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30K views 142 replies 39 participants last post by  willmego 
#1 ·
Cheese anyone?



You would think I should know better by now.



In truth I do.



I admit it.



I guess it really doesn't matter, there is just something about woodworkers, craftsman, and those of us who spend inordinate amounts of time in dusty, cramped, often hot or cold environments which we proudly show off as our kingdoms or domains which we call our "shops".

Oh did I mention the lighting in that makes you think your headed for early blindness.

That said, up front I admit I do or should know better than to take on another impossible project.

Of course I am going to be up against the wall time wise, short on money, rely heavy on faith and have a dream falsity's that borders on delusion for the end results of "This Old Mold House".

To refresh your memory, I have purchased a nineteen twenty three stucco huge home that needs saving from being condemned because of mold infestation.

It is located five houses from This Old Crack House.



The house is in dire straights and in need of serious tender loving care.

This is a understatement to say the least.

Most importantly it needs a homeowner.

For me a neighbor.

Start the skill saws, turn on the pressure washers, get the bleach out the adventures of "This Old Mold House" have started.

Wheres my respirator and rubber gloves?

I guess I really never learn or know any better.

So why fight it?

For all of use who call our selves craftsman its a calling I guess.

copyright all rights reserved 10-01-07 DJerzak
 
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#82 ·
Deal or no deal ?



Although I had spent a weekend doing an assessment, evaluation, preparing a bid and possible offer, I never heard a word from anyone connected with the house that

Not a peep.

I left the presentation open ended, though I never really put in a formal offer.

I didn't have a buyer at the time and I felt the market was unfavorable. I wasn't really looking for any work. Because the mother-in-law was very familiar with my work, I was asked by the sellers if I might be interested in buying the house to renovate and re-sell it.
However, based on the price they were seeking and the cost entailed in renovating the house to bring it up to could, the project was not viable, so I put it behind me.



Fast forward 14 months.

The market has deteriorated and the bottom doesn't seem to be insight yet. Every day there seems to be more bad news about foreclosures, sub-prime mortgage woes, slow housing sales, and housing inventory surpluses. In short the market seems dismal and in free fall.

In the back of my mind I have been thinking to myself, all that noise I hear out their in the housing market maybe opportunity knocking.

I am cautious however. Not only am I much more disciplined these days about buying properties, I no longer wear that pair of "rose colored glasses". Any wisdom I my posses is not a result of being so smart, it's derived from a lot of very expensive "life lesson" mistakes. It's interesting how quickly a person can learn something if it hits you hard in a spot located on your back side - your wallet. Yes, it's a great teacher; far more effective than someone giving advice.



Money talks.

I listen now. That wasn't always the case. On some of my projects I was absolutely convinced that my investment, time, skills, and optimistic dreams would surely pay off.

Oh how I learned.

Reality bites. Dreams are just that.

Mortgage payments need to be made on time regardless of how the dream is progressing. How quickly the dream fades when the mortgage due-date comes around. The same can be said for how quickly the "money-tree" dries up and stops producing fruit. At this stage of my life I no longer need the practice or experience of doing a remodeling job or project. I have had a long history with these learning projects. I won't possibly live long enough to make all the mistakes on this learning curve. My money will run out long before I find and do a perfect project.

A good friend and former client, to whom I had previously sold a house which I had remodeled, was forced to sell the house back to me after he became an unexpected victim of downsizing. Without warning, his long-term job had been eliminated.

After his initial shock, denial and a bout of depression along with his house going into foreclosure, I made a deal to buy it back. I then finished the remodeling that he couldn't afford the first time around and resold the house at a profit.

He moved back home, returned to technical college, and graduated becoming an electrician.

After almost five years, which consisted of taking college courses, working two jobs, and paying off his debts, he completed his apprenticeship becoming a journeyman electrician. While doing this, he was able to save enough money for a house down payment. He was now ready to ready to buy another house. He really wanted to move back to our neighborhood.



He asked me to keep an eye out for a home in our area. He knew I would know about the houses that were, or would be, offered for sale.

Almost everyone who had a house for sale approached me before placing their home with a realtor. They knew that, not only could they save the selling commission, I would buy their house as is, at a fair price.

I had several clients who would wait until I found the perfect house for them.

With the market so down, I no longer bought and renovated houses to place them on the open market. I wouldn't start a renovation without having them pre-sold.

I had been approached by the owner of a house across the street from me who was forced to sell because of his divorce. His youngest child had graduated from high school and moved out. He planned to sell his house before winter set in.

I mentioned this to my friend who indicated his interest. The timing was almost perfect. He had applied for a new position wanting to get off the night shift after almost three years.

So I arranged for a showing of the house. I had provided the owner a rough idea of what his house was going to be worth considering the market and what I remembered the house to be like. It was simply a ball-park figured or a starting point. He knew this and was comfortable with this arrangement because he wasn't ready to sell quite yet.

We toured the house. It was disappointing for me. The house certainly had fallen on bad times. It was obvious to me that the demands of being a single father of two, one of whom was in college, didn't leave money for upkeep.

I knew that he had taken out a second mortgage just before his divorce, cemented the driveway and had done some other select remodeling like refinishing the hardwood floors.

The house was small to begin with and poorly laid out. It didn't flow well. It also was in need of updating and required a lot of maintenance. The biggest shock and disappointment was the presence of mold in the bathroom.



Certainly all these defects could be overcome in the remodeling, however this would be time consuming and costly. Based on my experience and a quick assessment, my preliminary estimate was about $25,000.

I felt this was a lot of money for what the end results would yield. Considering this, I knew the purchase price would have to reflect an adjusted value. If it did, my attitude towards the house might be somewhat different. Only time would tell. This was simply a tour.

After the tour, my friend and I had a frank discussion about what needed to be done. He seemed not in the least bit discouraged from the possibility of making an offer.

I less enthused. However, it wasn't my money or decision and I would merely be a neutral resource he could rely upon for an accurate and honest evaluation.

Before touring through the house, I had indicated that the house should be valued in the mid $160,000 range. After seeing it, I adjusted the price downwards a minimum of ten thousand dollars. This figured was really only reflective of correcting the glaring and defrayed maintenance.



