An Etude in Exhaustion and Expense

For those of you who don’t know me well, I grew up in Georgia. My father was a general contractor who specialized in cabinetry and finish carpentry, and oversaw multi-million dollar renovations of turn-of the century homes in Buckhead, Atlanta. My mom is, still to this day, a real estate agent.

Just before my Freshman year in High School, we moved to Pell City, Alabama. My mother’s father, who ran a plumbing company in Birmingham for decades, had 40 acres. We spent an entire summer making the two hour commute to build a house on a hill overlooking a beautiful farm. Not only that, but it burned. To. The. Ground. A year in. My sophomore year. We rebuilt on the same foundation. Photos below.

All of this is to say that since I was 15, I’ve been more or less apprentice to tradesmen. When I first moved to Los Angeles, I made much of my extra money in school working construction, either through craigslist handyman work or as part of a team. I even worked with a crew that renovated the Magic Castle after I graduated music school. It’s never been a career ambition of mine, but I have enjoyed and valued the experience.

Six years ago, I became a recruiter. I’m more grateful for that opportunity than any other I’ve been afforded. I work as an independent contractor, which means I get to determine with whom I work, my own values and mission, and how much effort is necessary to be successful. There is a balance of freedom and fulfillment there that I love.

Sales is also a psychologically challenging field. It can be difficult to motivate, and it happens in big cycles. There’s also an instant gratification that comes with making something. Tangible and comforting. Having also had a very active youth, I’ve been frustrated by a somewhat sedentary lifestyle that pairs well with a desk job.

After quite a few years years of what I’d consider a very successful run, I did some soul searching. In January 2016, I was 6 mos in to starting my own firm. I had a decent savings, but only a strong sense of risk aversion around where to invest.

My dad happens to be retired up in Santa Barbara these days, and we didn’t see each other nearly as much as I would have liked. It seemed like perfect timing to invest money in property, save by taking on the renovation, enjoy the nostalgia, spend some time with my dad, get some physical labor in, and face some new challenges.

And so, I set out with my business partner and Fiancee Sarah to find a property. To be clear, our interest was not a house to live in, but an income property. Something that would serve as a nest-egg. We love our rental home and landlord, and our rent is stable. From a financial perspective, the idea was to compare going rent with all incurred expenses (interest, taxes, maintenance, etc) and find something that would pay itself off over time. A bit of a retirement policy.

Because we have lived between Highland Park and Echo Park for over a decade, we felt like the East Side would be a safe bet. Sarah had a pretty good plan. 1/2BR units, preferably triplex or fourplex. Nothing too old or in need of update. Reasonably inexpensive for Los Angeles, and making a bet on an up-and coming neighborhood like USC or Boyle heights.

We spent a solid couple of months with an agent we liked with a background in doing exactly what we wanted. The biggest challenge was in neighborhood choice. Boyle Heights felt like a Gentrification frenzy that I didn’t want to be part of, and USC didn’t strike me as a place that would find its “Center” with such large thoroughfares. Plus renting to students…. Ugh. Anything north of Cypress park was priced out of our reach.

Eventually we spotted some decent options. We started putting in offers around the holidays… The toughest thing about rental properties is that you can’t actually do a walkthrough until *AFTER* your offer is accepted. That’s right. You have to agree on a starting number before they will do a walkthrough because they don’t want to disturb the tenants unless someone is serious.

After what proved to be a pretty annoying process with uncommunicative/stubborn sellers, we toured a 3br 1ba home in Lincoln heights with a duplex in the back.

It seemed to be in decent shape, and the seller’s agent gave a great pitch. She walked us through and painted a picture of how it needed an update, but how easily it could be fixed up. I recall getting excited at her suggestions. It had its baggage too. The back units were occupied by rent control tenants who were getting a great deal. They also don’t speak English. I also don’t speak Spanish. The house was built in 1901, and I would later find out there were no plans on file with the city.

Sarah was apprehensive. It broke the first rule- 1/2br only. I got excited. Aspects of the neighborhood showed signs of growth and drops in crime. There was a fancy new beer and sandwich store on Broadway a few blocks away with over 150 kinds of beer.

