Rehab #8, Wenham – More Issues

As I wrote in a previous post, the past several weeks at the Wenham project have brought nothing but bad news.  First, the roof had to be rebuilt due to insufficient framing, and then the back room due to considerable rot.  On top of all of that, I was given more bad news last week.  As my contractor was removing a portion of the first floor ceiling to add proper supporting beams, he noticed a major framing issue with the ceiling joists.  The ceiling was framed with several beams, 3 feet on center.  Again, I have no idea how this house is still standing.  If you’ve ever heard someone say “this is a Mickey Mouse job” to signify half ass work, then this house must have been the residence of Mickey Mouse.  My contractor had to call the building inspector in to assess the situation and as we guessed he wanted us to tear off the ceiling joists and rebuild.  Yes, rebuild.  At this point, the only original structure of the house is the walls and first floor.

On a positive note, the inspector was comfortable with us using footings for the back room instead of a full foundation, as he previously insisted.  However, this good news was quickly squashed when my contractor found pretty extensive rot in the garage.  He needs to reframe some of the walls and we’ll pour additional concrete around the garage to prevent further rot.

Here are some pictures of the house when I did my walkthrough over the weekend.

 

As you can see from the pictures we are starting from a clean slate.  Although unfortunate, this is a great opportunity for us to reconfigure the floor plan and really maximize the value.  Our plans are still a work in progress but we should be able to upgrade this 3 bedroom, 1 bathroom house to a 3/4 bedroom, 2 ½ bathroom house with a master suite on the first and second floor.  We are definitely going to be setting a new high for list price on this street, however the house’s proximity (it’s the first house on the street) to a more established cross street will justify the price.  In the end, this house will still be selling for less than if it was built on the cross street, so it’s a great value for homebuyer who wants to get into the area.

This is the most intense project that my partner and I have come across.  We have never encountered so many issues in one house.

We should have a final plans and estimated costs for the overruns by the end of the week.  Stay tuned…I’m expecting this number to be nauseating.

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  • Wow man that sucks.
    But on the bright side the blog posts are way more interesting than if you just got in and out and showed some pictures of it looking pretty at the end. 🙂

    So were any of these issues things you might have been able to pick up on and missed? Seems like most are ones you just could not know before opening up walls and you got a lot of bad luck on this one.

    • Thanks Shaun. I’m trying to be as open as possible.

      We budgeted to fix some rot damage in the back room, the garage and on a section of the sill but we didn’t know how bad it really was until we opened up the walls. The only access we had to look at framing was in the basement and of course the floor joists were framed properly.

  • Justin, thanks for sharing your Rehab #8 challenges, very enlightening.

    I had the same thoughts as Shaun. I guess the lesson is you can’t open all the walls before jumping in.

    On a positive note, you’re attacking the problem head on, and the result will be a beautiful, high-quality home for your customer. Now that’s good karma!

    Greg

    • Thanks Greg.

      Fortunately these issues weren’t from a lack of due diligence. However, I have thought about and will continue to think about ways to mitigate these issues from creeping up on me on future projects. I’m sure I will have a “Lessons Learned” post once this project is done.

  • Ann Bellamy

    It’s a function of your contingency budget. And sometimes even that isn’t enough. Then it’s a function of cash reserves. Not that it’s desirable to have to use these cash reserves, but at least you don’t run out of money half way through and abandon the project. That’s even worse.

    Good for you for posting this, Justin.

    • I agree Ann and thank’s for pointing that out. This is a great example of why you need to have cash reserves. If I didn’t monitor our cash flow situation so closely, this could have been much worse.

  • Paul

    I am curious to know if you had planned a total renovation new floor plan, additional baths or if you had intended to renovate and resell a 3 bed 1 bath?

    • The new floor plan is relatively in line with what we originally planned, with the exception of the added 1/2 bath and some other minor tweaks. Most of the extra work that we had to do will incorporate value-added features (i.e., cathedral ceilings on the second floor, skylights, tray ceilings on the first floor, new additions, concrete floor in basement, etc..) to really make this property stand out when we market it on the back end.