I really had lost my enthusiasm for this home. I gently suggested that, because of the number of houses for sale and bargains that are available due to the depressed home market, we at least look at some of these for comparative values.

However, he seemed to dismiss the idea because this was the only house in the immediate area.

Again it was his money so I dropped the topic and focused on the task of what it would take to bring the house up to code and accomplish what he wanted in the remodeling project.

To me, this was a daunting task. We had some time because the owner wasn't ready to sell and my buddy hadn't obtained his new.

I went to work doing a comprehensive analysis and bid for the work that needed to be done. All the time I was doing the bid work I had a nagging feeling about putting in a offer for this house.

About a week later, while my buddy and I were in my driveway, the owner stopped and asked whether we were still interested in his home.

I gave him a thumbnail sketch of all that I felt needed to be done and an honest assessment of the condition of the house with a reflected "ball park" price.

He seemed a bit taken back, but understood. I was unsure where his reluctance was coming from. I didn't know if it was that he felt it was worth more or had hoped and was merely in denial. He clearly knew the state of the house market and that he was going to have to sell regardless of this, splitting any net proceeds with his ex-wife.

At this point I was unaware of the amount of his mortgage. However, I had a hunch as a result of re-financing just before his divorce, that he was very close to owing more than the house would bring in the depressed market conditions.

He informed us he was leaving for a vacation in Florida with his new girl friend and would let us know if he would be able to consider our ballpark offer.

I reiterated all of the reasons for the offer, the fact that there would be no commissions and that the house would be "taken as is" along with it being a sure sale because I had my buddy get a pre-approval for his mortgage.

He thanked us and said he would get in touch with me and let us know his answer upon his return.

My buddy had received and accepted his new job offer increasing the urgency to buy and renovate a home up several notches. He lived with his parents, so it was a great advantage to be able to live there while we finished all the remodeling before moving in. From experience, if the remodeling is extensive, I will no longer be the one doing the work. It simply is too difficult to work around all the dust, distractions, and obstacles of an occupied home.

Been there - done that; but no more.

Over the proceeding period, my buddy keep bugging me about whether I had contacted or heard from my neighbor on the status of his decision of pursuing our offer on his house. The answer was always the same. I had no contact and no new news.

Everything now had fallen in place and my buddy was more than ready to get a home an get going on the rehab project. He would do all the electrical work and whatever else he was capable of doing to save money. The clock was also ticking as summer was over and fall was fast approaching.



Late fall and early winter can be brutal in Minnesota. He didn't need to remind me of these facts. I knew this only too well after doing several projects during this time of the year. I have the frost bitten scares on my hands and feet to prove this.

I could tell my buddy was annoyed and anxious with the lack of an answer.

Disappointed, and a sense of frustration. I suggested we begin to check out some other homes that were being offered for sale near out neighborhood. He was clearly lukewarm to the idea.

I hung up the phone and was sitting in my formal front parlor where my writing desk is, in full view of the house he was interested in buying. I wondered out loud if I should go over to my neighbor's house and ask about his decision about selling his house.

Something told me no; don't go over there.



He clearly told us he would get back to us with his decision. But I realized that I had soured on the home and felt strongly it wasn't a good value. Additionally, with the market as bad as it was, I was convinced we could find another house that was a better value proposition for him.

As I sat looking out the window of "This Old Crack House, I looked across the street, four houses down, to see the corner house on which I had 14 months earlier done a comprehensive analysis. I never did hear a word from the son-in-law or anyone else for that matter. Then I remembered that I had not actually put in a formal offer 14 months earlier.

I had often wondered about the status of that house. I hadn't seen anyone at the house for almost a year and knew the owner was in her eighties. She had moved closer to her daughter several miles away. The house had stood unoccupied all this time.

I wondered out loud if the house might be available for sale now. I knew that there was an ongoing expense of having the yard mowed, snow removed, heat, lighting and other monthly expenses.

I picked up the phone and called my buddy back and mentioned that I was thinking about calling the owner of that house and seeing if it might be for sale yet or again. I gave him my reasons for doing this, including my true feelings toward the house in which he was interested. I reminded him that we had heard nothing about the owner's decision to sell or not.

My buddy recalled the corner house. He had actually given me a bid on the electrical work and helped me prepare my analysis.

Although he knew it needed a lot of work and suffered from mold, his recall of the house was surprisingly positive. I told him I had no idea if it was even available but was willing to make the call and find out.

I had to track down the number first for the lady who owned the house. I had never talked to her as I only had dealt with her son-in-law. I knew only her name and what town she supposedly lived in north western Minnesota. I got the number from information.

I dialed the number and an elderly lady answered.

I introduced myself and said, "I'm sure you don't remember me, but I'm the one who lived four doors from you and did a compressive bid on the possibly of purchasing your home in the cities."

She instantly responded in a friendly voice, "Oh, I remember you."

I made some small talk then asked if she might be interested, or would consider once again, in an offer on her house.

She interrupted me informing me that is was very hard to hear me. She was 84 now and was hard of hearing.

She then told me that, for the first time this summer, her son-in-law David would be down to the house on Tuesday. I asked her if it would be ok if I called David to discuss this with him.

She encouraged me to do so. I also asked her if she was aware how much the market had deteriorated since I had last talked to her son-in-law 14 months earlier.

She was well aware of the market conditions and shared that the reason her son in law had not been down this summer was because of the tough housing market and construction economy. He was a job foreman for a large twin cities company and there simply had been no work.

I obtained the number from her to contact her son in law and called his cell phone. I reintroduced myself and told him that I had called his mother-in-law to ask her if she might be interested in selling the house.

He was driving in his dump-truck, working doing his side-line business and told me he thought she might and that he would be down in the cities on Tuesday. He said he would talk to her and if she was interested in selling we could meet when he was here.

I hung up the phone and called my buddy and told him that I was to meet Tuesday with David after he had a chance to talk to his mother-in-law.

I began to wonder what her decision might be. I really had no clue but hoped she might sell because regardless of whether my buddy was interested in buying the house or not, I was.

I had been looking for a project for a while and had been on the sidelines.

