Flipping Houses for Profit

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Decorating a previously unfinished room with paint, carpet and even interior walls can significantly increase the value of a home.

With some capital, a lot of work and a little gambling on the real estate market, you can get out of the city hassle a lot faster than you think. The secret? Buy an old house, commit to some DIY home remodeling, sell it and double your money in 60 days. My husband, Bill, and I did just that . . . and neither of us really knew all that much about carpentry or flipping houses for profit, or about property deals. Here are some tips for your own home fix-up.

First, shop around for a real estate agent who’s on your wavelength. (We were lucky enough to have a friend in the business.) Then, with his or her help, look for a sound older house — 30-to-40-year age bracket — that has the basics. The one we found was a $16,000 steal in a sought-after neighborhood with a fair yard, trees and an unfinished concrete (as opposed to dirt) basement. That last point was a plus because it gave us the opportunity to create more living space . . . hence more square footage and a higher resale price.

It’s best to let your agent do the dealing for the building you choose . . . and don’t mention at the bank that you intend to remodel and sell fast. Bankers like to think they have you for life. Since your friendly broker does know your house flipping plans, however, he can help you cut corners on such matters as the down payment. We got by for $1,000 down and $140 a month. Just remember, the faster you get the property back on the market, the fewer of those installments you have to come up with.

Once we had our house, we decided we didn’t want to live in the mess of remodeling. So we stayed in our apartment . . . another $95 reason why we set a deadline of 60 days for our revamping job. It seems we were wise: Friends of ours who were also redoing a house chose to live on site and found their own occupancy a drawback. Trying to work around your furniture is a lot to cope with and takes precious time.

With that point settled, Bill and I got down to our project (evenings and weekends only, since we both had full-time jobs). We decided that DIY remodeling  was the best way to go, because it would keep our costs down. Hard-working friends who are sympathetic to your cause can make the business go faster.

Our first remodeling act was to enlarge a dinky closet in the master bedroom to a full-size walk-in with bifold doors (buy them unfinished at the lumberyard, and ask for irregulars . . . they cost less). Then Bill tore into the outdated coal bin in the basement and removed sundry shelves, junk and trash . . . while I refreshed the kitchen with paint, curtains from a bargain center and new white knobs on doors and drawers. (When you shop for paint, by the way, go to the best supplier in town and ask for their contractor’s grade. It costs less than top line but covers well — fast — and is a better product than discount stores sell.)

By the time I had the kitchen painted from top to bottom, Bill was ready to start partitioning rooms in the newly cleaned basement. In what had been a dark hole full of cobwebs, we planned — and soon saw develop — a recreation room, bedroom, utility room, enclosed stairway and furnace area.

Alterations on this scale meant that we really had to be careful about the cost of materials. Here are a few house flipping tips gleaned from our experience:

[1] If you’re putting in partitions, shop the lumberyards for good prices on sheet rock and 2-by-4s. Utility-run timbers aren’t very attractive, but they’re inexpensive and will do for inner walls.

[2] The fastest and best way to anchor uprights to cement surfaces is with floor plates put in with a stud gun from your friendly local rental outfit. In fact — apart from our own saw, hammer and paint brushes — we rented all our equipment as we needed it and kept the receipts (with other slips for purchase of materials) for income tax purposes. Don’t forget, household repairs and improvements are deductible!

[3] Another money-saver: If you lay floors in a utility room or hall, check with flooring businesses that cater to decorators. Often such a firm has four or five boxes of tile leftover from a job and will sell them cheaply to get rid of them.

While Bill created new living space down below, I painted most of the five rooms upstairs . . . but not the ceilings, since the result isn’t all that rewarding. The answer: Rent a hopper gun and blow texture on all those grimy overhead surfaces. If you do it yourself, you can dress up a seven-room house overnight for under $50. The man at the lumberyard or paint store where you buy the texture will gladly explain just how to go about the job. You can hire a pro if you’re dubious, but the bill for a dwelling of the size we’re talking about will run around $400-$500.

Remember, when you’re decorating, to use paneling and wallpaper wherever it seems logical (especially for parts of the dining room, den or recreation room). Even one wall in each area makes a big difference. Shop again for the paneling . . . discount and even lumber stores often sell it for as little as $2.99 for a 4-by-8 sheet.

The dining area in the house we refurbished shows what such an approach can do for a room. A single wall of white, lime green and apricot flocked wallpaper (one roll, $7.00) and a white rattan hanging light ($30.00) transformed that space into a page out of Better Homes and Gardens.

Another challenge to our decorating skill was the basement, which we did in sunny yellows and golds to compensate for the small windows. The overhead floor beams were a natural for a special ceiling treatment in the recreation room: We painted, them with black walnut enamel and they looked as if they’d been planned that way. A felt carpet runner up the stairway was $2.46 worth of sheer genius.