Sarah started working out a plan for how we could update the house by adding a bathroom and making a large master suite without a need for too much city approval. Minimal budget and 2–3 mos tops. The plan became to make the front house as nice as possible so we could still afford the mortgage assuming the rent control tenants stay indefinitely. We didn’t want to displace anyone, and the plan seemed feasible.

So we did full diligence. The seller’s agent referred us a foundation guy and the buyer’s agent referred us a general inspector. We got a report that the entire foundation on both structures needed a full retrofit for seismic activity. Basically the house needed to be strapped to the footing so it wouldn’t walk off in the next “big one”. Fine. We had a budget for that. The general inspection came back OK. Some termite damage. Some electrical updates necessary. Nothing too crazy.

Suddenly there was a sense of momentum. Other offers were being made, and we put ours in. Our terms were better, and we won out. It was a terrifying whirlwind complete with countless signatures and legal documents.

Tip of the Iceberg

I remember going over to start work on the house the first day. The plan was pretty straight-forward. Based on advice from contractor friends, We could pull basic permits to

-Add some plumbing/electric for an extra bathroom where a closet used to be
-Rip off the old un-permitted metal building that the previous owner kept his trains in.
-Remove a non-load bearing wall to make 2 small rooms into a master suite. -Rip up the wall to wall carpet.
-Scrape off the popcorn ceiling.
-Update some fixtures
-Refinish the drywall and slap some paint on it.

et voila!

Oh. Dear. God. If only I could speak to me from then. So naive. So young.

The first day I started demo. Hammer and crowbar, just stripping sheetrock from the wall I wanted to remove. I was confounded by what I saw. It was as though someone had gone dumpster diving for the 2x4s used to build the wall. It was just little 3–4' lengths of studs spliced together. In no way was it structurally sound. Oh well… At least it’s not an exterior or load bearing wall.

Long story short, we had to open up a few exterior and load-bearing walls in stripping the bathroom and a few other spots. Turns out the whole house was made of popsicle sticks. Not only that, but I was ambitious and naive enough to think I could just draw a plan in Google Sketch to give the city and idea of what I wanted to do.

A very kind city official took pity on me and explained the process. Turns out you have to have an engineer’s stamp on any structural changes. . . which is more expensive than just getting an architect who works with an engineer. So after 2 months of work on the house and betting on the city to approve my plans while I did the work they implied, I caved and sought an architect. Because I had basically created an existing plan, he gave us a discount…. Here is what became our final plan.

At this point we were fully invested. We had hauled truckloads of debris from demolition, we were approaching a deadline and re-evaluating. The following are the implications of that new plan:

-Gut 2/3s of the house from the back corner forward. Remove all drywall and support roof structure to re-frame walls and ceiling joists. Reframe 1/3 of the sub-floor.
-Full. Repipe.
-Full. Rewire. And Subpanel. Recessed lighting throughout.
-Pour new foundation for 10x10 corner of the house to support new doors/windows.
-Re-sheath and stucco 1/3 of exterior.
-Drywall entire house and paint. Brand new interior doors
-Brand new kitchen cabinets

It got expensive and fast. It basically doubled our budget. It was way more work than I could handle just my father and I. Electrical is not an amateur activity, and plumbing is too much crawling in the dirt (or mud when you screw up)

We had to hire a crew. The plan became to hire out all of the work up until drywall was finished, then do all of the finish work- Hardwood floors, trim, doors, cabinets, fixtures, tile. I spent countless hours researching and interviewing people. They’re also booked weeks if not months in advance if they’re good. Here’s a look at the house by the time we reached what I like to call “Peak-gaping hole in the ground”

From there, it was just one thing after another. The guy I hired to do my Demo/Framing/Drywall/Painting was great in the beginning. Unlicensed, but I was pulling my own permits. I had referrals for electrician/plumbing from my current landlord and they raised their bids significantly from the verbal quotes they gave early on. Having built up some trust with my original contractor, I let him convince me that he could handle all of it, and cheaper than my plumber/electrician could.

