In hot areas like Carmel Valley, home buyers are smart to consider expanding their target zone by looking at homes that need work – and if you buy one, you can remodel to your taste.
Chances are good that any house you buy will need something fixed or remodeled anyway, so getting comfortable with repairs/improvements is inevitable. Check this before-and-after montage:
Nice remodeling job.
How does that pencil out financially? Am I right in thinking that the $60k raised the value of the home by a roughly comparable amount?
And just from my adventures in home remodeling (kitchen, 2 bathrooms, and flooring) $60k seems like a good deal. Is that because it was a do-it-yourself, wholesale price?
It wasn’t do-it-yourself, the work was completed by our Bubbleinfo-preferred general contractor.
I think you can say it raised the value substantially, and certainly the house would sell faster now. But the owners plan to stay a while, so we won’t know for sure.
Just got the call – a final invoice just came in.
Total cost was $71,000.
A new video will be uploaded to reflect change.
I think that looks great! I love the open room….but my favorite thing is the wood floors.
It is such a huge improvement from those ‘before photos.’ I think a lot of people complain that all tract homes look the same inside and out. But if you’re willing to put in some extra money, you can make it unique and more attractive.
Two questions:
What kind of wood floors?
Is this a client’s home?
Jim,
Have remodeling prices decreased from the peak bubble years? Here in the suburbs of metro Phoenix, there are a lot of 2,000-2,500 sq ft. tract houses built in the late 1990’s that will need essentially a complete $100,000 whole house remodel on a house that’s only worth $300,000, which makes for a difficult decision if you want to stay in the house because you like the neighborhood. If you’re committed to staying in the house and are doing the remodel for yourself to enjoy, what’s your rule of thumb on the most you should spend on a remodel relative to the value of the house?
College Joe, My wife and I are the new owners of the house in this video. Jim did indeed help us purchase this house (Klinge Realty is amazing).
The wood floors are Carribean Walnut with a very thick veneer. Installing the wood floors were actually $20,000 of the cost of the remodel. The contractor tried to save us some money by giving us some viable options for wood flooring. But, we decided to stick with the more expensive flooring that the previous owners had started.
Changes are gorgeous. Modern but classic at same time. Thank you for allowing your home to be shown and sharing the cost data. Really helps to see what it costs and what you get for the money. Nicely done!
Thanks for sharing. Lots of dated inventory in my zipcode, some remodeled some not. So this definitely helps me think about assessing fair value. From my experience, the buyers of non-remodeled homes in my area don’t seem to price in deferred maintenance, which means buying the fixer doesn’t make as much financial sense as I used to assume. Maybe carmel valley is different.
Forgot to say job well done on the remodel. Looks great, and much cheaper than I would have thought. I imagine the cost would be well into the six figures just a few years ago.
Happs,
They spent less than 10% of what they paid for the house, so I like that rule-of-thumb.
Maybe 20% max of the house’s value for improvements?
The other rule of thumb is that you get $1 in value for every $2 spent, and there isn’t going to be many neighborhoods that could withstand more than a 10% swing in value between the fixers and cream puffs.
All very worthwhile improvements. Nice work.
Maybe when our build in Olivenhain is done, I’ll extend the offer to run a video of it. It is costing about 30% more to build than to buy, so I can be the poster child for bad decisions!
Thanks to Dwip, College Joe, Kathy, duncbdunc, and Aztec for all the kind comments. I guess you always have buyer’s remorse with any major spending decision. We love the work that was done, but it sure makes me feel better to know that knowledgeable folks see some value in it as well.
I’m fairly certain that the improvements would not increase the value of the house by the amount we spent on remodeling. Jim’s $1 increase in value for every $2 spent rule of thumb is probably more accurate in our case. But, as Jim said, we plan on living in the house for a long time. Our decision to remodel was for our own selfish enjoyment.
Thanks again to all, and thanks to Jim for providing a forum for sharing this kind of information.
…And just in case you’re wondering: yes, it is the Quirky Wife who chose the blue for the laundry room (Goodbye Blue Monday!) and the MBR, which I want to be a relaxing refuge. If it doesn’t work, paint is the easiest thing to change.
If only the move was as smooth as the remodel!
Thanks again, Jim!
For people undertaking remodels – here is a story and a reason to be careful….
Standard advice:
1) always get three bids
2) always check your contractor license number at the CA state licensing board website
3) always check the internet for prior client comments
I did all three of these when I hired the contractor to replace my garage roof last fall.
However, I did something I normally don’t do – which was to allow the contractor to purchase the materials for the job. Normally, I take care of the purchase and delivery of materials so that I know there are no corners being cut.
As it so happened, my contractor failed to pay his supplier and the supplier started the legal process to place a lien against my house, which is his right.
