by Brandon Turner | BiggerPockets.com
So should you invest in a fixer-upper? Despite a few cons, I would say yes, you should definitely consider it because of the overwhelming pros. However, before you jump into your next project, ask yourself these five questions about the deal.
5 Questions to Ask Before Investing in a Fixer-Upper
1. How bad is it?
There are many levels of severity when dealing with fixer-uppers. Some properties need just a few thousand dollars worth of paint, while others need a complete overhaul. As common sense would suggest, the less work a property needs, the less risk you’ll have that something will go wrong during the rehab.
At the same time, however, the less work a property needs, the more competition you’ll face. This is why I generally look for properties that appear to need a lot of work to the general public but that actually just need minor fixes. For example, homes that have a bad smell because of pets or cigarettes are a prime candidate for me, because smells are easy to rectify. An ugly exterior paint job or a bad roof are also fairly easy (if costly) to remedy, but they scare away more potential homeowners. So, before you buy a fixer-upper, I encourage you really look at the property and have an accurate estimate of what it’s going to take to fix it up. Don’t go into a fixer-upper blind.
2. Is it worth it?
Let me ask you a question: Is it better to buy a house for $120,000 that needs $30,000 worth of repairs, or a house that is $150,000 that is 100% finished? With all other factors being equal, the finished house clearly has the advantage. However, many investors fail to comprehend this logic and instead think “fixer-upper” automatically means “great deal.” It doesn’t!
Often, the cost of rehabbing a project will negate any discount you might get. On the other hand, if you could get that same property for $90,000 and put $30,000 into it to make it worth $150,000, now we’re talking!
3. Do I have the time?
Whether you plan to do the work yourself or not, fixer-uppers take time! You have to be present at the property often to make sure the work is being finished correctly, or maybe you’ll end up having to do the work yourself. I have a friend who bought a fixer-upper triplex with plans to live in one unit and rent the other two out, but it took him three years to fix up the two other units and get them rented! While this friend may still have a great investment on his hands, he lost close to $40,000 in potential rent over those three years because he didn’t have time to handle a fixer-upper.
4. Do I have the skills?
Most people who are looking to get started with fixer-upper rental properties plan to do the work themselves. I actually encourage this, as long as the work is on a small scale. Being able to do your own rehab can save you a ton of money and can help you get a good feel for how long projects take so you can better manage the hiring out of those projects in the future. However, if this is your plan, do you really have the skills to take on the project? If not, see the next question in this list.
5. Do I have the drive?
Or more importantly, do you have the mental skills and motivation needed to learn how to accomplish those projects? My first home was a fixer-upper, and I had never swung a hammer in my life! However, I picked up a book on home improvement and began learning on the job. I also called in a lot of favors from other people I knew and had them teach me how to do things. By the end of the project, I could install carpet, tile a bathroom, lay laminate wood flooring, solder copper pipes, and fix a leaky roof—not because I had the skill, but because I had the desire and motivation to learn.
By answering these five questions for every project you are about to take on, you can better decide whether it is the right path for you. Fixer-uppers can be a great way to supercharge your wealth creation, but they also present increased risk. Just be sure to do your due diligence on any fixer-upper you plan to buy and accurately account for the hurdles you might face. Then take action, and get a little dirty!
by SOPHIE MIURA
Finding the perfect hue to paint your room might seem like a purely aesthetic decision, but it turns out the choice can have serious consequences. While it’s well-documented that green sparks creativity and fiery tones energize a space, a report from Zillow Digs suggests color can also impact the value of your home.
The home improvement website mined data from more than 50,000 photos of recently sold homes to uncover color trends. Worryingly, it discovered that rooms painted certain shades consistently fetched a lower offer, forming a blacklist of paint colors to avoid. These are the three paint shades industry pros say you should avoid at all costs:
- Slate gray: Homeowners who opted to paint their dining room slate gray lost $1112. However, those who chose dove or light gray increased the sale price by $1104.
- Off-white: While this shade might seem like a safe bet, the study found that kitchens painted off-white fetched $82 less than the predicted estimate. Interior designer Emily Henderson told Money that some shades of white paint can make a space look “flat” or “dead.”
- Terra-cotta: People who took a risk by painting their living room this shade of orange took $793 of the value of their home.
Do you agree with these findings? What color do you consider to be the worst offender when selling?
