Home & Garden

About the House: How Good a Deal is a Fixer?

By Matt Cantor
Thursday November 13, 2008 - 11:42:00 AM

It’s funny how little I know about a house prior to pulling up to the curb. Despite some lengthy conversation with my client, it really isn’t until I’ve arrived that I can actually see what I’m going to be dealing with. Had I known on this particular day what it was that I was going to see, I might have turned it down but, in retrospect, it was probably best that I didn’t know and showed up anyway. 

The agent, Jimmy, climbed out of his tony vehicle, smiled and said, “Well, I don’t know what you’re going to inspect…” Sheepishly, I smiled and proceeded to circumnavigate the property in search of just that. What I was going to inspect and bring to the table. Was I was going to make my involvement worth the fee and their time? 

This house (if you can call it that) had been so thoroughly botched that there was virtually nothing left to salvage save the framing and, blessedly, the foundation. But this alone became sufficient grist for my mill to make for a worthwhile conversation. This was precisely because it was not clear to the client that most of what had been done would have to be fully removed and replaced at unanticipated expense and by parties of a skill level beyond what I suspect she was anticipating. 

The financial conditions of recent years have forced many folks to bail out while still miles from completion on their “project—or their “flip.” Conversely, when the market is good, it’s often hard to make a project of this kind really profitable. When houses were a dime a dozen in the ‘70s, it was reasonable to turn one around and make some real money. We may see these days coming again but they’ll require that the market ultimately heal enough for new buyers to come along and snatch up the completed projects. It will require faith to venture into the market in this way, but it also requires some very practical skills in project management. 

The prospective buyer (who no longer was, it turned out) had envisioned moving into the property and finishing the work that appeared to be merely incomplete. What wasn’t obvious was that the electrical system (for one) was so badly ravaged that it was essentially a complete redo. That’s the catch, you see. With every prospective course of work, one must ask how much repair is actually worthwhile. I’ll give you an example that comes up all the time. 

Let’s say you have a room that has bunch of holes in the drywall (left over from the poor excuse for an electrician, to draw upon a recent discussion from this column). If you have, say, 10 percent of the wall torn away, it’s already becoming a question as to whether it makes sense to remove all of the drywall and start again or to try to fill and smooth over these holes. 

There are two factors in this equation. One is made up of time and materials but the other factor, equally important (if not more so) is the quality of the finished product. When you flip over to replacement of all the drywall in a given room, you change the game plan from arduously attempting to neatly work on each hole and try to smooth the finished fillers so that you won’t see the patch, to working rapidly with large sheets of fresh material (that cost almost nothing). Then you simply tape and smoothing the major seams. The latter approach is fast, comprehensive and hides most sins and other manifestations of evil and sloth. 

I will generally tweak the equation somewhat and say that more than about 20 percent of repair to drywall in a room ceases to be financial sensible and beckons a full replacement. 

This is less true in an electrical or plumbing system. But these principles are still highly relevant surfeited by more factors that flood in to replace the ones missing from a world in which one may play with mud and tape to adequate results. With electrical wiring, exactness and proper application of the principles can be a matter of life and death (not to put too fine a point on it) because fire can result from poor electrical work. With a lousy drywall installation, the worst you face is a disapproving Martha Stewart showing up unannounced (although that spell in the slammer may have softened her edge somewhat). 

With plumbing there is also not a great danger, although a flood or leak can be quite unpleasant. Nonetheless, good use of time and materials and good layout improve the quality and longevity of these systems and attempting to patch together a bunch of poorly installed plumbing may take much of the time that a complete layout from scratch requires. Here’s how this works: 

If you have a lot of fittings already in place and you’re attempting to work between them, you have fewer choices on how to run your work and, perhaps, many short sections to cut and fit exactly into place. If I know where my various fixtures are going to be and I can work from the main water supply forward to each of these and pick the points at which I branch off from scratch, my entire job may take less time than the that required to carefully perform a series of repairs. Moreover, I can make a set of decisions that I could not make in the former case. For example, I can decide to run a larger pipe for all the main trunks, reducing to smaller branches for each finished line if I’m working from scratch. I can also pre-solder whole sections outside the house and then bring them in and solder them into place in the former case. If I’m doing sectional repairs, I have fewer of these choices and have to make do with what’s already there and work mostly in situ. My main point is that all of this is slower but the other issue, that of overall control is also important. 

This is why a factory built thing (almost anything) is cheaper than a custom or site-built thing. It’s all about economies of scale. 

Back to the electrical, which was a Greek tragedy, inspiring me to want to remove my eyeballs. There was so little that wasn’t botched that it would actually be more work than starting from scratch because one would first have to remove all the little bits of what was there and then install a complete electrical system. 

To make matters worse, the remuddlers had notched the lower edges of the floor joists (the ceiling of the basement) so deeply that a set of structural repairs would be required to go along with the plumbing, wiring and other refits. 

While I won’t belabor all the other elements that reflected the sore lack of expertise demonstrated on the part of those who preceded us that day, I will say that many of the other features that would be requiring renewal/repair/replacement were not so obvious. These included windows that were marred, broken or punctured during installation and would not be good enough to deserve reinstallation. The client had assumed that these would be serviceable and it took some close pointing and discussion of the complexities of the reinstallation process for it to become clear that on the day when they were due to go back in, it would become obvious they were not going to be acceptable. 

Seeing and accounting for these many issues prior to purchase and commitment is essential to avoid heartache and financial woe. And it takes patience, self-honesty and a willingness to fold and wait for a better hand (read house) to come along. 

Lasty, a little skill with a spreadsheet can be quite a good thing. And better, a knowledge of business plans puts the buyer of the major fixer at a significant advantage since, ultimately, rehabilitation of a house is a short-term business. 

We all like bargains and every one of us would like to be the one to land that great deal that turns into a gold mine. The trick is to know when the bargain is an illusion and when it’s actually better to back away from the table, take a deep breath and wait for the deal to come back around.