Friday, November 16th, 2007

In the fixer upper rental house business, we must constantly monitor the status of our property.

I was reminded of this again when we discovered that we had termites in one of our bedrooms. This is a fixer upper house that we are living in as we make repairs; soon to be a rental house. My son bumped his foot against the floor trim and found that there was no longer any wood trim there. All that was left was the the shell of the paint in the form of the trim. The wood had been completely eaten by termites.

Hiring a Pest Control Professional

I usually like to do all fix-up type repairs myself, but this is a case where I let the exterminators (no relation to the California governor) do the work. The first few companies I called would not give me a quote over the phone. The one company that gave me a “rough estimate” came in at a budget busting $1500 to $2,000 for a 1600 sq.ft. house. The job must be based on the square footage of the house, so it’s not rocket science to calculate the cost. It makes it impossible to compare companies if they all have to come to the house before they can give me an estimate! They think that after you invest the time to have them come over, you’ll just fall for their sales pitch, rather than spend any more time finding the best deal (and at the same time you’re concerned that your house is crumbling from the relentless termite onslaught).

So, I kept calling. After several more calls I connected with A-OK Termite and Pest Control and they really were “A-OK” because they gave me a bid of $650 without a house business. They did the job last Saturday.

Termite Living Habits

Yikes! Termites

Here in the desert southwest, we have subterranean termites, which I believe are the singlemost common type. They live in colonies deep within the ground, sometimes to depths of 25 feet. Termites work their way up through the soil from their nest and enter any wood they can. Termites can gain entrance by crawling up the sides of foundations, building mud shelter tubes to shield them from light, or they can go up hollow sections in block foundations or up cracks in the poured concrete foundations.

Every 48 hours or so termites must return to the soil to get moisture or they will die. The exterminator (again, no connection to Arnold) sets up a barrier of chemicals in the soil that the termites cannot pass through. They usually inject chlordane into the the soil every eighteen inches around the entire house. The same procedure can be done inside the house.

Even if only one part of the house is infested, the entire house must be termite-proofed or the termites will migrate to the untreated parts.

The time it takes termites to do serious damage varies from only a couple of years to 10 or more years. So, if you think you might have termites, don’t put off taking care of them too long. If it’s been 5 years since the last treatment it’s time to have the house inspected.

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Refinishing Cabinets in a Fixer Upper House

Tuesday, November 13th, 2007

Veterans Day my wife and I, as veterans of many fixer upper house battles,  refinished the hall cabinets and painted bathroom and bedroom doors.

The permanent hall cabinets had been scratched up in the fixer-upper house that we are living in and repairing, to ultimately turn into a rental house .

Steps in refinishing wood cabinets:

Step 1: Take off the cabinet doors.

Step 2: Remove the old paint or stain. I used 150 grit sandpaper.

Step 3: Apply stain. I used Watco Danish Oil, which is applied with a rag and is used to both protect wood as well as to stain it. Make sure you apply test patches of your stain to an inconspicuous area of the piece to be stained. Most stains dry a shade or two darker than the color you see.

You control the color by the length of time you let the stain penetrate the wood. If it gets too dark, moisten a clothe with the recommended thinner and wipe again to dilute and wash away some of the pigment. Since this stain is oil-based, make sure you either work outside or have plenty of ventilation.

If the wood is thirsty, it may take more than one coat to get a smooth finish. Wipe in the direction of the grain.

Step 4: I’ll apply polyurethane after the last coat dries, for extra protection.

Angy expertly painting a bedroom door. She’s using Behr’s Ultra Pure White, Semi-Gloss Enamel (Wait, I’m not ready!).

For more info on converting a house to a rental, see my new book (due out September 2012) entitled “How to Turn Your Home into a Rental Property, Instead of Selling It!

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Fixer upper ceiling repair update

Tuesday, October 23rd, 2007

Sunday was a day to continue work on our present fixer upper house.

The house had a leaky cooler on the roof when we bought it. I repaired the roof with E-LAS-TEK rubberized roof coating (for flat roofs like we have in Tucson), but I had not repaired the ceiling until Sunday It had been stained by the water from the roof.

(The picture dates are wrong. I didn’t update the camera last time I changed batteries.)

I scraped the old paint away above the bathtub. I used joint compound (“mud”) to patch the spot. After the mud dried, I brushed on “Kilz” to cover the stains and to prevent any future leaks from the roof to stain the ceiling. Later, I will paint it again with the white latex paint we are using for the bathroom.

Another project I worked on Saturday was to continue painting the house roof overhang. It could easily have been 50 years since some sections of the overhang were painted, other sections never had paint. The wood absorbs the paint like a sponge. The wood is so old that, in places, a it has a hair-like covering. Before painting, I scape off the hair (I give it a shave) with one of my “mud” spatulas. You could probably use a wire brush too, but it comes off pretty easy with the spatula.

I started off using the cheap $1.00 “throw-away” brushes that you can buy at Home Depot. They didn’t hold the paint too well, so now I am using a more expensive brush which is working a little better. The paint spreads a little easier.

Most people wouldn’t notice whether or not the overhang was painted. However, we want this house to last a long time, so the paint goes on.

As I mentioned in an earlier blog, my wife & I do the repairs on this house in fits and starts. Since we live in the house, we don’t have the the pressures to do it rapidly, like we did for our last fixer-upper house. (For more info, see my latest book “How to Turn Your Home into a Rental House, Instead of Selling It).

For that one, the “Planeta” house, we worked late into the evenings and we would take turns getting up early the next morning, to put a few hours in before going to work. One of us would stay home with the sleeping kids. Making the monthly mortgage payments and all the repair costs that we were racking up, gave us real motivation to finish and get a renter in there ASAP.

In the present situation, it works best for me when I set easy short-range goals. Right now my goal is simply to get up early & paint for one hour before I eat breakfast and get ready for work. On weekends I can do more, but just an hour a day keeps the ball rolling.

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Cutting Repair Costs When Contracting Out

Sunday, October 7th, 2007

As fixer upper rental house business owners,  its good to know how to do as many repair jobs as possible, however, when a job is too technical and beyond your abilities, or too tedious, like a large painting job, it’s time to contract the job out.

The secret in dealing with contractors is that it’s better to pay by the job instead of by the hour. If you pay by the hour, whoever you contract with can bleed you dry by working many more hours than anticipated. If you can get the contractor to set a fee before beginning the job, he absorbs the cost of working the extra hours instead of you.

This technique works well if you are hiring a non-professional, like high school students to paint outside trim work for you. However, it doesn’t always work so well if you are hiring a highly skilled electrician or plumber. Sometimes they’ll give you a set price, but mostly you pay them by the hour.

I have a highly skilled handy man I call in for jobs over my head, and I always pay him by the hour. He often will make repairs at my rental properties at odd hours and respond quickly to emergency situations. Without him, I’d almost have to quit may day job to keep up with repairs. When you have someone like that, you do whatever you have to, to hang on to them.

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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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