Was this to be?

What would the answer be?

copyright all rights reserved D.Jerzak Dec 4 2007
 
#83 ·
My Guess is Yes, And you are in deep do-do again. All this stuff to do.

Dusty you are a rich man in your efforts to help other people. I know you are blessed in many ways that you might not even be aware of.

Bless you Dusty.
 
#93 ·
Making a deal on a house full of mold…what's up with that?



Most people I know who are contemplating a home purchase, hire a licensed inspector to analyze the house in great detail and prepare a report for them so they can make an informed decision.

I take an entirely different approach.



If it's not an old crack house, ready for condemnation, full of mold, falling down, in need of desperate repairs or a bull dozer, then I'm not interested in buying it anyway.



I wouldn't know what to do with a house that wasn't sorely in need of work. I am who I am and stick with what I know - disasters - home to me.

I buy them as is.

Yes I'm supposed to know better. After all, I am a state licensed inspector. I even specialize in advising people about these types of homes. What is the matter with me? It must be a personality flaw. I can't figure it out so hope you don't waste your time trying either.

On Tuesday, I had an appointment to meet with the home owner's son-in-law. I had previously provided him a compressive analysis on a house from which his elderly mother-in-law had moved.

Then, the timing was wrong. The market had just entered a slumping period. I had no ready buyer for the house. I wasn't willing to an offer that I thought I would have been acceptable to the owner.

How things can and do change in fourteen months. This time it seemed they changed for the worse.



The housing market was at an all-time low; foreclosures were at an all time high and there appeared no end in sight.

My buddy had completed college and became an electrician. He just landed a new job and after six years was ready to buy another home.

We had been dealing on another home but had not heard if they were interested in selling it at a fair price reflective of its value.

At the last moment I decided to once again contact the lady who owned the house four doors down and across the street from my home "This Old Crack House.

Tuesday arrived and her son-in-law contacted me when he got to the house after work. This was only the second week this year that he had work in the cities. It has been a tough year in construction.

We met at six o'clock. A few minutes of catching up with how his family was and his mother-in-law and other normal pleasantries and we got down to the business of why we were there.

He clearly understood the market had significantly deteriorated since fourteen months ago. The difference this time was that I had a buyer for the house who was already qualified and pre-approved for a mortgage that would cover the renovated value of the home.

I reiterated that there would be no commission charged because I would do the purchase agreement and we would take the house as is - mold and all. The "and all" part was forty years of deferred and non-maintenance.

He understood. He seemed much more engaged this time and attentive to what I was saying.

I cut to the chase and said, "David, if you and your mother-in-law want to sell this house and take a fair offer we can get this deal done tonight."

I then offered him one hundred forty thousand dollars. He asked if that was my final offer. I said I am open to a counter offer but didn't have a lot of room to budge on the price.

He knew why this was the case because we had reviewed and added to the list of things that I felt had to be done. My estimate to do just the minimum things I felt necessary was thirty thousand. To do a full renovation would cost much more.



I laid my cards on the table. No games, no double talk, just the facts.

I was honest and open. I had no agenda other than to strike a fair deal for both parties.

He then said he would like to get at least one hundred fifty thousand dollars.

I looked him right in the eye and said, "That amount wouldn't work for us."

He asked what would. I said we could split the difference, in the selling price and we could structure the purchase agreement that would allow them to pay closing costs and certain remodeling expenses.

I told him we were in basic agreement over the final purchase amount, now it was a matter of structuring the purchase agreement so it was palatable to all.

I also pointed out that being we both had others to answer to we would need their approval and agreement. I informed him I would be passing through the purchase of the house directly to my client thus saving the costs of a second closing. I would only be doing the remodeling of the project. My role would limited; I would be the facilitator and general contractor.

I also would be the "back up buyer" in the event that my buyer failed to perform for any reason. As I explained I would be putting the money up front to fund the remodeling costs.



These costs were estimated somewhere between thirty and thirty eight thousand dollars depending on the budget and choices my client made. Certainly, I had no interest in putting that much of my own cash into a project without performing a successful conclusion.

He had more than average knowledge about construction as he earned his living from it. He knew that I had performed on over 10 properties in the neighborhood and that I had a letter from my bank guaranteeing my performance along with a pre-approval letter for my client from his mortgage company.

I went prepared and ready to do business. We had presented a fairly convincing case. He knew this and could see the evidence right in front of him.

I told him regardless of what my client said my word was good and I would honor this deal. I stood up and looked him right in the eye and asked outright, "Do we have a deal or not"?

He responded, "We will make this work".

He then shook my hand and said, "Prepare the paper work and I will take it to my mother- in- law". She wants you to have the house and wants the deal to work. She left me to decide. I think it is a very fair deal and will recommend that she take it.

I told him I would prepare the paperwork and send it up to him in a day or two. I knew he was leaving again to go back home. I explained that an early start was necessary for me because of the potential for weather-related problems, not to elaborate on other scheduled commitments. I knew that we had less than six weeks to complete all the remodeling and perform the closing of the house. I also informed him that I had an annual two week hunting trip scheduled in western South Dakota, right around the corner.

He understood.

I left, walking down the street back to my house, "This Old Crack House". I was already on the cell-phone to my buddy and client informing him of the news that I had a deal and he needed to come over right away to either accept or reject the deal. Regardless, I was going to buy the house, remodel it, and put it back on the market for resale.

I made it clear that my preference was to have him buy the house for several reasons; market conditions, my timing issues and the fact that it was a much better deal for him than the other house in which he was interested.

I would reveal the details when he got to my house.

Within an hour, he was at my house and I presented the deal.

The purchase price would be 141,000.00. For starters, this was 25 thousand or so below what the 'range" was for the other home he was interested in. This house was also on a corner lot, had over 600 more square feet and offered a lot more potential than the other house.

The costs to bring both homes up to code and make the necessary changes to make them very livable and appealing were very close in estimate. Both houses would need between $30,000 and $40,000 of remodeling depending on which options he chose.



In short, it was a no-brainier.

He could see this, he knew I was passing through all the savings and he would likely be inheriting substantial equity.