Now, when I hired this roofing contractor I did my due diligence and found nothing out there. However, by the time I got the lien notice from the supplier, I did a second internet search and suddenly tales from other homeowners started to appear. In the space of time from the time I hired the contract to the time of notice of the lien, 4 other homeowners had posted on the internet about liens being threatened.
In order to avoid the lien, we worked directly with the supplier and gave him a check for the materials to hold, with an agreement that if the roofing contractor paid before the lien file date the check would be destroyed.
Then I went to the state license board and filed a complaint against the contractor.
As of last Friday, the roofing contractor had finally paid the supplier and the supplier is holding my check until the other check clears.
So, crisis averted and resolved. (so far anyway.)
The CA state licensing board was 100% on the case and I’ve had 3 conversations with them over the matter. They called as soon as I filed my claim through their website and they’ve stayed on top of the process as the roofing contractor finally settled the matter.
The roofing contractor never once returned my phone calls or made any attempt to contact me until yesterday, when I received a letter telling me that the supplier had been paid and the lien process stopped.
For the contractors out there:
This contractor will likely be out of business in a year. Homeowners have been posting on the internet about what happened, this will greatly slow down new business coming in their door.
Not communicating with your customers during a time of crisis was an enormous mistake. Everyone knows times are tough right now. If this roofing contractor had returned calls and been upfront with his customers, they would likely not have freaked out and started posting on the web to warn future customers to stay away.
Because of the poor response from this contractor, they are done. They might have paid their supplier and stopped the liens at the last moment, but the internet is forever. Those negative reviews are never going away and future customers looking for a contractor are going to find them.
The floors are beautiful! Did the contractor install the floors with your choice of material? Or, did you have a flooring company (like Oceanside Abbey) install the floors after the work was done?
Fantastic re-do! Can I ask how long it took to complete?
Travis, thanks for the comments. We told the General contractor that we’d like to finish the wood floors that the the previous owners had put in a few of the rooms. They found out that flooring was pretty expensive so they offered us some cheaper alternatives. We ended up sticking with the original. They purchased the materials for us (I hope they paid for them after reading ArtEclectic’s comment) and hired a flooring specialist who installed them.
Deb, thanks for your comment too. It’s taken about two months to completion (which is today … Yay!) We thought it would be less at first, but we kept coming up with things we wanted to add. We were renting when we bought the house, so it was pretty easy to extend a month at a time.
Love this. You get a huge advantage over competing buyers with the cash and gonads to do a remodel right after purchase. The competing hoards are trying to find the perfect house, you just need something with bones & location and the rest you can fix.
Jakob, I wish I could say that what you’re describing was our strategy all along. For a few months, we were among the hoards trying to find the perfect house in Carmel Valley. Poor Jim took us out to look at houses in vain weekend after weekend.
Then this place popped up. It was actually there all along, we were just looking at bigger houses when we decided that we didn’t really need the room. (This one is 2400 sq. ft.) We had some cash set aside for a larger downpayment, and some more set aside for the inevitable repairs we thought we would have to make.
This place was only slightly smaller than the low end of our range. The location was perfect for us (location cannot be fixed as you point out). The previous owners had done a pretty good job maintaining and improving it, but there were some things we really didn’t like about it.
So we asked ourselves, “What if we settle for a bit smaller place, and use the money we’ll save on the downpayment combined with what we won’t have to spend repairing it to change the things we don’t like.” It all made sense and we can’t wait to move in.
But thanks for giving us credit for being that smart, anyway.
Just needs a big white and yellow charger bolt to go with the blue. But it definitely was a nice remodel, especially the downstairs.
livinincali, about the giant white and yellow bolt across the blue walls … she wouldn’t let me. Thanks for the comment. The general contractors are gonna get big heads if they read all these compliments on their work. We do think they did a great job.
Congratulations, New CV Owner!!!
Blowing out that wall was THE difference — incredible. Enjoy!
Thanks, tj & the bear. We agree. The rest of the changes were nice, and some of them were pretty important to us. But, if we didn’t think we could get rid of that wall, we would not have bought the house. We hated what it did to the space downstairs.
Most of that debris looked like the former wall. I was surprised they actually built such an awkward partition. It really screwed up the space, and the little windows didn’t help either.
The great thing about the blue in the laundry room is that it’ll make your white shirts look whiter! That’s why laundry detergent makers add blue dye in their products. 😉
Enjoy the new place!
Ah, yes! The bluing that they add to laundry to make whites look brighter. I think you’ve just given my wife a new rationalization for the blue laundry room. Actually, the blue rooms are starting to grow on me.
My theory on the windows in the superflous wall is that the developer knew they had a problem, so they threw in a few windows to try to create some kind of flow between the two tiny rooms. Instead, I think the windows just drew attention to what a design flaw it was.
Thanks for the well wishes, Francois.