Long-story short, he bit off way more than he could chew. He failed two plumbing inspections because he was behind schedule. In all, he fell about 30 days behind. He mismanaged his money and started demanding more advances to pay his people. Things started to turn ugly. He had finished 75% his agreed upon work, and with 90% in payment advanced to him… One day he just disappeared and never came back. That was July. Oh, and the drywall guy showed up looking for money that he was never paid.

At that point, I went from part-time project manager/recruiter to full-time construction worker with Sarah and my Dad. Our original plan was to rent the house out in August, and had even paid our mortgage up-front so we wouldn’t start payments until then.

It’s now November 17th. I’m writing this today, having just received my final inspection sign-off from Los Angeles Department of Building Safety. I’d be lying if I said it wasn’t brutal, and that it didn’t humble me in a dozen different ways. I spent weeks working 12 hour days. I’ve lost count of the number of things I built, only to tear them back out and start over. The house looks amazing, thanks almost entirely to Sarah’s design eye and sensibility. My dad helped me through a brutal learning curve on a number of things. Without the help of my family and friends, I would not have survived this.

No good before/after without the actual after. Here’s a link to the rental listing for the finished product, complete with some great photos and a 3d walkthrough. I’m rather proud of it.

http://www.therentalgirl.com/agent/robyn/listing/3219

(TheRentalGirl is amazing, by the way. Robyn has been extremely helpful and taken a ton of work off my plate)

UPDATE- We rented the house out after just a week on the market. The listing is down now, but here are the after photos:

What I learned.

The following is an attempt to collate some of the lessons I learned in case you’re reading this and considering buying property, or renovating a property…. or just are curious as to how much this sucked :)