Photo by Fraher Architects
For many people, the prospect of downsizing from a larger home to a smaller one can be quite the challenge. Sorting through possessions takes time. It can be emotionally taxing. It can be liberating.
We asked Houzz readers to share their best downsizing advice, and share they did. We gathered some of the best tips below.
Step 1: Get into the right mindset. Many acknowledged that shedding belongings can be stressful, and several had thoughts on the benefit of doing so. “Even if you’ve made careful measurements and found new homes for the furniture that clearly wasn’t going to fit in your new place, you may not realize until you move in that what you’ve brought just isn’t going to work,” writes Joanna Tovia of the Houzz Australia editorial team. The upside: “You have the perfect excuse to go shopping for new furniture,” Tovia says. Houzz reader Lynn B agrees: “Downsizing is a wonderful time to change to a more minimal style and change your style and interior colors.”
Keep in mind that you may have a few regrets when your sorting is through, advises Houzz reader connieay. “There will be some things that you wish you had kept, but the rewards of having less stuff will be worth it!”
Step 2: Decide what to get rid of. Often the most difficult part of downsizing is deciding what to let go of. “Holding on to our past, whether in the form of corporate work clothes or hefty grad school books, can be tempting because it feels comfortable,” writes Houzz contributor Laura Gaskill. She advises spending time gaining clarity on your vision and goals for the next few years. “What are you still holding on to that doesn’t mesh with that vision?” she asks.
In the kitchen, it’s wise to keep appliances that are multipurpose and frequently used, says Houzz reader Anthony Perez. “If you entertain at all, don’t scrimp on the table and chairs,” adds bonniedale22. Downsizing is also an opportunity to adopt a minimalist mindset with your wardrobe, according to Houzz reader andrealew, who recommends keeping on hand only enough clothes for a three-week vacation or, if you will be living in a place with seasons, three weeks per season. Some readers advised not burdening family members with discarded possessions, while others noted the wisdom of at least asking your family members if they would like any of the belongings before you toss them.
Step 3: Make the process as easy as possible for yourself. Given the mental work involved in deciding what to keep and what to pass along, you might as well take steps that will make the process easier for you. Having a place to sort through possessions is key, according to Houzz contributor Jeanne Taylor. “To keep your job organized, you might want to create as much empty space as possible,” she writes. “I recommend picking a category, perhaps holiday decor, and then pulling every item from that category out of hiding and placing it in the staging area.”
It can also be helpful to involve an organized friend, someone you can trust to help you decide what to keep and what to let go. For seniors who would be comforted by a sense of familiarity in their new surroundings, take a photo of the furniture layout and replicate it as best as possible in the new place, advises simplynancy. And on that note, taking photos of prized possessions, whether parts of a collection or simply something with a lot of memories, can make the letting go a little easier.
Houzz reader AJ advises something unexpected: waiting until after the move to see what won’t fit and getting rid of items then. “This is counter-intuitive and goes against everything you’re always taught, but I wish I had done it,” AJ says.
Step 4: Maintain a lifestyle of less stuff. “When you’re living in small quarters, excess items will stick out like a sore thumb,” notes Houzz writer Melissa Cowan. “Use smart solutions, such as underbed storage and built-in wardrobes,” she advises. And just because you’re downsizing doesn’t mean that there won’t be upkeep. “[A] smaller house does not mean less work,” Ann Haller writes. “It gets dirtier fast because you are using the same room over and over. Buy better quality furniture because it is the only thing you sit on.”
A final word: Go easy on yourself, and be proud that you’re tackling a downsize. It will take some effort, for sure, but you’ll get through it, with a reward of a lighter lifestyle on the other side.
By Arielle O’Shea, NerdWallet
If you’ve ever had a landlord, you probably don’t dream of being one: Fielding calls about oversize bugs and overflowing toilets doesn’t seem like the most glamorous job.
But done right, real estate investment can be lucrative, if not flashy. It can help diversify your existing investment portfolio and be an additional income stream. And it doesn’t always require showing up at a tenant’s every beck and call.
The trouble is that many new investors don’t know where or how to invest in real estate. So here are five options, ranging from high maintenance to low.
