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Fixing houses and saving money instead of trading.

04/18/2012

Ladies and gentlemen, I have been rather absent since about Christmas of last year. I haven’t had as much time to trade as usual because I spent most of my time fixing two houses. Being cheap, I did most of the work myself.

Below is a video of the first house. This place is a one bedroom, one bath house built in the 20’s. We did a complete rehab to the place including interior and exterior paint, new kitchen, new bathroom, and repaired bedroom closets. What made this place particularity difficult was the type of construction. Rather than standard 2×4 studs with plaster on the outside and drywall on the inside, this place is built with horizontal cedar siding on the exterior nailed directly to 3/4″ tongue and groove pine on the inside. There is no middle to the wall. This means when we had to reconstruct a wall or move something it didn’t just take an hour or so to put up some studs and new drywall, but rather it generally took over a day to buy the boards, cut the boards and install them. Needless to say, it was a real headache but it turned out very nicely.

Some interesting facts:
In doing this renovation, I raised the rent on the place by 35%
I leased it out prior to finishing interior construction
The renovation cost more than the original purchase price of this property
But, not including labor, all the materials came in under $7,000.

Take a look and see what you think. As a side note, if you are interested in some amazing returns in the real estate market, this is a great time to buy – hence why I’ve been splitting my time between the markets and fixing houses. Once fixed a house continues to make rental income. Forex is a little more management intensive.

Stay tuned and I’ll upload before and after videos of the second house we fixed. This one took a little over 8 weeks to finish up, the second one took just about half that time.

Exterior pre-renovation walkthrough

Interior pre-renovation walkthrough

Interior and exterior completed walkthrough:

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