• Large purchases have a way of becoming emotional decisions. Emotional decisions are the worst kind of decision. I heard advice to not make emotional decisions a dozen times, and I still got swept up in it. This project became at least 3x the responsibility I wanted, and I’m lucky I was able to stay the course without completely folding.
• Never let a personal referral become a false sense of security. I learned this lesson way too many times on this project. Our agents referred us our foundation guy and our home inspector. They both dropped the ball in a huge way. A close, trusted friend referred me the contractor who went off the reservation and threw me off my schedule by over a month. They weren’t bad people, but I made the mistake of taking questionable advice without critically assessing it. Side-note- turns out Yelp is a great source for screening a large array of service providers, and I wish I had gone with a couple of them over friend referrals.
• Don’t double-down on your mistakes. One of my biggest mistakes of this entire project- Sarah was apprehensive about the purchase, and I hit the gas. The moment it became clear it was a mistake in some ways, I hoarded as much responsibility as I could to try to compensate, and rinsed/repeated with every subsequent mistake. It wasn’t until the final 45 days of the project that I began to acknowledge this and share responsibility. On an 8 month project. Being burned out and exhausted has a way of breaking down ego. Turns out having help and living with your mistakes is better than not having help and trying to hide them.
• Satisfied Ego isn’t actually all that satisfying. In the beginning, I had this egotistical impulse to accomplish everything and bend it to my will. Point of pride to be able to know that I did it all myself, I guess. Throughout I was faced with a lot of frustration around how gratifying it *isn’t* to delegate and manage people. I felt like it always got in the way of focusing on my own tasks because someone always needed course correction, and it was always difficult to live with their mistakes. Turns out management is a skill that you develop. Once again, being overwhelmed and completely incapable of handling all the things, I gained a palpable sense of “Who gives a damn” around the need to do it all myself…. *Especially* once it all became a translation of time to money.
• There’s nothing so mind-numbing and frustrating as burn-out. And it seems to get harder to detect the further in you go. My pattern in this project became “work 12 hours, 7 days a week until you wake up and physically can’t get out of bed”. There were days I would catch myself staring off into space and would have to take off early. That was when I would make the most blatant, frustrating, obvious mistakes.
• Always be sure to evaluate, and reevaluate what success means. Investment properties tend to be a balance sheet of “how little money can I put in to get a good return?” And while I like a bargain, I also take pride in very good work. Once we lost count of the number of times our budget expanded, my mantra eventually became “Just make sure you do it to your liking as if you were going to live there.” After a certain point, the one thing that kept me going was a focus on getting it done right.
• Never, ever, ever go with the cheapest bid. Pretty straightforward. The lesson I learned on this one is to go with someone in the middle, with whom you feel you have the best rapport during vetting. If you can source them from yelp, review them extensively. Just remember: the satisfaction that comes with the feeling of a bargain upfront will be very likely be dwarfed by the frustration that follows the shoddy work. That work will never be as good as if you just hired the right guy to begin with. Which brings me to my next point-
• General Contractor is a *hard* job, and there’s a reason they’re expensive. By the end of this project, I kind of became the de-facto General Contractor. If someone had told me the pricetag on this renovation up-front, I would have barked a laugh in their face. Knowing what I know today, I would raise the price 10% just to have someone take it off my hands and give me back my 8 mos. 2016 has been a *BLUR*. The hardest part of this is putting it all together. Maintaining a network of trustworthy, reliable sub-contractors is no small feat. What’s more is knowing the process. Our foundation guy talked us out of leveling floors (it’s slanted as hell. 2" over 12 feet) when it was a gaping hole with no drywall. Turns out we’ll now never be able to do it without cracking the perfectly finished drywall and stucco. Would have been an easy fix, and something we now have to live with. A lot of contractors will give you very bad advice, and there needs to be someone with significant experience with whom the buck stops. Someone who has a vested interest in the quality of the build. On the other hand-
• Be ready for the permitted way to be the hardest, most arduous way.
  Obviously keep it legal, and in our case we had to pull permits because we wanted to officially be a 2 bathroom instead of a 1 bathroom, but the city is a hellbeast. Especially Los Angeles. Inspectors are a crap shoot for making you do extra work. Permits are costly and a major time-suck. Basically, if it isn’t going to burn you when you go to resell, you can DIY or hire handymen for a lot of upgrades without spending time at the counter. I will also add that the city is there to protect you. I don’t think the bureaucracy is without merit. There are a few ways that the city actually saved me big time. Which brings me to my next point…
• If you do go with the city on Permits and plans, HIRE A LICENSED CONTRACTOR. This is a big one. I ride the line of amateur/professional very closely, and I’m as good a use case as there is for owner-builder permits. (The only way you can pull permits from the city is if you’re the owner or you’re a licensed contractor) I have two anecdotes for this one- When my foundation guy screwed up and failed to properly permit a footing, it cost us a lot of money to tear it out and have it properly done for inspection. All I had to do was mention the possibility of filing a complaint against his license, and he cut me a refund check same day. On the other hand, the guy who disappeared on me was unlicensed. There was very little I could do to get my money back, even if I could find him.

That’s about it. Finished. Done. Until something breaks and one of my tenants calls me in the middle of the night. :)

Right now, I’m kind of numb and exhausted. Sarah gets home tonight from a weeklong trip to the east coast, and I plan to hide with her, our two cats, and our newest addition to the family, Beatrix until December.

Beatrix! She’s probably the best thing to come out of this whole debacle. Hilarious, loving little Chihaua/Mini Pin mix that sort of happened to us.

She’s also a huge testament to how big Sarah’s heart is. One day about 2 mos back I’m working on the house and she comes in with dirt all over her face and twigs in her hair with this little lady in her arms. She was running across the freeway exit, and Sarah jumped out of the car and pulled her from the bushes.

Turns out she had a puppy inside her 10 days from due, and was absolutely traumatized. In a matter of days, Sarah managed to get her a c-section, adopt out the puppy to a proper litter (apparently singleton puppies are not a good thing) and bring out her personality from completely shut down and terrified.

UPDATE! 6mos later, our tenants are great, and things are going well. Beatrix is the best pup ever, and it’s been great to see her adjust to a normal home :)
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