OK! You’ve painted, papered and paneled, new rooms have come into being . . . and you still have ugly floors. Even if they’re hardwood, forget refinishing. For the city set, wood floors are out, carpet is in. We hounded the carpet stores looking for low-priced floor covering, and almost despaired until our broker friend told us to ask for contractor’s grade. The selection isn’t great, but the price is: $3.50 for hemp-back sculptured and, $2 for rubber-back shag or smooth rubberback kitchen carpet. Take the room measurements with you and the salesman will help you figure the amount you need.

While you’re at the rug dealer’s, also ask for a roll of seam tape (a carpet-layer’s aid consisting of resin on a paper backing). Then rent a seam iron and do a professional-looking job at half the professional cost. Just butt the pieces and check the fit before you fasten them together. Then lay the tape — resin up — on the underside of the join and run the seam iron along the whole length under the two edges of carpet. The implement heats the resin and seals the fabric as you go. Finally, tack down the floor-covering around the edges of the room, put back the baseboards and try to remember how bad the place looked before.

The transformation of rooms at this stage becomes terrific. Even the bathroom can be glorified with wall-to-wall floor covering! A 4-foot by 5-foot kitchen carpet costs little and really hides that old cracked tile and linoleum!

Next, you need drapes. If the existing window coverings are just soiled, the dry cleaners can do wonders. If they’re old-fashioned, really dirty or worn out, go back to the by-now-much-visited discount store and be amazed at how little replacements can cost. Our living-room window span, for instance, was 190 inches (or about $700 at a regular drapery establishment). At our local bargain center we found a $57 oyster white, thermal-bonded set that looked every bit as good as the uptown variety.

Carpeting, drapes and general looks are important in house flipping, or just in selling a home: Most people, our real-estate-agent friend told us, never see more than five feet up the walls when they’re house-hunting. It’s also good psychology to pick neutral colors in your decorating schemes. You don’t plan to live in the house, after all, and you want it to have instant eye appeal for prospective buyers.

With the inside of the place remodeled and refurbished, you can set about giving the outside some cosmetic lift and sparkle. Exterior problems vary . . . we lucked out and had very little scraping to do before painting.

A two-color scheme will give your house a better face-lift and more appeal to passers-by. We used pale Summer Yellow with Georgetown Green accents and white trim on the windows (a combination that tends to make a building look larger). A small hunk of green felt carpet (82¢ a yard!) covered a bumpy porch that no amount of paint was going to change into concrete.

Sixty days from the starting date — groaning from loads of calluses, sore backs, bags under the eyes and smashed fingers here and there — we mowed the lawn and listed our “money crop” with the helpful broker . . . for $21,950! Amazing (to us, anyway), but our friend inspected our work and assured us that the finished job now appraised at that fantastic price. Our total investment was $1,000 down payment plus $1,157.36 for building materials and machine rentals, and our profit on this — and two months’ hard work — was over $2,500. Keep in mind, however, that we pushed up the appraised value by increasing the square footage of living space . . . and even though we cut corners on the cost of supplies, we did sound and neat work which truly increased the house’s worth.

All we could do from then on was sit back and wait for a buyer. That was the hardest part of the job . . . waiting. “Can we really ask that much for a house that cost only $16,000 two months ago?” we wondered. “Did we really make the place look better, or does it just look better to us?” We needn’t have worried: A 90-day listing in July — when the relocate-before-school-starts bunch are house-hunting with a vengeance — can hardly miss. We lucked out again.

Our gamble cost us two months of four or five hours’ sleep a night, pinching every cent for extra mileage and wrestling with our doubts about the real estate market . . . but it worked out well for everyone. The broker helped himself by helping us (after all, he got to sell the house — for a commission — twice). And when it was all over, Bill and I had the $5,000 we needed to make a down payment on our place in the country!

Are you thinking, “Yeah, if only I was young . . .”? That’s no excuse. Bill is 45, and I’m 35. Young is in your mind and heart. If you really want out, you can find the strength and the time.

Help for Amateur Builders

One good point about a house flipping project like ours is that it can teach you a lot of construction techniques. If you’re inexperienced, ask questions at the paint stores and lumberyards. People who want to sell you something are glad to tell you how to use it.

Bill has a book that was a big help to us . . . and still is: Modern Carpentry by Willis H. Wagner, published by Goodheart-Willcox Co., Inc. and available at most bookstores for $7.95. This work first appeared in 1969 and is revised annually. We highly recommend it, whether you’re remodeling or building from scratch on your homestead. Anybody can construct almost anything just by following Wagner’s directions and how-to pictures.

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