Today I’m here to answer the burning question you’ve all been wondering… just how much did this Cottage House Flip cost?
I spoke about the purchase price, remodeling plans and estimated budget in the Cottage House Flip Kickoff post back in October, so it’s interesting to go back and see how accurate my predictions were. Turns out, there were a few unexpected surprises, both good and bad. This is my experience, and the lessons learned.
While I am so glad to have gone through this process and don’t regret it for a second, I certainly wouldn’t repeat this situation again. The situation being buying a house at a not so steep discount in a very small/buyer specific market that’s 3+ hours from home just before winter. At the time, it really was the best option for me and I was aware of the drawbacks, but decided it was worth it anyway. And it was.
But now that I’ve paid my dues, I’m going to be much pickier with what I choose to take on. This is a several month process that can easily consume your life, and you don’t want to be miserable each day or dread even having to think about it.
With that said, let’s talk about the costs involved.
The purchase price was $170k, and my estimated rehab budget, not including seller closing costs, was around $93k—and I said I’d be happy if I stayed under $100k.
Fortunately, I had a very big advantage with a storage unit full of furniture/decor from my old house, the sellers that left all of their existing furniture, and brand partnerships who provided most of the rest (which I was not expecting!)
These factors combined made my decor/staging/materials expenses almost nothing. It has been such a blessing to be in this position and I do not take for granted how insanely lucky I am.
On the other end of that, though, are crazy high labor expenses. Which brings me to a very important lesson learned: hire one contractor for everything.
I started off with a bad contractor who not only cost me a few weeks, but I had to pay another contractor to fix the damage he had caused. Make sure to have a signed contract with a clear timeline before any work begins.
To save money, I had a separate electrician, plumber/tile guy, demo team and painter lined up, which became difficult to schedule around my general contractor’s team since everything had to be done in order and communication is so hugely important. I ended up paying twice for several jobs that needed to be redone. Never again.
Apart from those rookie mistakes, there were unknown factors out of my control like dry rot in the back of the house and electric circuits that needed to be rewired. And then there were last minute decisions on things like add a concrete landing pad and wall with built in shelving under the house to create a mud room, pouring gravel along the sides and front of the house, recaulking every wall and ceiling board downstairs, and many other cosmetic extras that weren’t necessary but I wanted to go the extra mile to make things perfect. You’ve got to step up your game a little when Country Living is coming to shoot.
In the end, there were so many extra line items that were added to the original estimate that I was simply billed hourly every week and impossible to separate it out by each individual job, so unfortunately I can’t break it down as much as I’d like.
My electrician total came to $4k ($1k more than my original estimate) while interior painting was $2700—around $1k less than budgeted, but he left without finishing and I had to pay to have it completed.
My plumbing and tile installation total clocked in at $4200, but that was only for the upstairs bathroom, laundry room and half of the downstairs bathroom. The rest was part of my general contractor total and probably ended up in the same $4-$5k range.
The demo/hauling expenses weren’t quite as bad—around $500 for carpet and furniture removal and a few other miscellaneous things, but there was a good portion also built into my general contractor bill. Probably another thousand or so.
The biggest single labor expense was redoing the foundation and siding on the front of the house, which came in at around $15k. A few unexpected items were $1100 to replace damaged ceiling boards in the kitchen, $3k for the exterior deck ceiling, and $2600 to repair the back deck dry rot.
All in all, the main labor & materials cost (not including the electrician, demo, interior paint and plumbing/tile work mentioned above) came to a whopping $80k (from an original estimate of $44k, yikes!)
Fortunately, I was able to cut way back on the staging costs by using as much as I could from storage. I also picked up new items at the Restore, thrift stores, Ebay and Ikea, and those came in at under $1500. It pays to bargain hunt! And bonus, I’m taking a lot of it with me for the next house 🙂
And then there’s the operating expenses. Taxes and escrow fees came in at $2500, plus another $1900 for property insurance, $3700 in utilities and an estimated $1700 in private loan interest. Total monthly carrying costs from here on out are in the $600-$700 range.
That brings the final grand total to $102,248. Not too far from the original budget! Keep in mind, this isn’t exactly your typical flipping model with so much of the focus on custom details, higher end finishes and staging. The labor costs weren’t out of the ordinary and should be an eye opener for those looking into rehabbing an older house, or who care about the small details.
Every house is very different, and has its own set of challenges and benefits. If your main goal was to turn a profit, it wouldn’t make sense to buy a quirky 6 bedroom vacation home in a tiny village in the woods (which is why it sat on the market for a very long time before I found it—no one else would touch it).
The house is currently on the market at $325k. There have been a few interested parties but we haven’t made a deal yet. There aren’t a lot of homes in the area (nor people looking, especially at this time of year) so it’s just going to take time to find the right family who is the perfect fit.
I’d love to hang onto this home forever—have friends & family over for weekend getaways, use it as an AirBnB, pass it down through generations. That would be my dream! But I need the capital to continue to rehab (all of my money is tied up in this one).
Thankfully, even after closing costs (which is expected to be around $20k) I’ll still walk away with more than my original investment. It won’t be a home run, as expected, but the sense of accomplishment, the growth and opportunities that have come out of this are worth more.
I hope this post has been insightful for anyone else going through their own flip or rehab, considering it or just curious about the specifics behind it. There really is so much involved and it’s a lot for one person to manage at once. I’m beyond thankful for my amazingly helpful and supportive family & friends and contractors who went above and beyond. Couldn’t have done it without any of them. It truly takes a village!
As this post is published, I’ve just arrived in Florida for two weeks of weddings, bridal showers and soaking up some sun on the beach. I have a pretty big announcement when I come back. It’s going to change this blog in a major way… so you won’t want to miss it 😉
But before that—next week is Giveaway Week! I’m so excited to have some amazing shops and brands on board who were a big part of this renovation, and now you’ll have a chance to get in on some of the action. Stay tuned for Monday!