Matt Cardy/Getty Images
1. Invest in rental properties
Tiffany Alexy didn’t intend to become a real estate investor when she bought her first rental property at age 21. Then a college senior in Raleigh, North Carolina, she planned to attend grad school locally and figured buying would be better than renting.
“I went on Craigslist and found a four-bedroom, four-bathroom condo that was set up student-housing style. I bought it, lived in one bedroom and rented out the other three,” Alexy says.
The setup covered all of her expenses and brought in an extra $100 per month in cash — far from chump change for a grad student, and enough that Alexy caught the real estate bug. Now age 27, she has five rentals and is a broker and owner of Alexy Realty Group in Raleigh.
Alexy entered the market using a strategy sometimes called house hacking, a term coined by BiggerPockets, an online resource for real estate investors. It essentially means you’re occupying your investment property, either by renting out rooms, as Alexy did, or by renting out units in a multi-unit building. David Meyer, vice president of growth and marketing at the site, says house hacking lets investors buy a property with up to four units and still qualify for a residential loan.
Of course, you can also buy and rent out an entire investment property. Find one with combined expenses lower than the amount you can charge in rent. And if you don’t want to be the person who shows up with a toolbelt to fix a leak — or even the person who calls that person — you’ll also need to pay a property manager.
“If you manage it yourself, you’ll learn a lot about the industry, and if you buy future properties you’ll go into it with more experience,” says Meyer.
2. Fix up and resell properties
This is HGTV come to life: You purchase an underpriced home in need of a little love, renovate it as inexpensively as possible and then resell it for a profit. Called house flipping, the strategy is a wee bit harder than it looks on TV.
“There is a bigger element of risk, because so much of the math behind flipping requires a very accurate estimate of how much repairs are going to cost, which is not an easy thing to do,” says Meyer.
His suggestion: Find an experienced partner. “Maybe you have capital or time to contribute, but you find a contractor who is good at estimating expenses or managing the project,” he says.
The other risk of flipping is that the longer you hold the property, the less money you make because you’re paying a mortgage without bringing in any income. You can lower that risk by living in the house as you fix it up. This works as long as most of the updates are cosmetic and you don’t mind a little dust.
Randy Shropshire/Getty Images for FMB Development
3. Use a crowdfunding service
If you’re familiar with companies such as Prosper and LendingClub — which connect borrowers to investors willing to lend them money for various personal needs, such as a wedding or home renovation — you’ll understand the concept behind investing through a real estate crowdfunding site.
Companies including RealtyShares and RealtyMogul connect real estate developers to investors who want to finance projects, either through debt or equity. Investors hope to receive monthly or quarterly distributions in exchange for taking on a significant amount of risk and paying a fee to the platform. Like many real estate investments, these are speculative and illiquid — you can’t easily unload them the way you can trade a stock.
The rub is that you need money to make money. Real estate crowdfunding is generally open only to accredited investors, defined by the Securities and Exchange Commission as people who’ve earned income of more than $200,000 ($300,000 with a spouse) in each of the last two years or have a net worth of $1 million or more, not including a primary residence.
REITs, or real estate investment trusts, allow you to invest in real estate without the physical real estate. Often compared to mutual funds, they’re companies that own commercial real estate such as office buildings, retail spaces, apartments and hotels.
REITs tend to pay high dividends, which makes them a good investment in retirement. Investors who don’t need or want the regular income can automatically reinvest those dividends to grow their investment further.
REITs can be varied and complex. Some trade on an exchange like a stock; others aren’t publicly traded. The type of REIT you purchase can be a big factor in the amount of risk you’re taking on, as non-traded REITs aren’t easily sold and might be hard to value.
New investors should generally stick to publicly traded REITs, which you can purchase through an online broker. (See the NerdWallet analysis of the best brokers for beginners if you’re new to this world.)
5. Rent out a room
Finally, to dip the very edge of your toe in the real estate waters, you could rent part of your home via a site like Airbnb. It’s house hacking for the commitment-phobe: You don’t have to take on a long-term tenant, potential renters are at least somewhat prescreened by Airbnb, and the company’s host guarantee provides protection against damages.
by Dabney Frake
There are few words whispered with more veneration than ‘the kitchen work triangle’ — a decades-old term that still dominates kitchen design today. But does it still hold true in the modern world? Before you start your next remodel, get the latest thinking on layouts and decide what’s best for you.
