Welcome to KiND Homes!!! We’re very excited to get this page up and running so we can share the processes we went through--as well as a bunch of photos--of our first “flip.”
House Flip or Home Renovation?
Here I say flip, but about halfway through our project we actually started calling it a “renovation.” So, I looked up online to see what the internet had to say about what the difference was between the two. Basically, flippers are in and out of a project fast, and the quality of materials is sometimes compromised because of the budget. Flipping tends to be very cosmetic with clean-up, new flooring, new paint, and very little in the way of design.
Conversely we spent a lot of thought and time on design, and we really picked out materials that we would like to have in our own homes. In fact, that is the definition the internet gave most often regarding renovations: it's something someone does to their own home and for their own tastes, not necessarily because it adds value to their home.
So we end up somewhere in between these two terms. We definitely wanted to--no, NEEDED to--add value to the home. And we definitely had a budget and couldn't go crazy with material costs. But on the flip side, we really wanted the end product to be something we would be proud of and excited to pass on to the new owner. Besides, we DID feel like ramping up the design added value, and in the end, I know we were right.
So in these posts, I may use the terms flip and renovation interchangeably, but know that we really viewed this project as a renovation, even though we would be putting it on the market the minute it was done.
So What's This Blog About?
In this and subsequent blogs, we want to share not only the process we went through on this journey, but also what we were thinking, why we made the decisions we did, and what we would do differently next time. Specifically, some of the things we will be covering are:
· What motivated us to even do this?
· How did we go about choosing our first home to renovate?
· Buying the Windsor property
· Before, During, and After photos. Lots of those!
· Design choices and why.
· What we did ourselves and what we hired out to the professionals.
· What we learned along the way.
· Would we do it again?
How it Started
What made us want to even do this? You've seen the shows: invest some money, fix up the dilapidated house, make a ton of money. I'll admit it, I love those shows and they do make it look like fun. But even I can do the math, and I know there is no way they're including some pretty significant costs in their rundowns. Labor, design, furniture, and agent fees, seem to get down-played on a lot of those shows. Not all, but a lot of them. Luckily, I'm very good at math and my sister is a CPA and numbers wizard, so we did go into this with our eyes open on that front.
It really started when I moved back to Phoenix from Las Vegas. My family moved here waaaaaaay back in 1977 and has mostly stayed here since. As an adult, I'd moved around to different states, but my sisters stayed and I finally decided it was time to get back home.
Once I was here, I was looking for a way to make some money that wouldn’t require an actual job (little did I know!). I'd been lucky enough to avoid the 9 to 5 grind as a professional poker player for the last 15 years, and I just wasn't ready to jump into an office job. I had sold my house in Vegas when I left and had some cash from that, so I was able to be creative in my "job" search.
Lynda was semi-retired and looking for a project. Anyone who knows her knows that she keeps a serious Bucket List and has been working her way through it for years. One of the items on there was flipping a house. The timing seemed right. Plus, the real estate market in Phoenix was HOT.
So I moved in with Lynda (and her cute dog, Leo) until I could find a place of my own. Ultimately, I think we kind of came to the idea of doing this renovation pretty organically. We started looking for homes for me, but pretty quickly we were really looking for a place we could buy and flip. We started combing through Zillow and other real estate sites, driving around different neighborhoods to see which were the “good” ones. We decided that lots of (renovating) dumpsters in a neighborhood were good as well as a mix of “done” and “not done” homes. It was all very scientific (ha!). As time went on though, we developed a pretty good idea of where we wanted to be.
Location, Location, Location
So cliché, right? Yet so true! Our first project had to be in the right neighborhood, which meant affordable, but on its way up. In Phoenix there are a number of neighborhoods and areas that fit this description. Arcadia/Arcadia Light which is located in Central/East Phoenix, was the area on which we decided to concentrate. It has a lot of young, professional families, tons of super trendy restaurants and bars, and easy access to freeways and the airport. Many of the homes were built in the 50’s, mostly ranch houses, and there are still a lot of homes that haven’t been upgraded in the last 30-50 years. However, when a home is bought, it is generally gutted or even torn down as they are worth so much more as new builds or as modern, renovated homes. Plus, because we were actually living in Arcadia Light, our commute would be short and we knew the neighborhood well.
Buy Price and Renovation Costs
Our only problem with Arcadia/Arcadia Light was the cost of even a tear-down was most often higher than our budget allowed. And we had a definite budget that we didn’t want to go over. As our first project, we didn’t want to get in over our heads on the money. And we didn’t want it to get too stressful, which an expensive project would definitely be. If you are considering doing a flip (or renovation), you MUST first decide how much you want to spend on the buy and also on the renovation. I know, it sounds so basic, but I can’t tell you how many times we had to reel ourselves in from buying a house that would be “awesome!” but was out of our budget. Taking a step back and saying, “maybe next time,” saved us from jumping into the deep end more than once.
Luckily, through a friend, we heard about a small, but nice neighborhood juuuust outside our selected area. We drove down every street, and really liked what we saw. There wasn’t much for sale, but we thought we could find something in our price range if we were patient. And while many of the homes still had that older, original look to them, we could see that a number had been renovated and looked really nice. We checked out the sales prices online and the spread was there. We felt the opportunity to buy low and sell high was good.
Home Parameters
Our “Must-Have” list included a few items that we felt were really important. The first being lot size. We decided early on that lot size was going to be one of THE most important parameters of our search. No matter the home, people want backyards for their pets, their kids, to entertain in, pools, etc. And they’ll pay for that space. So if we could get a home on a decent size lot, we were going to be way ahead of the game.
We wanted the home to need A LOT of cosmetic work. But maybe not so much construction. So while we were willing to turn a carport into a garage and knock down a wall or two, we weren’t really looking for a tear-down or even to do an addition for our first project. We knew what we didn’t know, and we wanted to keep it manageable. We also wanted to stick to a 3-4 month timeline if possible.
We really liked the older, ranch homes, the mid-century look. They were solidly-built, and a neighborhood of almost all ranch houses means no one is looking down into your backyard. Again, privacy is worth money to people. Also, there is a really great design trend of ranches nowadays. Watch any TV home renovation show and you can see that it is definitely the “in” style.
To Agent or Not to Agent
Finally, we decided that for better or for worse, we weren’t going to use a buyer’s agent. We knew this could give us some leveraging power in negotiating a price, and since flipping is all about the “Buy,” we felt like this was a financial decision that was going to work in our favor. HOWEVER!, Lynda had over the years bought and sold a number of rental homes and commercial properties, so she was very familiar and comfortable with the process, contracts, and the paperwork that was needed. If it was just me, I would have DEFINITELY used an agent.
Okay, so we had our location, our budget, and our “Must-Have” parameters. Now we just needed a house to buy.
Comments