I was upfront with all my numbers for doing the construction and remodeling including my fee. I am a big believer that regardless of who it is, there needs to be a fee involved for doing the work or practicing your craft of trade.

I have found that hiding these charges or fees usually leads to resentment or misunderstanding.

Being straightforward puts all the cards on the table giving the client an opportunity to reject the deal if it isn't to his liking.



My policy has been and is, "In God we trust, all the rest of you pay cash and we do a detailed written contract".

I don't care if you are my immediate family, best friend, acquaintance, client, enemy, or the king of England, I insist on a detailed contract. No exceptions.

Let me reiterate in case I didn't make myself clear on this; no exceptions.

When things are clearly spelled out, there are no ambiguities, nor misunderstandings, and "he said, we said, you said arguments.

End of discussion.

If this seems harsh to you or overkill, so be it. I have one word for you.

Next!

Move on because we won't be doing business. I could and intend on writing a whole blog on this subject - moving on.

My buddy and I got together and hammered out the details and a purchase agreement for the property. The agreement was simple, concise, easy to understand and contained enough information to make it very clear what the sale of the house consisted of and who was responsible for what and how much. This agreement was only two and a quarter pages.



I will be forever grateful for my Para- legal back ground.

We hammered out the agreement, I called David the son- in-law with the details of the agreement and explained how we structured our offer and asked three questions of him.

They covered;

1. Do you have any questions and understand exactly what we are asking and offering?

2. Would you like to offer any additions or deletions?

3. Are these acceptable to you?


I then suggested for his peace of mind that he have the agreement reviewed by his attorney. He may suggest something that we had both overlooked.

I then informed him I would be sending the offer overnight with earnest money and I had highlighted where his mother-in-law needed to sign.

I like to keep things very simple. I find there is less chance of a misunderstanding this way. I have found any and all agreements can be challenged. What it really boils down to is trust understanding and honesty.

Whenever the slightest deviation in construction occurs, or when I have not used straightforward language in the contract, resulting in a complete understanding on the part of all parties, that is when I have run into trouble.

I don't allow this to happen any longer.

No good outcome for any of the parties has ever come from a misunderstanding or lack of clarity.

Be honest, up front and clear and you will be rewarded and happy.

From time-to-time a deal falls apart.

That is life.
If you approach ever transaction with honesty, integrity and detail, along with thorough and simple easy to understand details, the less likely you will have a deal that falls apart.

In reality, it's better for an agreement to fall apart before you get to the closing and are in so deep that there are substantial financial losses. I find that the more thorough you are, the smoother the closing.

If you are hiding something, or not being fair and honest at some level the other party feels this and acts according.

It is amazing how human beings have an ability to sense something is "foul" without necessarily knowing what it is. They know when something "stinks" long before the smell is evident.

I then prepared the purchase agreement documentation, the construction bid and scope of work with prices and payment details for my client to take home and review with his Mother, Father, 589 attorneys, neighbors, friends and even Oprah Winfrey if he wanted.

I simply don't care who looks at these documents because whoever they are, they are easily understand.

If they come back with a lot of "legalese" and hard to understand changes, I will review but likely decline the offer to do business.

Why? My experience and maturity tells me that we won't get along very well and the deal has a high potential to go south and fall apart somewhere in the mix.



I don't need or want the headache.

I would prefer to walk away than enter an agreement with the potential to destroy a friendship.

Because, you can darn sure bet that at some point down the road, it will get ugly.

My favorite phrase - "not interested!"

Next!



I then will shake hands wish the person luck and move on.

And that's just what I do. I never look back. No regrets no second guessing.

One reason I am so adamant about this is that my time is worth something, as is my craft. The person helping you is worth the same amount, unless they have special skills that make theirs worth more. If one doesn't feel his time is worth anything or want to charge for you for his time, that is fine but then at least seal the deal with a cup of coffee or a dime. That way there is no future misunderstanding.

I assure you that, if one is expecting things to be "made right at the end" without a clear up front understanding, then he will inevitably be disappointed and become resentful.

I also firmly believe that if the homeowners are involved in working on the project, then they needs to account for their time and the value that they place on their skills in contributing to the project. This not only helps establish the value of their contribution to the project, it helps put their expectations into perspective.

There is no such thing as a free lunch or "sweat equity". Those are simply terms used to justify and explain working your butt off for nothing. They are warm and fussy feeling words for doing a portion of the work.

Trust me, anyone who has ever contributed "sweat equity" would tell you that, that is exactly what they did, sweat and there was no equity involved.

To avoid this, be realistic when preparing your offer or bids on any project, even if it is a small job. Be honest about your expectations for your time.

You will find the bigger the project the more likely you will be disappointed in your return on your personal investment.

This is another whole blog; I will defer that for a later date.

After preparing all the documents and papers I gave them to my buddy and asked him to take them home and do what he had to do to make him comfortable enough to sign or reject them.

Time was of the essence and with or without him; I was pursuing the purchase of this
house for my rehab project.

I told him to call me in the morning. I wished him a good night.

Regardless of what it was I was going to sleep well.

I slept well.

What would his decision be?

copyright all rights reserved D.Jerzak Dec 12 2007
 
#94 ·
Dusty:
Just a point of interest here.
Why post a long protracted diatribe about how you manage your business affairs on a public woodworkers forum then suffix your remarks with a copyright notice?

I don't mean to quarrel with you but the information that the majority of us post here is given freely and without further encumbrance.

I just wonder why your posts should take on a different value from the rest of our efforts?

Bob
 
#106 ·
We have a deal !



My buddy knew the deal for the house was a good one and never hesitated when deciding to put an offer in on the house.

He did just that.

I wrote the offer up along with the contract for doing all the demolition, construction and remodeling work.

The documents were clear, and concise in addition to being easy to understand.

I called the owner's son-in-law to inform him that the purchase agreement would be sent overnight in the mail. I asked him to get back to me as soon as possible after reviewing them with his attorney. He understood that we were dealing with a tight time line.

My buddy put the purchase agreements in the mail. It was a setback to learn that there was no Saturday delivery in the rural area where the owner lived. We had intended on starting the demolition process early Saturday morning in order to the completion of the project before I left on my annual two week hunting trip.