The Original Work Triangle
(Image credit: Apartment Therapy )
In this layout, the thinking went, the cook didn’t have to go far: simply pivot from place to place as you moved through food prep and cooking. No need to walk clear across the room while carrying a heavy pot if the sink is right within reach. It makes a ton of sense and is a design which guides many kitchens in use today, as seen in Lori’s L-shaped kitchen above. The refrigerator, on the opposite wall out of the frame, forms a perfect triangle with the stove and sink.
A Cultural Shift
When the triangle came about, kitchens were mostly separate rooms or semi-closed off from the rest of the house. Housewives worked there to prepare the meal and emerged to the dining room to sit down and eat with the family in the evening. In today’s world, the kitchen is more of a relaxed hub, with more people likely to be in there at once. Guests often sit to chat with the cook (or multiple cooks) while they work, or kids might congregate there to do their homework.
So what’s the best, most effective, method? Instead of throwing the triangle concept out the window, the kitchen zone opens it up a bit for interpretation. The most important thing is asking what your space will allow for, who will use it, how you will use it, and how it can best be configured to meet your needs.
What do you think? In your kitchen, is the triangle obsolete, or has it just taken on a different form?
When we purchased this East Nashville project house earlier this spring, one of the things that first drew us to the property was this little room off the kitchen that was just BEGGING to become a built-in breakfast nook!
Here’s the before photo …
Isn’t the upgrade amazing?!
I don’t normally wallpaper ceilings, but in this tight space it creates a high impact, pulled together look. I am BEYOND pleased with how this turned out. And the best part is you can install this wallpaper yourself in a weekend.
The first step for this project was to build three benches, customized for the space. Collin removed the trim in the space, framed out the base of the benches and then added the seat back last.
The next step was to build the table. We’re not going to full DIY instructions (although let us know if you’d like to hear them all in a separate post), but Collin built a farmhouse-style table, perfectly fitted for the benches. The table top is about two inches smaller than the floor space between the benches.
If there are any vents or outlets on the wall, they should be extended to outside of the bench, not covered up.
For paint, Collin used two coats of stain blocking primer and then two coats of glossy untinted acrylic paint.
The next step was to install the wallpaper.
Our best tip is to be patient. Collin started by installing one strip from the front of the ceiling all the way down the back of the wall, and then worked out from there. For a continuous pattern, you can’t make it match from every angle, so we prioritized the front facing angle. The sides of the wall to ceiling don’t match, but the pattern hides it very well.
Last, Collin installed a fresh new light fixture.
When shopping for wallpaper, always order samples. I always order way too many samples, but it’s helpful because some of the time they look different in person. Samples can also help you get an idea of scale.
I’m happy we went neutral in this space because I can style it with pillows, flowers and baskets to reflect each season. I am SO EXCITED to have guests stay in our new home and I hope they love it as much as we do!
My partner in crime was in town and got to see our new property for the first time. I bribed her with some cinnamon rolls to snap a few photos … always works!
I hope this post has inspired you and shown what a HUGE transformation a little wallpaper can make! It made this space so much more thoughtful looking. It would have been nice without it, but with it it’s really special!
If you’re one of those people who has been terrified of wallpaper, this next paragraph is for you. 🙂
Wallpaper in 2017 is a whole new animal. It’s nothing like vintage paper that takes forever to remove (I am still somewhat traumatized from the painted-over wallpaper in our last home). These days it’s easier than ever to install AND remove. So easy that some of the time you can do it yourself (or at least remove it yourself if you don’t want to do the install). And there are countless new options that look super modern. So give wallpaper a chance.
Thank you so much for reading! I am beyond grateful to have you here. xx – Elsie (and Collin, too!)
Credits//Author: Elsie Larson and Collin DuPree. Project Assistant: Collin DuPree. Photography: Amber Ulmer.
From powerful pink to minion yellow, these are the hues you can look forward to seeing in home design next year.
By Kelsey Koss
Courtesy of Pantone
We’re still wrapping our heads around how to use Greenery (the 2017 Pantone Color of the Year) in, and already, we have more inspiration to ponder for the year ahead. Behold: The 2018 color forecast is here.
At the International Home + Housewares Show, Pantone Color Institute executive director Leatrice Eiseman revealed what color and design trends we can expect next year, and there seems to be something for just about everyone.
