Working with Your HOA…Flip or Flop

Today on “Thrifty or Glitzy”, Christina and Tarek are working on a “builder grade” stucco home in a managed neighborhood. Being a newer home, they don’t find too many surprises with the home itself but it isn’t always easy.

The house is builder grade basic, with comps at $500k and an asking price of $415k.  By the time they get the house renovated and sold, they’d be looking at a $50k profit. Sounds great but if there are any surprises, they can sink in this seemingly easy flip.  They got the house for $400k but “quick and easy” isn’t always quick and easy.  We’ll see how this one goes!

What is a “Lipstick” Renovation?

Tarek and their partner on this flip just want to do basic paint, cabinets and flooring. They simply want to replace 15 year old builder grade finishes and fixtures with current builder grade finishes and fixtures. A lot of effort but not much in the way of hard construction. No floorplan changes, no major repairs and no mechanical upgrades. When the renovation is strictly cosmetic, especially when it’s builder grade, it is often referred to as a “lipstick” renovation.

Of course we find that Christina is having none of this!  She wants to do a full gut and remodel on the home to maximize their investment.  Redo the popcorn ceiling, the master bath, the kitchen, flooring…no halfhearted attempts here!  Their partner on this one, Pete, is getting nervous as Christina runs the budget from $15K to almost $40K.

While we may not agree on the “high end” flip strategy on this one, we like the way they work. They move quick but don’t appear to overlook the details.

Should you replace the baseboards?

One of these details we refer to are the baseboards in the home. When replacing hard flooring flooring (vinyl of tile), many flippers will replace the baseboards at the same time. Baseboards are supposed to sit on top of hard flooring and if they don’t, the baseboards will appear short and stubby. So, the right way to install new hard flooring to remove the baseboards so the flooring can run underneath them instead of simply butting up to them.

This leaves you with a choice. While it isn’t the cheapest way to get the job done, it’s much quicker and easier to replace instead of clean and prep. se than reusing cleaning and reusing the old baseboards is to simply leave them in place and “butt” the new flooring up to them, The exception to this rule is in older homes where the baseboards are more substantial and too expensive to replace.

Should You Mix Flooring Types?

If you replace as much flooring as Tarek and Christina do, you have to wonder if they mix flooring types. Do you do hardwoods in the living areas and tile in the kitchen or do you do it all in one style? This is a polarizing topic and some designers will say to use dedicated flooring in each space. This helps to “define” the space in their eyes but just as many designers say to use one type of flooring so the space “flows” properly, In general, we find that it is easier, cheaper and more widely accepted to install one type of flooring for as far as the eye can see in any home.

Working with Your HOA

As this is a “managed” neighborhood, an HOA is in charge of all things outdoors. This includes everything from paint color to landscape design. The HOA’s are typically well covered contractually and you’ll seldom find ways around their many rules and regulations. But that doesn’t mean you can’t ask for a variance!

For some useful information on dealing with your HOA, follow the link below…

10 Tips for Dealing With Your Homeowners’ Association

As the flip moves to the outside, thee crew looks forward to painting the exterior of the home. Just ask the HOA for the approved colors an pick the one you hate the least. However, this particular home backs up to a busy road so they’re to change the fence in the backyard to help dull road noise. The HOA shoots this down which isn’t a surprise but could they use some sort of plant material here?  At some point, you just give up and our flipping friends find more productive battles to fight.

They finish the home and decide to list for $525k which means that all of the upgrades are a bit of a wash on this deal.  It may have helped them sell the home, but in the end, we can’t say they profited more from it.

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