When I spoke to the Son- In -Law about no Saturday delivery in his area, he wasn't surprised.

I explained that the delay could cause an extra month or better to the closing of the house. He knew that we had structured the purchase agreement in such a way that the remodeling would be done before any mortgage company issued a mortgage on the property. The house was inhabitable due to its condition. It would never pass code inspections or any mortgage appraisal necessary to secure financing.



I had read him the purchase agreement word-for-word and informed him that it was signed with a check for the earnest money enclosed and on its way.

He had already obtained his mother-in-law's agreement to the terms and sale price on Friday night. She was so elated that I had bought the house and was going to refurbish and resell to someone whom she knew used to live in the neighborhood.

All I needed was the keys to get in the house and start the demo. Every day was critical.

When I plan a house renovation project my estimates have to be accurate and my schedules right on the money. This keeps the project moving forward, and on budget.



I pride myself for doing projects on time on budget. I am well known as an honest straightforward person who keeps his word. My word and a handshake is a contract to me.

No exceptions. None!

David, the son-in-law knew this and said, "Dusty, I know and trust you! I gave the lady across the street from the house a set of keys as she has been keeping an eye on the place. I'll arrange for her to give you the keys so you can get in right away."

I called my buddy and my business partner in the construction business and told them we would start the project Saturday morning at 8:00 am sharp.

I didn't sleep well the night before we were to start the project. Even though I have done several of these projects I still get both excited and nervous. I always wonder what I have inadvertently left out in my bid or what unplanned expenses I will find awaiting me as I get into this project. It's inevitable and expected.

The trick is to be as prepared as possible for them with a contingency fund that allows for the unexpected. The other key to dealing with this is to determine what needs to be done, put a plan in place as soon as you can, then move on.

It's a matter of taking control and not letting the problem control me. Often, those who are new to remodeling, or doing their own project, let themselves become overwhelmed or discouraged and the end result is a derailed or greatly extended project. Frustration seems to do more to derail projects than anything else, including money issues which are a large factor.

Often I've found that a lack of support and good information, or simply being in over ones head without having the required resources is another barrier to finishing a project on time and within budget. Sometimes, all that is required is to ask the right questions of the right people but pride frequently gets in the way.

There is nothing wrong with asking for help; in fact it is honorable. None of us can know everything, or are born with the skills to do the tasks which others spend years perfecting.



I have found that that through networking or simply asking, reading, researching or observing someone else do something, I often go away thinking, " I can do that".

For the most part, most people are very helpful. Just ask. There seems to be a little teacher in all of us.

If the person you ask isn't forthcoming, don't stress. Just move on; someone else will be glad to help.



Long ago I realized that I would never live long enough to make all the mistakes and learn all the trades. However, that doesn't stop me from learning something new every day and on every project.

I am a visual, hands-on learner. For me, this is the best way to learn; to watch and take part. Hands on, if you will.

Once I have tried a task, I like to read more about it. By doing this, I learn shortcuts, tricks, and hints from the advice people have to offer. I am then able to apply what I have learned, add what seems to fit or make sense from the things that I have culled from others and simply discard the rest of the information I find less helpful. It really is that simple.

My two helpers showed up early, I could almost feel the excitement of getting the project started. We stopped to eat breakfast. I took the time to do an overview of the project. I also composed a list of tools that that I needed to be taken to the house.

Several years ago some friends got together and bought me a little red wagon as a "gag" gift for my birthday. They always said I was like a kid in a sand box when I was in my shop or working on a house project.



I promptly put the wagon to use as my "mobile" tool carrier. In later years I used it in for taking my elderly male basset hound on daily walks. His bad arthritic hips kept him from making it under his own steam.

The sight of me pulling one basset hound in the wagon while walking two others was an open introduction to meet many of my neighbors. I was referred to as the "basset hound brigade". It seemed every one had to come out to the street and bring the dogs a treat.

I often wondered if my male basset hound just wanting treats simply figured out the soft spots of humans and was coning us all about his hip. He was, after all, a smart dog.

I have some simple but rigid rules that I follow when I do a remodeling project. I have learned a number of these the hard way. They say experience is the best teacher.

Boy, they weren't kidding.

I find one area of the house that I can use as a staging area for all my tools. The rule is simple. When you need a tool you go get it from that area and only that area. When done you return it to that area.

No exceptions.

This way, everyone knows where the tools are and if they aren't there then someone is using them. It also makes it easy at the end of the day to take a quick visual inventory to see that all the tools are back.

It is very easy when doing demolition work, or when amongst the chaotic atmosphere of construction, for someone else pick up one of your tools thinking that it was theirs.

Consequently, I developed another rule, I spray paint every tool I have my "color" which is a very bright florescent pink. That allows me to easily identify my tools and keep them distinct from any other subcontractors who might be sharing the job site with me.



It is amazing how few tools went missing after I started doing this. Funny how others don't find hot pink to be their color of choice. Works for me! I could care less about the color I'm more concerned about my tools remaining with me and being around when I need them.

I have also learned to bring only what I will use and need. Granted, this list has become very extensive and I have been fortunate over the years to be able to buy and assemble a compete set of tools only to be used on off site projects. None of my main shop tools are allowed off site.

This rule grew out of the frustration of going to use a tool in my shop only to find it missing or it dull, sometimes broken from the abuse they are subjected to on the job site.

No more!

We arrive at the job site and quickly do a visual overview of what needs to be done and who's going to be responsible for what.

Even though in this case the homeowner a journeyman electrician is going to be helping with all phases, it's important that he's on same page as us. I always make it clear in advance who is in charge of what part of the project. When we get to the electrical work then I follow his lead.

Someone has to take responsibly for each phase of the project. Without this clearly spelled out and understood, I have found the project is subject to the high likelihood of costly mistakes. In addition, it's a prescription for lost time.

In construction and remolding there is an order in which things need to be complete. Any deviation or departure from this can have a major ripple effect on the project.

One truth that I have come to know and understand well is, lost time will not be made up, it's lost forever.



