We finished the rehab on The Mini House over the weekend, and just listed it for sale today…
We haven’t yet staged it, as we’re still waiting for The Hat Trick House to sell so we can use that furniture. But, even without the furniture, it looks pretty good. It was a simple “paint and carpet” rehab, and we also replaced all the lighting and plumbing fixtures, installed new appliances, a washer and dryer, and replaced the sliding glass door out to the back yard. On the outside, we repaired the garage door, painted it, and touched up some of the exterior trim paint.
Overall, we spent about $8,500, less than our $9,000 budget. We’ve listed the property for $99,900, and will likely lower the price in the coming weeks once we get an idea of what the market will bear in this neighborhood.
Here are the post-rehab, pre-staging pictures…
Well, you won’t sell it for $99,900 to anyone who follows this blog 🙂
Funny you should say that…we were just discussing that today…
It’s a risk we’re willing to take — our target buyer probably doesn’t read real estate investing blogs… 🙂
Not until you become famous.
Hi Everyone,
Just wanted to let everyone know I started a blog:
the13yearoldflipper.wordpress.com
Enjoy!
I have kind of wondered about blogging about our properties. I share a lot less financial details then you, but I would tend to agree with you, buyer’s typically won’t read your blog.
As you get a reputation agents might learn your story and find your blog, but I don’t think that’s a bad thing. They will probably want to show clients as many of your properties as possible. They know you make a profit, but they also know you respond much faster then banks and offer a flawless product.
We have one or two agents that follow our properties and some have even asked to do open houses in our properties.
I have to say I noticed that you have the name of your blog on your business cards…seams like kind of a bad idea…
If worse comes to worse you can always just wait to share financials after the sale.
I’m curious about the staging. Have you looked at cost of rental furniture to stage your houses if your furniture is occupied? I had a discussion with Cort yesterday and they rent room sets for about $150/mo with 3 month minimum. I figured ~$500/mo for $1500 total, but the furniture can be moved to a new location during the rental period. Ie another house if the current one sells. This may save you from having to buy sets for short duration staging needs. Just a thought.
Congrats Alex!
So, are you really 13 years old???
Steve –
The thing is, we have complete control over what we write here. If we get big enough, and this blog gets popular enough, I’ll be more careful about what I write and what details I share.
That said, I have nothing to hide. There is nothing here I would be concerned about my buyers reading…and if they read this blog, hopefully they’ll be even more reassured that we do everything we can to ensure they get an amazing home at an amazing price.
Hopefully none of my buyers would have an issue with the profit we make on our properties, though I agree they could use the information against us if they knew about this site during the negotiation process. I’m willing to take that risk right now…
Alex –
Why do you think this is a bad idea?
For the most part, the people who get my business cards are other investors, partners, contractors, etc. I certainly don’t mind that those people know the details of what I’m doing and my projects.
As for buyers finding out about the site, the buyers tend to deal with my wife (she’s the real estate agent), and she doesn’t put the the address of this site on her business cards for that reason.
Hey Bilge –
My wife definitely considered going that route when we started out, and in the right circumstances, we would certainly consider using rental furniture (for example, if we really need furniture for The Mini House and none of our other furniture becomes available any time soon).
Once we ran the numbers though, we realized that if we’re always going to have at least 2-3 houses on the market at any given time, it was more cost-beneficial to just buy the stuff. We can furnish an entire house for about $2000 now, and the furniture will easily last 4-5 moves without sustaining any major damage. This means we can spend $2000 for 12-18 months worth of houses.
The other benefit is that we can negotiate the furniture into the deal if the buyer is interested. This has happened a few times, and gives us an opportunity to turn our our old inventory.
And, the best part is that when we sell the furniture with the house, we generally get full-price for it, so the furniture often ends up being free!
In my area there is a staging furniture rental place were they let you “rent with option to buy” so if someone comes and wants to buy some of the furniture with the house they can buy it from the furniture rental company…
Alex –
The big issue you’ll run into with lease-optioning furniture is that your buyers are going to want to negotiate the furniture into the deal, so that they can roll it into the loan. So, they’ll want to negotiate with YOU, not the store that is selling it.
And I can promise you that the store selling it will be charging plenty more than you would want to charge had you just bought it yourself. So, you’ll end up in the middle of the negotiations, and will likely have to pay out of pocket to get them the furniture at the price they need (or risk losing the deal).
Fair enough, if your flipping lots of properties it is probably better to purchase furniture. But when your only doing one property at a time (like me) then its usually better to just rent.