“Metallics we know are classic, but they have really moved over into neutrals,” Eiseman said. She also predicts a continued infatuation with iridescence, since “the human eye can absolutely not avoid” anything pearlized or translucent.
Another standout trend will include a movement to intense colors rather than pastels — music to the ears for bright color lovers.
“Intense colors seem to be a natural application of our intense lifestyles and thought processes these days,” she said.
Ready to start color scheming for 2018? Read on for the eight palettes you can expect to see next year.
Courtesy of Pantone
Resourceful: A palette made up of complementary blue and orange colors. “This is quite an interesting color combination,” said Eiseman. “It combines warm and cool tones that you just can’t avoid looking at.”
Verdure: Vegetal colors like Celery are combined with berry-infused purples and eggshell blue, symbolic of health, in this palette.
Playful: Think “Minions.” Bright yellow, lime popsicle, and all other things fun come together for this color scheme. “People need to stop and smile,” said Eiseman.
Discretion: Playful’s alter ego. Subtle hues such as Elderberry and Hawthorne Rose offer a new sense of strength. “Pink has developed more power than ever before,” said Eiseman.
Far-fetched: With warm, earthy hues such as Cornsilk Yellow blending with rosy tones, this palette “reaches out and embraces many different cultures,” said Eiseman.
Intricacy: A palette of neutral metallics (AKA, the “new neutrals”) with accents of dramatic Holly Berry red and yellow Sulfur.
Intensity: This is an eclectic mix of colors that evokes a sense of strength, power and sophistication, all balanced with black and gold.
TECH-nique: Bright turquoise, pink and purple colors anchored with Brilliant White and Frosted Almond nod to technology. This palette is all about hues “that seem to shine from within,” said Eiseman.
When LA-based designer Amy Sklar was growing up, her family moved every few years. “The homes ranged in style from mid-century modern, to a 100 year old clapboard home,” she recalls. “That exposure created in me real appreciation for a wide range of architectural and interior styles. And there was also a chance to redecorate my room every few years, which I fell in love with! That ability to reinvent, and ultimately find my own style.” Today, she’s able to do that for other people — a career that she calls a dream.
Today, we’re showing off some of Amy’s latest work. This home is located in the super-cool Silverlake area, and the space is just as on-trend as the neighborhood itself. From totally transforming the kitchen to installing new floors throughout, this is a home we’d love to live in. Amy tells us more:
Hi Amy! We’d love to know a little bit about the clients. What was their vision, and what was your priority when starting the design?
My clients were a family of 4, with 2 young daughters. They love to cook and entertain, so we really wanted to update the kitchen to make it easier to work in as well as create more flow between the kitchen and the rest of the home.
What condition was the home in when you started?
There was a low ceiling in the living room, a crumbling kitchen counter and a kitchen window that look directly onto a neighbors patio….not a lovely view.
Yikes! Okay, tell us a bit about how you transformed the space.
We vaulted the living room ceiling, to make that room feel more spacious and welcoming, as that is the first room you enter when you walk in the front door. Then we enlarged and arched the opening between the kitchen and the dining room, taking what had been a standard 36″ door and opening it up to nearly 6′ wide! We then arched the newly enlarged opening to match the arch on the opening from the living room to the dining room, so that it feels like the new opening has always been there.
With any project, there are bound to be hiccups. What were the biggest challenges with this property?
Ah yes, hiccups! On this project, the biggest hiccup was that when we went to vault the ceiling in the living room we found that the central ridge beam was not centered on the space! So, we had to make the decision to either drop the vaulting and relocate the beam to center it, (which would have lowered the overall height of the ceiling) or leave the beam off center and keep the height. In the end we went for keeping the height, and leaving the beam off center, and I think it looks great! It really adds a dynamic element to the space, and looks like it was meant to there!
Do you have a favorite room or feature in the house?
I love the kitchen, and the major amount of light we were able to borrow from the dining room by enlarging the opening, that transformation was so huge!
Finally, LA is known for great home goods. Where are some of your favorite local spots to shop?
I am a major Lawson-Fenning fan, I ALWAYS find something in either of their two locations — Silverlake and Melrose — plus they are lovely people! I also love Nickey- Kehoe, they have the most well, curated shop, and make incredible custom furniture! And for dreaming, Galerie Half, it’s like walking into an art gallery, just stunning.