This becomes very important when the crunch-time comes such as when closing or inspections are set up and the work isn't done to meet these deadlines. Where this can really hurt is when a subcontractor is scheduled but an earlier delay means the site is not ready. More often than not, the ripple effect is enormous because the contractor has other clients and appointments that have to be keep and rescheduling becomes a real nightmare. There is nothing more frustrating that to be at a dead stop with the project waiting for another subcontractor or inspector because of something done or not done that could have prevented this from occurring.

Of course, these things are going to happen. The trick is to look ahead and anticipate what needs to be done, keeping a watchful eye on the schedule and adjusting when you can.

There is a simple name for all this - organization!



It's a matter of experience, it's a skill learned over time. It is essential to stay within budget and on time. It's the biggest contributor to the bottom line.

In this era of and harsh competition, it is very easy for a good job to go "south" in a hurry. Regardless whether the work is done to earn living or by a owner/builder working on his own home, time is money. It is important to keep the project moving forward. So many projects never get finished because of costly mistakes, loss of interest, frustration, or lack of funds. Most all of this is preventable.

Having a realistic schedule is important. Staying on schedule and moving forward will assure that one stays interested in the project. It seems that if one start letting up, before long the project just starts dragging. In turn, this usually leads to a loss of enthusiasm. Other priorities seem to take president, and the conclusion of the project is interminably delayed.

The plan of attack was to start demolition in the basement. The existing bedrooms, kitchen and bathroom were a disaster. They were not built to code. They were crumbling or rotting and mold was present. The rooms were well over forty years old and had outlived their useful life.

The simplest solution was to demolish all these rooms and take everything back to the bare walls.



We began in the back bedrooms that were in the basement. The walls that separated the rooms were only two by two's. The wiring was inadequate. Mold was everywhere and the rooms were small and dark.



The new plan was to demolish the basement and to build back only one legal bedroom with an egress window and closet along with a new three quarter bathroom. The other area simply would be closed off until some day when the budget allowed for finishing off some sort of family or recreation room.

The utility room had to be rebuilt replacing the plumbing with a complete new electrical service installed.



This was in the budget and part of the plan. These items were a large part of the approximately twenty eight thousand dollars set aside for this remodeling project.



The heating system was one variable that had not been determined. We could not fully access our needs until the basement demolition work was completed. The existing heat system was hot water heat with a newer boiler that had been installed less than ten years earlier, and had seen limited use. We were unsure what condition the pipes and radiators were in and until the demo was completed we couldn't make a final decision.

This was one of the budget considerations for which contingencies had been set aside. From the beginning, I was convinced that the whole system would have to be replaced. One compelling reason for this was the fact that the homeowner wanted central air conditioning. The cost of adding a unit from top down was more money than to replace the heating system with forced air, central air, and new ductwork built and installed.

The logistics of installing an air conditioning system in the unfinished area above the living space would have been complicated and expensive. One oblivious difficulty was to cut vent and ductwork through the existing beautiful old plaster ceilings and walls with unique cove work.

All of these things had been taken in account when the first offer was put in and the budget presented to the home owner. These were going to be choices he had to make. I had prepared bids with costs for each one of these choices. It was up to him to select which options he wanted.

That is the beauty of having everything in writing in advance with hard costs and a clear understanding.

No surprises, no mystery or disagreements later. None of this, "Oh you didn't tell me that … or I can't afford this" when the project is torn apart and wide open.

It is funny how, to this day, I see the same things start to happen early on in a project. For example, it's always exciting to tear something down with all the adrenaline running high. However this cannot only be unsafe it can cause a lot of extra work and often non-budgeted costs that aren't necessary.

It is easy to get caught up in the moment and just start wrecking things. It's all junk and has to be demoed right?

Wrong!

What good does it do to just tear out the walls and leave the debris to stumble over or nails stick out to step on.

You have to keep it organized and work smarter not harder.

After my two helpers got going at it for a few minutes they had a small pile of demolition debris that they were already tripping over with wires still connected, dust still lingering and sweat running down their faces.

I said, "Now what? You going to file for unemployment?"

Of course they new I was being sarcastic.



However this was a teaching moment. I pointed out that they just created a safety hazard with the nails and pile of debris blocking the door. The mess they had created would have to be untangled and hauled up the basement stairs to the dumpster outside.

Teaching moment! I pointed out that if they had taken the doors off the hinges and cut the opening out first in a organized way, not only would they have more room to move the rest of the debris from the other walls in the room, they would have gained some light.

Also, if one did the demolition while the other one hauled away the debris, this would result in a cleaner job site and reduce the risk of injury.



I also reminded them this was the first hour of a very long day. They needed to pace themselves. I suggested they take turns carrying the removed material upstairs and pointed to the two large plastic garbage cans that I supplied for this purpose. If they filled these up and helped each other carry them out, this would result in fewer trips and a job more quickly completed.

I also suggested they take the two buy two and two by four studs, lay those on a tarp and when they had several placed on the tarp simply each take an end carrying the tarp up rather than only two at a time.

Normally, I like to handle something only once. For instance, if I am removing demolition debris, I like to be able to throw it directly into a dumpster and be done with it. It makes no sense to me to move it to a pile outside then have to move it from the pile into the container. From my perspective, this seems like twice the work.



However, I made a conscious decision not to do this for two reasons. First and foremost, I was unable to secure a dumpster with the delivery dates I wanted. Too many times I have ordered a dumpster for a job site having it delivered a day or two in advance only to arrive at the job site finding it half full of everything from sofas to old TVs and other neighborhood junk.

Lessons learned.

I now plan so I use the whole dumpster right away or as in this case pile it up, then spend the time to move the debris into the dumpster when I have enough to fill it and have the dumpster picked up right away.

Although, this requires more work, the cost of a dumpsters outweighs the expense of labor to move the material from a pile into the dumpster. I have found no shortage of either enterprising young adults or day labors willing to work for cash. At $400.00 to hire a dumpster that ends up being filled with neighborhood refuge material that often costs a lot more to dispose of because it can't be mixed with demolition material, this is the best solution. This is using resources wisely, and cost effetely.