It is interesting that you guys all find staging to be successful. I might be inclined if I was rehabbing larger houses and had significant competition. I think staging make a small house look smaller, is an unwanted expense, and I hate moving furniture in general. If I could make some money by selling the furniture I might be swayed, but I don’t see my current buyers buying any sticks from me, heck I’m paying outrageous closing cost to get them into the house. Some of my competitors stage houses and stencil “inspiring” slogans on the walls and it always looks goofy and tacky to me. From my conversations with them I know these moves are straight out of a seminar they have paid handsomely. Just my outlook, YMMV.
Jingle
Jingle –
Far be it for me to question anyone’s strategy…I just know what works for us…
The reason I’m a huge believer in staging is that we consistently hear from agents, “My buyer has looked at 30 houses in this price range, and this one is by far the nicest. My client was blown away.”
Now, we’re familiar with the other 30 houses the buyer probably looked at (we know our market very well), and while some of them are likely crap, others are probably just as nice as ours, but without the staging. But, as soon as the buyer sees the staged house, it becomes a home, and it stands out from all the sterile houses they’ve seen previously and makes an impression on them.
If we didn’t consistently get this feedback (and offers from these buyers as well), we probably wouldn’t be so enthralled with staging. But, given our experience, I couldn’t imagine trying to get a quick sale on a property without staging it.
Jingle –
To you other point about staging making the house look smaller, that just means you’re doing it incorrectly!
A good staging job will make a house (and each specific room) look MUCH bigger. A good stager uses small furniture to accentuate the size of the room, and positions the furniture in such a way as to give the room and the house a feeling of openness and structure.
Here’s a great example: http://reistartup.com/wp-content/uploads/Second_Chance_House/Staged/living2_staged.jpg
This living room is actually very small and oddly shaped. It took us many hours to figure out how to stage it to make it look like a living room. Had we not done so, buyers would have walked into the house and said, “Wow, this place doesn’t really have a living room,” because they wouldn’t have been able to imagine a furniture layout that made sense (at least not right away).
Here’s another example: http://reistartup.com/wp-content/uploads/Corn_House/After/diningroom1_thumb.JPG
If you were to walk into that house without the dining room furniture, you’d think to yourself, “Wow, this dining room is too small to do ANYTHING with!” But, we found a very small table and a small wine rack, and as you can see from the picture, it looks like a nearly full-sized dining room. Instead of the buyers getting a negative feeling from that room, they instead leave with a positive impression.
That’s the purpose of staging — accentuate the positive and hide the negative. And making rooms (and the house overall) look bigger, is probably the single best thing you can do to hide the negative in a typical house.
J Scott, I can’t argue with what works and I can see from your examples how it hides the unflattering. I’ve also seen a lot of houses staged just for the sake of staging them and they look like dog poo with tacky nasty furniture thrown together. Perhaps this is where I picked up my bias. Your staging look very nice indeed and I might be worried about some realtor walking off with a chair! I think that I might have to change my mind if I was in a market as big as yours and had so much competition. I do most of my work in two smaller cities (100K and 30K) north of Denver. Frankly, my competition is small and we pretty much know each house that we are facing.
These days I more worried about how the appraisals are plunging here. The new standards are rearing their ugly head and I don’t see tighter appraisals and comparing non-comparable homes are a cure to an already sagging market. I maybe setting out the next couple months and go fishing until all of this settles down.
Cheers,
Jingle
I think the main point of staging is it distracts buyers from small defects that can make the difference. For an example, if a buyer walks into a house and they see nice looking floors newly painted walls etc. It all looks nice but its clear that its an old house that’s been renovated. There will be small defects like a dent in the wall or chips in the paint that can change the atmosphere of the house completely. But with staging the buyer is distracted looking at the staging rather then noticing the cracks in the wall or the chipped paint. But its critical not to overdo the staging in which case the buyer will be so distracted by the staging that they won’t notice any of the improvements you spent all of your money making.
Staging definetly makes a big difference. Every house I’ve staged both agents and buyers have said the house shows extremely well. All my staged properties have sold very quickly… sometimes in only one day…. I’ve had two buyers request all the staging items stay, they wrote it right into the offer…. and a third just assumed it was all staying and called me the day after closing saying I stole all the staging items from the house!!!!
It needs to be done right…. I agree with Jingle in that I’ve seen some houses staged with old wicker furniture and an eclectic mix of items that looked like they came from gradma’s tag sale. Staging a home with old beat up furniture and out of date items looks like trash. I only use modern looking contemporary peices that blend well with our finished rehab and fit the theme of clean, bright and modern. This way the staging items further accentuate the great rehab we just finished.