This is post one of our fixer upper project. This contains the details and nitty gritty behind the project. Next week’s post contains all the before and after glamour shots.
So, we bought ourselves a little fixer upper. Although we’ve tackled a small home renovation before, the home we purchased earlier this year has been quite a project! The house ended up being much more complicated and larger than what we experienced in the past. We had a pretty tight budget and decided to do almost all of the renovations ourselves. It was a pretty intense time commitment and we learned a lot throughout the process. We moved in a few weeks ago and we are now in the slow process of completing the remaining 10%. Although we finished about 80% of the projects before we moved in, the house is still only mostly complete and almost every room has some minor project left.
The ole HGTV shows tend to glamorize the process of a home renovation. The timing, cost, and mental expense are often undercalculated and the final product is almost always a series of compromises. Self renovations are certainly not for everyone. However, like most worthwhile activities, renovating a house is a solid combination of difficulty, stress, learning, and satisfaction. A lot went into our renovation project. There were tons of different thoughts and many lessons learned throughout the process. I’ll share some pictures of the kitchen renovation process in this post and next week’s post will have the complete collection of the glamour shots. (Before and After Preview of Kitchen)
Working With My Hands
I like working with my hands. Although I spend most of my days doing personal finance, I actually like the physical activity of working with my hands. I enjoy building things, seeing progress, and making things work (or look) better than they did before. If I had unlimited time, I think I would actually enjoy the process of building a house from scratch. I think it would be fascinating to learn and experience every part of the process. However, at my current season of life, I’m still in the beginning stages of building my career. I’ve got two pre-schoolers running around the house, plenty of community outreach commitments, and I’m constantly trying to be a better husband to my wife. If I’m honest, I could easily fill my time with that. Adding in another high-time commitment project is a tough proposition.
The original goal of the project was to stay all-in somewhere right around the $200k spot. In fact, one of the main reasons we actually picked the house we renovated was that the inventory in our area is insanely tight in the renovated sub-200k price point. In fact, out of the approximately 1000 or so latest listings in our area, a total of 2 renovated houses sold under 200k. Granted, our market is one of those crazy bubblelicious ones that could continue to skyrocket or easily pop. I suppose we’ll see in the coming years.
Thus far, we are pretty close to being on track to hit our budgetary goals. We will end up coming in around 210-215k when it’s all said and done. We ended up replacing a few things we originally thought were good and made a few higher end finishing decisions that bumped the cost up a little bit. Our house is a little hard to value post renovation. Our neighborhood has yet to have a house sell 200k+ but there is nothing like our home on the market even in the under 250k zone. I’m not sure exactly what we’ll get out of it on resale but we should be pretty upside right in almost any given market. Depending on how long it takes, we should be well positioned during the next recession to sell-then-buy if so desired.
Why Buy The Fixer Upper?
Buying a house and fixing it up doesn’t always make sense. Depending on the specific market conditions, the time, effort and energy often produce a negative return when factored together. However, in some markets, the magical ‘flip’ can yield extremely positive returns. In this instance, we weren’t really looking to flip the house and a move-in-ready would have been a possible option. We won’t really make much “profit” on the resale. However, at the price point we desired, the inventory was so thin that our only real options were to renovate or move up in market.
There is a pretty big difference between owner-occupied renovation and house flipping. In house flipping you are simply evaluating which projects will add the most value given their cost. It’s almost purely economic when it comes with evaluating each part of the process. When you are renovating a house for ‘your family’ to live in, economics are important- but not necessarily the complete picture. There may be certain decisions made due to personal desires and not necessarily purely profit motivated.
For instance, the old cabinets at our house were serviceable. Sure, they had quite a bit of water damage and could use plenty of repair. But, Ms SE had a strong preference for a higher trim cabinet and it made sense given the other planned renovations. The trickiest challenge for us was to balance the economics of renovation with personal preference. Although we purchased the house at the bottom of neighborhood pricing, we will certainly be the nicest home in the neighborhood post-renovation. This presents an issue when deciding which upgrades make sense. There are items we may prefer but they simply would not generate any additional value once the ceiling is hit for the price point for the area. We should make money on the renovation but it will be minor considering the time and energy costs involved with the entire project. On the positive side, we will have the home, flow, and style we desired at a price point that makes sense given our goals and desires.
Kitchen Side View Transformation
Bringing People Together
I think there is a strange dichotomy between being completely self-reliant and asking for help. As one moves up the societal economic ladder, human interaction or reliance is often replaced with money. Although convenient at times, there is a certain level of joy and connection that takes place when you rely on (and are relied upon) other people to get challenging tasks done. Whether building a table, moving some furniture around, building a fence, demoing a living room or installing a television- having close friends can make a dull or difficult task much more enjoyable.
The unexpected benefit of the renovation was creating a few new close friends. I make close friends by doing stuff together. It could be playing sports, watching games, or building something together. Having an activity allows for relaxing conversation. However, depending on your group of friends, it may be uncomfortable to ask for help. That being said- working hard with other people can help build deep relationships quickly. Something akin to the challenges of fraternity pledgeship or studying with friends for a really hard class. In fact, some of my favorite memories are from working hot summer days on houses with my father listening to solid country gold.
The Art of Learning
I really enjoy learning new things. I enjoy the (sometimes messy) process it takes to figure something new out. Often partial trial and error, taking the time to learn deeply how something works is an extremely valuable skill set that is often curiously lacking in the highly specialized western upper middle class. Doing a house renovation is a constant exercise in problem solving. In addition to planning out the process efficiently, adapting to issues as they arise and tackling physically and mentally hard projects builds a deep knowledge set once complete. In fact, one of my favorite takeaways of building or rebuilding a house is a full understanding of how each part of the house in constructed. Even if I choose to hire stuff out in the future, knowing the basics of how electrical, plumbing, framing, and drywall work will help me diagnose future problems if they ever arise. I’m constantly filling in the knowledge bank in the back of my head of tasks I understand.
The Challenges Ahead
Renovating takes time and attention. I didn’t really think as much about this until we sold our previous home (and before we purchased the new one). We were in a strange state where I took a new job (40 hours), but I was finished with my full time schooling and didn’t feel compelled to do any projects around or outside our home. For a brief period, I actually felt a little time margin. I noticed that I got excited about playing with the kids after work, going for daily walks, working out, and building things out of legos. The nagging sensation of outstanding projects were minimized. However, as soon as I would relax, my brain would start daydreaming about the next project. Although I like the progress of said extracurricular activities, it can be tough balancing that with the never ending ‘home to-do list’. I’m still working out the logistics and prioritization of doing the final house projects, helping with the family, playing with the kids, and reading/writing/relaxing. Our fixer upper project has been completely fascinating on so many levels. I’ve learned a ton about myself. We have an incredible home that fits our lifestyle and we are well positioned financially after the renovation. It has been a crazy few months but I’m starting to learn I need a little crazy to enjoy life.