Every part of the job needs to be done with thought. Mismanagement inefficiencies with cost overruns will kill a project as quickly as unexpected and non-budgeted surprises. Every phase of the project needs close attention and management. It's important to exploit labor strengths to their best advantage even if they it's family or friends. Use them wisely. This alone will pay significant dividends.

Before each day started, every member of my team knew what had to be done that day.
We all knew exactly what had to be completed for the project to move forward. The deadline on this project was tight because I was going out west for my annual two week hunting trip. The project had to be completed before I left. This only left thirty days. Not a lot of time for the scope of this project. Certainly, I couldn't afford to lose any time.

Another huge motivator was the fact that my agreement stated that I would carry the project until closing. Having up to thirty thousand dollars of your own money stuck in a project makes you very aware of deadlines.

This meant I had to pay for all materials and labor and complete the project before I earned a penny.

Enough said!






The scope of this project was extensive and at this point included several phases such as, the complete demolition of the exiting basement, a new electrical upgrade and service, extensive plumbing upgrades, a new remodeled upstairs bathroom, and wallpaper removal and painting of every room. Several floor covering had to be replaced. These ranged from carpet to tile. Part of this project was refinishing nearly 1200 square feet of hardwood floors.



There was substantial work that needed to be done on the outside such as the entire old fence torn out and replaced with a new six foot wood fence enclosing the yard.

Additionally, in the basement we had to frame and build a new bathroom and bedroom with an outside egress window cut in and installed. All the wiring, sheet rock, painting, duck work and floor covering also had to be done. Considering we all had full time jobs with only weekends and evenings to do the work, we had a lot of work cut out for us and very little time to complete it.

Our hands would be full for a month. Being well organized was essential in order to complete this project. Although adequate but limited, the budget was very tight, allowing for very few cost overruns and certainly no unnecessary expenditures.

Everyone had to be on the same page every day. No exceptions. This was my responsibility. I take this very seriously. However you still have to keep the working environment fun and productive. This is always a challenge.

I certainly have learned a few things along the way. The more I do the more I learn. Every job is always just a little bit different and serves, not only as a new teacher, but as an opportunity to apply what I have learned from other jobs. The short term for this is; applied and learned experience.

Priceless!

Soon things fall into place and the crew develops a rhythmic pace. That is my job to keep this pace and theme throughout the remodeling project.

Our agreement was simple for all my labor hours and those of my business partners, we would charge only what we had paid him for his electrical services he provided us on our other projects. In other words, our labor rate would be paid at the same rate he was paid.

My overall fee for finding and negotiating the price and preparing the purchase agreements along with managing and taking the lead role in construction would be a set fee of seven thousand dollars.

Compared to what my standard fee would be, this fee was reduced for several reasons.

I am a firm believer that no one in business should ever give away their services or work.

Let me explain why. In my opinion, the best way to ruin a good friendship or spoil a family relationship or cause unnecessary stress is to put yourself in a situation in which someone stands to gain on the fruits of your efforts without fair compensation. In other words had I not found the house, and prepared the purchase agreement without a commission involved plus agreed to do all the contracting work at a much reduced price, he stood to gain a significance increase of equity.

These types of one-sided arrangements tend to end badly with a lot of resentment. The fact remains he would have had to hire someone to do all the work at considerably higher prices.

This highlights why I insist on written agreements regardless be they relatives, friends or whomever. This way, there are no surprises, and everything is out in the open and up front. Both parties know what the expectations are and what the outcome will be.

One advantage with doing this is that when crunch-time comes and you are being pushed to the limit, you can simply remember you agreed to this arrangement. It is very hard when you have been putting in all you have, for nothing in return and you're being pushed by the owner of the project to finish it on time and within budget. I can't think of a better recipe for resentment than this scenario.

One of the most valuable lessons I learned in life is have to work for what you get and you get what you work for. It is entirely a different arrangement and your personal choice if at the end of a project you say "no charge" or tear the contract up and choose to give your services away. This is your own decision and choice. I have done this often but still used the written agreement to guide the process.

One other compelling reason for some charge is doing your craft or trade free is to cheapen the profession.

It also seems the more you do for friends or family the more they expect; and why shouldn't they? After all, it seems your time or trade isn't worth anything because you don't charge anything for the work you do.

Again if you choose to do it for free after you have completed the work at least you have set a base line price for your craft and trade.

If someone balks at what you would charge, that usually is the first sign of what is to come. Project costs frequently go over and beyond budgets. This fact causes more misunderstandings, hard feeling, and lawsuits than any one other single factor in a project.

Why not reduce the risk of this happening and address the problem in advance with the client and enter into a written agreement? This way, if the project turns sour, at least you have a starting point to begin to work out the problems.

There is one word for this - business. Conduct your affairs like you mean it.

After two exhausting days of steady and hard demolition work, we reached out goal.

The old basement was completely demolished and ready for the next phase of construction.






We could now assess what additional work needed to be done.

One thing became evident. We needed to replace the water heater. This came to light when it was discovered that the water heater had been leaking but this was hidden by a wall in the bathroom. In turn, over time this leak had caused a lot of the mold to form in the wall. It also became clear that we had a problem much larger than just the water heater and the potential for thousands of dollars in non-budgeted expense.

What we found was a very serious and potentially dangerous condition. The short term outlook was not good. The long term fix was being summed up in a word.

Ka-ching!

copyright all rights reserved D. Jerzak Dec 22 007
 
#124 ·
The first "surprise" arrives...Let the work began



After demolishing the basement and cleaning it out, I had a chance to assess the real condition of the plumbing, electrical, heating, and various other parts of the house.



Not good!



I confirmed pretty much what I expected and that for which I had planned, and budgeted.



This included breaking up the floor and replacing all the floor drains and pipe, the plumbing needed to be redone.



The electrical wiring was in dire shape.



The heating plant (hot water heat boiler) although less than 10 years old, was in bad shape. The boiler had been replaced however the bathroom shower stall had rotted out and had been spraying water on the side of the boiler where it also rusted out.



The old radiators were outdated, improperly installed, and had over sized pipe that was unsightly and very inefficient. Several of these old cast iron relics were rusted and full of sediment and was surely trouble waiting to happen.



