Diary of a real estate flipper

Flipper talks to rehab expert Steve Berges
By: Alison Rogers: Inman News
Like most people who work at desks for a living, my husband is slightly suspicious of my new freelance lifestyle. He called me the other day – a day when I was supposed to be looking at houses – and he heard the TV on in the background. "What are you doing, hon?" he asked.

"I'm watching 'Flip This House,'" I replied. "It's research."

Perhaps a result of the 72 straight hours of kidding I had to endure about that, I thought I'd do some nose-to-the-grindstone work: I put down the remote and picked up the telephone.

The nice guy at the other end was Steve Berges, a principal at Real Estate One Symphony Homes, and a builder/rehabber/investor extraordinaire. Steve has been investing and writing about it for 25 years; I had read his "101 Cost Effective Ways to Increase the Value of your Home" (Dearborn) and thought it was one of the best "bang for your buck" books I'd ever read. So I thought I'd ask him what does (and doesn't) work.

The amazing thing? He told me. Here are the highlights:

    • COMPS, COMPS, COMPS: You want to spiff up a house, without overimproving for
      the neighborhood (or the buyer). This is where your neighborhood tours come
      in. "Be consistent with what the market expects," said Steve. "In less
      expensive houses, where there's vinyl flooring in the kitchen and bath in
      comparable houses, you don't want to spend the money on tile and marble. In a
      more expensive house, though, that's what buyers expect." Remember your buyer
      probably has a list of 10 houses, so you want your house to look comparatively
      better than the other nine.

    • BRIGHT AND CHEERY: This is Steve's mantra. Paint the exterior of a house; take
      a navy-blue bedroom and paint it off-white; and install new lighting. "A four-
      bulb fixture that's a foot-and-a-half wide by 4 feet long is $105 at the Home
      Depot," says Steve, "and it floods the kitchen with light." He's talking about
      one of the new fluorescents, which have the advantage of being energy-
      efficient too; in a more up-market kitchen you might think about incandescent
      or halogen task lighting.

    • CURB APPEAL: That buyer with the list of 10 houses? You have to get them to
      stop with yours. That means make your house look inviting by mowing the lawn,
      put in a nice-looking front-door (you don't have to get a $2,500 oak or walnut
      door," Steve says. "For a couple hundred dollars you can have a nice-looking
      front door." You may also want to paint your house – you can even paint vinyl
      siding, though it's tricky. If the house is really dirty, power wash it first –
      it's absolutely worth it -- and then give it a day or two to dry. Paint
      adheres best to a clean surface.

    • THE KITCHEN IS THE HEART OF THE HOUSE: I asked Steve "Kitchen or Bath? – what
      if you have a tired house and can only fix up one?" His response was that the
      family spends more time in the kitchen, so, besides lighting, it might deserve
      new cabinets ($1,500-$7,500) and new flooring. Those '70s houses with the
      purple, peach or turquoise tile? Again, he says that you need to look at other
      homes on the market. "You don't necessarily need to rip out all that stuff, as
      long as it's clean and shows well." If you're going to do just a little to the
      bath, buy it a new floor or a new sink/cabinet combo.

    • MAKE FRIENDS WITH A HANDYMAN: I mentioned the "Flip This House" episode I had
      watched – where the team gets blindsided by termites – and I was surprised
      they hadn't noticed any signs. This reminded Steve that "there's always
      something unexpected" but he suggests one way to limit your surprise quotient
      is to get a buddy who's handy to walk through with you and alert you to signs
      of trouble – pre-inspection. My two cents: I wouldn't even get to the
      inspection stage on a house with water spots or tilty stairs. Buyers can run a
      quick first check for termites by taking a screwdriver and poke at some of the
      wood in the house – near the furnace and hot-water heater are good places to
      start, because bugs like to be warm too.

Great tips: I can't wait to see how they play out in the "real world."