The slowest house-flip in the province is now complete. This flip was so slow (how slow was it?) that it was more like a slow-speed roll. But now it’s done and we’re out with our shirts still on our backs.
A while back I wrote a column about this house and how trying to do a flip is so much more difficult than it appears on TV. We were minor investors in an estate-sale home in another city. (Mistake number one was having to travel too far to work on the house.) It was a three-storey duplex turned into a single-family home in an up-and-coming area. That family was composed of 7 people; five of them, rambunctious rug-rats. The damage to walls at child-eye-level was pretty astounding. Apparently they were allowed to run with scissors. One room was painted shiny purple – baseboards and all. And the kitchen was so disgusting that I wouldn’t put my purse down on the counter let alone eat anything in there.
The family rarely, if ever, took their garbage to the curb. We found it all tossed inside the garage where a raccoon was living in the best vermin buffet diner in the city, having gained access from a hole in the roof.
There was a host of other issues. The ductwork in the basement had all been taken down. The roof was on its last shingle. And it went on and on.
Our conservative budget to remodel the place was soon eaten up as we turned it back into a legal duplex. We found deals on everything from kitchen cabinets to flooring to local labour and nearly made it through in the black when an inspector came by and demanded the installation of a sprinkler system. Once that was completed and we spruced up the curb appeal we had no trouble attracting tenants. We did have trouble attracting buyers, so we decided to wait a while rather than sell at a definite loss.
Long distance landlords – not something we wanted to be. Truthfully, we bore little of that responsibility but we bristled every time an email arrived asking for another thousand or two for whatever had recently cropped up that needed fixing.
Finally, the area was booming again and the house was relisted. It drew much more attention this time and finally sold for an amount that will allow us all – after fees and commissions – to get out clean. We don’t make any money but we don’t lose it either and we’re a whole lot wiser for it.
My lesson is that flipping a house is a lot like owning a french-fry trailer; if you want to make money at it, you have to be prepared to do most of the renovating – or potato peeling – yourself. Even with a reduced labour cost, it still would have made more financial sense to do the work on our own. However, we all have jobs and couldn’t afford to do that, which brings me to lesson number two: unless you can afford to do that, you can’t afford to flip a house.