Wednesday, April 21, 2010

Removing texture from a ceiling 1

The current rehab project has one “bedroom” that was originally a screened sun-room. There is an original exterior-wall window still in place between it and the living room. The interior walls were ¼” exterior-grade plywood shot with heavy plasticized popcorn texture, but the joints were all cracking anyway because of wall movement from inadequate framing. The ceiling had a heavy coating of conventional popcorn texture and also had some quality issues. There were only three receptacles all on the same wall. The room had no door and there was no closet.

The latest step of this rehab was the removal of the ceiling texture to allow refinishing to a smooth surface. I had never done this particular job before and received a very helpful hint from a fellow investor and TBREIA member that most textures could be lightly dampened with water to soften them and then either flattened or removed with a dull-edged trowel. I was a little skeptical but decided to give it a try for lack of any better options. I did not want to remove the ceiling unless absolutely necessary.

I used an old window-wash spray bottle filled with plain water to mist the ceiling in 2’x4’ sections and gave it five minutes to soak in. It worked like a charm. Instead of a difficult, dusty, all-day job the ceiling was ready for refinishing in 2 ½ hours.

Monday, April 19, 2010

Rehab update

I continue to make progress on the rehab on Ewing Avenue in Clearwater. This morning I finished the electrical(six new boxes and receptacles on two different circuits) in the rear bedroom. The new framing is also complete and ready for sheet-rock to go up. Tomorrow the new closet doors will be installed and I will start removing popcorn texture from the ceiling.

It looks like I will be able to start putting up the new sheet-rock by Wednesday, maybe not until afternoon. I want to be able to do the bedroom and the new kitchen ceiling at the same time so that I can tape all of the joints at the same time. Then those two rooms plus the front bedroom can all be painted together as well.

After that will come the bathroom. The plan now is to tile the entire room from floor to ceiling. A new vanity will be installed along with new plumbing fixtures. The ceiling still needs a thorough check but will probably come down and be replaced with fresh sheet-rock and light fixtures.

I will continue to shoot short videos as this project goes along.

Sunday, April 18, 2010

Federal mortgage help not working

In its latest report, the Congressional Oversight Panel notes that the programs initiated by the Treasury Department to help homeowners facing foreclosure have not been effective. Fewer than 200,000 people have been permanently helped by the programs so far. I do not think this should be a surprise to anyone.

What incentive do the banks have to help homeowners facing foreclosure? The government bailed them out and continues to offer help as more foreclosures pile up. Participation in all of Treasury’s programs so far has been voluntary for the banks. A new requirement that loan servicers explain to homeowners why their loan modification has been declined is not going to increase the number of modifications. New efforts to get banks to write down principal loan amounts to bring loans in line with actual house values has gained no traction, even with one out of four mortgages currently being upside down.

What incentive does a homeowner have to apply for help through these Treasury Department programs? With second mortgages, credit cards, car loans and other debt, most homeowners would still pay nearly 60% of their income towards debt service even with reduced first mortgage payments. If they do attain a “best case” 5-year payment reduction, the homeowner will probably still be upside down and looking at higher payments once again.

Lenders and borrowers both seem slightly confused by the trickle of modifications to existing programs and new programs that keeps coming from Treasury. No-one seems to know whether to try to modify a mortgage now or wait a few months to see if something better comes along. Homeowners have seemingly been stuck in a non-stop cycle of applying to lenders for help, being denied after multiple delays and then being encouraged to apply for help again under a new or changed program, only to be denied yet again.

Meanwhile, more and more homes are foreclosed upon. Housing prices seem to be stabilizing in parts of the country but are still plummeting in some major cities. And the banks are once again profitable thanks to the federal government bail-outs.

Saturday, April 17, 2010

The rehab progresses

I have been spending at least a few hours almost every day working on 1585 Ewing Avenue. The framing for a new drywall kitchen ceiling is done. Framing for new bedroom drywall is almost complete and I finished the electrical upgrades in that room today. Drywall repair in the first bedroom is almost finished but I still need to enclose the main breaker box.

This morning the kitchen cabinets were removed from the wall to give access for electrical upgrades in that part of the house. Receptacles will be changed to GFI,s and moved to accessable ares, wiring will be concealed and cabinets remounted correctly. A previously repaired area behind the kitchen door will get a built-in shelf unit to hide that area - the wall material is no longer available and cannot be blended in. Additional lighting has already been added to the kitchen. The wall area behind the range/sink also needs repair.

See the first video of what it looks like now. I will update the videos regularly as the project progresses.

Monday, April 12, 2010

Enjoying getting back into practice

For the past week I have been doing my own rehab work on a real estate investment property. It just had too many cosmetic and minor electrical issues for most buyers. The obvious electrical issues were switch and receptacle boxes recessed behind newer drywall so that it was impossible to attach cover plates and a few lights that were slow to come on when the switch was thrown. Cosmetic issues were ugly drywall taping, no or poorly installed trim, poorly installed carpeting and a really ugly drop ceiling in the kitchen.

It has been almost ten years since I have done any real construction work but I wanted to tackle as much of this project as possible myself to keep expenses down and try to salvage a small profit. I started with the best bedroom which needed mostly drywall touch-up: replacing/repairing poorly taped seems, filling nail holes, fixing receptacle/switch boxes and building a proper cover for the main breaker box. That room is nearly ready for paint.