You could add all of the following to the list of "needing immediate replacement".

1. The existing water heater that was full of sludge and had been leaking for a long period.
2. The newspaper that was dated in the nineteen forties that was used as insulation for the ceiling and walls.
3. The lead laundry tub.
4. The washer and dryer.
5. All of the basement plumbing fixtures in the former bathroom.
6. The well had to be abandoned.
7. All the basement windows besides being inoperable were rotted and contained only single-pane glass.
8. All fuse boxes and wiring.
9. The crawl space that lead from the basement to under the porch was not closed off from the outside elements.
10. The old heating system piping had been oversized and built in to all the former spaces. These pipes now stood out in the open and took up valuable space. Not only was this unsightly, it was impractical to build around.
11. The gas lines no longer met code, nor did anything else for that matter.
12. The floor covering was asbestos containing floor tile that had been breaking up for years.

There really wasn't anything I had not planed for from my initial assessment. You always hope you find something that didn't need replacing or was in better shape than first thought.

I can dream right?

The next step would be to break up the floor and replace the plumbing.



This would need to be done along with pouring a new floor before we could finish frameing out the new bathroom and bedroom.



There is only one way to describe what breaking up concrete and replacing the existing plumbing is like.

It sucks and is hard work.

Period!

Oh, did I mention also expensive, dirty, smelly and time consuming?

Enough said, and suffice to say not my favorite work to do. It had to be done and the sooner I got going on it, the faster it would be done.

It is funny how any talk of demolition work being fun abruptly stops when it comes to breaking up a concrete floor with a sludge hammer and bars. I have also notice how quickly laborers start bitching when tearing out old smelly rusted pipes leaking toilet sewage all over while struggling to carry them up a flight of stairs to an outside dumpster. I was that laborer.

It is part of the work in any rehabilitation project and certainly I had no budget to hire a professional plumber. You also begin to better understand why and how they charge the rates they do.

After spending a day breaking up the floor and digging out the old plumbing, it was time to start the rough-in of the new plumbing.



Not only did I have sand piled up from the sub floor under the concrete, I also had the smell and old residue from the rusted-through drain piping to deal with and replace.

I know why I never wanted to become a plumber.

One other very important consideration at that point was I had to not only replace all the existing plumbing, but also bring it up to code. There is no margin for error. I either did this or they would make me replace it.

I had to plan the work well taking into account any future improvements or additions that I might want to add. I had to do all of this without going over budget. It's at this stage where the importance of a budget and all the work that goes into preplanning becomes evident.

I learned this all the hard way. It only took one experience of having to break up a concrete floor after I had replaced the plumbing and the cement after I failed to get a rough in inspection for me to learn that lesson.

I have never forgotten that "teachable moment".

Never!



After replacing all the plumbing in the floor and while waiting for the plumbing inspector I stared my framing and insulating work. On this job, I didn't have the luxury of completing one phase, get it inspected and then proceed to the next phase.



Time was critical.

Certainly it would have been much easier not to have to frame walls around large trenches in the floor and sand piled on the existing concrete. This never mattered because I had a tight time line and couldn't afford to loose a single day.

When I make a trip to the lumber yard or big box retailer I make the most of it.

I buy and have on hand what I need, or will need in the very new future, without having items that can be lost or misplaced or not need at this phase of the project.

Planning!

Being organized is essential.

Having what is needed, when it is needed, is very important.

I take my "preplanning notes" that are complete with model numbers, stock keeping unit numbers, colors and whatever else is essential and fax this over to the store so that it can all be pulled in advance and waiting for me when I arrive.

All I have to do then is to pay for it and check that what they pulled was on my list and is undamaged.

This is a huge time saver.

I also stage these materials as close to where I will need them without causing other problems. I then make sure my crew knows where these materials are located so no time is wasted looking for them



There were only three of us on this job and with them being my helpers this was easy.

It's also important to understand the capabilities and limitations of the crew to make the most productive use of their skills. I write in much more detail about this later in another blog.

Before the installation of the insulation could proceed, framing of the new bedroom and bathroom had begun in earnest, along with the outside wall mold abatement, cleaning, and surface prep. This process is somewhat cumbersome and time consuming and had to be done with care and in order.



There are very specific and detailed methods for removal of mold from porous material such as concrete walls or block. The details and steps are too varied and complex to attempt in one paragraph.

I would suggest that anyone who undertakes this process knows what they are doing and uses the latest safety equipment and methods with qualified inspectors at their disposal to confirm the absence of mold when completed.

Removing mold from porous materials such as cement is relatively easy when the proper steps are followed.

This was day four of the project. So far, everything was on time with no real budget surprises other than the need for a new water heater. I had overlooked this in my assessment.

What makes me angry at myself was I knew better. Because the water heater was leaking, I should have planned on replacing it and budgeted accordingly. Had it turned out to be something less serious not requiring replacement, then it's a bonus.



At the same time, in order not to interfere with the framing process and hold up the project in other ways, I started cutting the block and digging the outside hole for the egress window.

I had to really watch the weather forecast so that I didn't get caught with a big hole in the side of the house during a downpour of rain.

I really had to know project instillation times, available work hours and help, when several parts of the project are going on at the same time.

One good part of this project was the fact that the homeowner was a journeyman electrician. This made it so much simpler because I never had to babysit his work. He was able and kept himself busy doing this at the same time all the framing and other work was being done.

All that was needed was coordinating so we weren't all trying to work in one area. This is one of my pet peeves; something that although at times unavoidable, is more than likely just poor planning. More often than not, when this happens it becomes a time killing and frustrating ordeal.

After the first week, all the week's goals and benchmarks for the project had been met on time and within budget.

It was time to start reviewing what had to be done the second week and to be sure the crew was on the same page.

It seemed that things had went extremely well and without a hitch.

Could this be true?

Yes it was!

The other shoe was about to fall.

And boy was it a loud thud when it hit!
 
#131 ·
Your blogs leave me in wonder Dusty (as in "I wonder what I'm doing in this business" ;-) Always informative and entertaining. And they always show your organization, passion and integrity. Thanks for taking the time to share.
 
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