Every remodel I have ever done has revealed many more problems as the job progressed. I had planned to simply frame and drywall a new kitchen ceiling below what was there and drop the existing fixtures down. The wiring was a mess and the ceiling was not level, so the drop ceiling had to be removed and new wiring and fixtures installed. A problem was found in the wall of one corner and the paneling cannot be matched so a built-in cabinet is now going to cover that area. The wall behind the range and sink were not finished, with exposed wiring and plumbing. Those need to be pulled out, the area finished properly and the fixtures reinstalled.

One of the bedrooms was going to need drywall seams re-taped. Then it was discovered that the joints were cracked because the walls were water-damaged plywood over an aluminum screen-room frame. Those walls are currently being removed and will be properly re-framed, insulated and drywalled. A closet will also be added, which will hide an original exterior window in the wall between the bedroom and the living room.

Yes this was an odd house. A lot of so-so work was done by the original owners over the course of nearly 30 years. But it will soon be a nice, freshly painted home for less than $3,000 of materials and a few weeks of work. And I have really been enjoying getting back into practice with a hammer, screwdriver, multi-meter and drywall knife. It is hot and dusty but also very satisfying work where you can see your progress at the end of every day.

Wednesday, April 7, 2010

Belleview Biltmore clears all legal hurdles

Things seem to be looking up for the owners of the Belleview Biltmore Resort and Spa. The appeals period for the latest court challenge of development plans has expired. Last month saw another court challenge to development of the Cabana Club site on Sand Key defeated. Both properties are owned by Latitude Management Real Estate Investors, who plan to spend over $100-million on renovations and updating. This is good news after 2 ½ years of non-stop legal battles with various groups trying to prevent the proposed development work.

The historic 113-year old resort, located at 25 Belleview Blvd. in Clearwater, was built by Henry Bradley Plant and is on the National Historic Register. The Biltmore is probably the largest occupied wood-frame structure in the world at 820,000 square feet. Since opening in 1897 the hotel saw a steady stream of prominent guests including numerous presidents, queens, kings and captains of industry from around the world. It is one of very few historic hotels in the state of Florida.

With the removal of all legal obstacles to the development, project architect Richard J. Heisenbottle said the search for funds can begin in earnest for the first time. Finding financing for the complete project as planned could be a challenge. Knowing that the project can really be built should make the financial search a little easier.

The hotel has been shuttered and more than 300 employees laid off for more than a year. At one point the hotel was paying daily code violation fines for roofing problems. The originally filed development plan called for opening the renovated resort in January 2012. The new timetable for work and re-opening is not known.

Monday, April 5, 2010

Why “green” is important to real estate investors

There are a lot of reason why green is in the news so much. Many of those reasons are going to become very important to everyone involved in real estate or real estate investing. Green is not just about trees and polar bears but about making homes more affordable and salable. Home buyers are interested in green and investors should remember this when doing rehabs.

Homeowners in all areas of the country benefit from living in energy-efficient houses. Well insulated walls and ceilings, thermal-barrier windows and no air leaks reduce heating and cooling bills for everyone. Installation of modern, efficient furnaces, air conditioners and electrical appliances also leads to reduced emissions, reduced raw materials extraction, reduced transportation costs and less waste in general. There are many programs at all levels of government to help homeowners pay for these types of improvements on older homes. More incentives also need to be made available for purchasing energy-efficient new homes.

Water contributes to the monthly cost of home ownership. Making a home more water-efficient can both lower operating costs and benefit the environment. Reduced water use can even delay or prevent sinkhole formation in areas prone to sinkhole activity. Low-volume toilets, shower heads and faucets all help reduce water usage. Native-plant landscaping watered with captured roof run-off can greatly reduce irrigation needs. Where available, recycled water can be used for irrigation. Tankless, or on-demand, hot water heaters save both energy and water.

Solar water heaters are an ancient and proven technology that is easily and cheaply installed and can also be adapted to heating the house. Passive solar home designs can reduce demand for air conditioning by limiting indoor direct-sun exposure during summer days and allowing cool night air into the home. Solar electric has become much more efficient and affordable than ever before and can supply much of a home’s needs during the day but storage is still a problem. Wind electric generation is just starting to trickle down to the individual home level and should become much more affordable and available during the next few years.

All of these “green” upgrades will lower monthly bills and increase salability of a home. These are not “fringe” ideas limited to the granola & chai crowd at the co-op. Mainstream home buyers are now looking for “green” features because they benefit everyone.

Sunday, April 4, 2010

Investment property change of plan

I am now working on rehabbing an investment property purchased a few months ago. The original plan was to wholesale it to another investor as a rental. It was a conventional sale and the normal realtor 30 days until closing even though I was paying cash. Between contract and closing values in the neighborhood went down and sales in the area slowed to a near stop.

There still seemed to be some hope of scraping out a few dollars for a quick resale but interest was low. Soon other properties in better condition were selling for the same amount as my asking price. There was a lot of realtor interest but the slightly run-down property condition and odd floor plan put conventional buyers off. It was time to adjust the investment strategy.

The major problems with the house were old and ugly switches and receptacles, an improperly installed hung ceiling and ugly dishwasher in the kitchen and older, different-colored paint in every room. Taking care of these problems and painting the exterior trim should cost a few thousand dollars and a few weeks if I do the work myself and should make the house acceptable to a conventional buyer at a price that will leave me with a small profit. This seems like a wiser course of action than insisting on a straight resale and losing money on the deal.

In most if not all of life it pays to be adaptable and open to new ideas. I am certainly using a different strategy for the stock market than just a few years ago. Real estate investing is no different. The market is constantly changing and successful investors pay attention and make the effort to change with it.