Is now the good time for remodelling?

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[quote author="IrvineRenter" date=1242794727][quote author="High Gravity" date=1242793055][quote author="IrvineRenter" date=1242792353]



(3) Forget the investment nonsense. Home improvements do not pay for themselves. You will not recoup your improvement costs, probably ever. If the value of your house increases at some point, it was not due to the improvements.



</blockquote>
I've been interviewing landscape contractors recently and they all seem pretty hungry right now. Every single one of them tells me to think of landscaping as an investment and how it will pay for itself and more by increasing the value of my home when I sell. I just smile and nod. I will do the landscaping, but it will be to enjoy my backyard, not to make a profit.</blockquote>


Landscaping is the worst possible home improvement from a financial return standpoint. In fact, it is so bad have you noticed that builders do not finish the back yards? They don't because they know there is no way to make money at it.



Kitchen and bathroom improvements add about $0.70 for each $1.00 spent, and landscape improvements add about $0.35 to $0.50 depending on the improvement. Pools are toward the bottom of that range rather than the top.



Personally, I will almost certainly over-improve my landscaping because I like nice landscaping. It certainly won't be because I believe it adds any value.</blockquote>


Well, landscaping adds an benefit that's not easily quantifiable. An REO with a well landscaped front yard will sell faster than a comparable REO with a bare front yard.
 
[quote author="tkaratz" date=1242790431]



I think your direct answer to my actual question explains your inability to effectively rehab your "subcompact" property today. You have no idea about the cost of materials and labor.



Who cares? Well, why are the majority of regulars on this site waiting for home prices to drop. Most of them tout an income that would easily allow them to afford to buy now and tout that they have the money. Who cares? People who don't want to overpay for a large capital expenditure.</blockquote>


Last time I was in a Home Depot was six months ago. Unless prices of materials have colapsed since then, my answer is NO.



I understand day laborers want $15-20 an hour these days. When I hired work done, I paid a guy $10, so my answer is NO.



You'd think the excess labor and excess materials around would soften prices up. In my opinion it hasn't.
 
Day laborers have gotten cheaper, but I wouldn't use them for remodel work. HD is getting cheaper. If a weekend goes by that I"m not in there, it's because we're out of town. There are lots of things that they lower and promote as "new lower price." Not anything dramatic. The cheap interior doors have gotten a lot cheaper and I noticed last weekend that their 5 gallon iceburg roses that used to be $17.50 are now a new lower price of $12.50. Graph has posted quite a bit lately about contractors having material that they are willing to let go for less than they paid.



Several materials that have gone done in price quite a bit since the bust include concrete and copper.



My neighbor is a contractor and most of his business is from remodels on higher end homes. He has been much busier and says it's because people are remodeling and staying put, rather than selling and moving further up



I don't think it's a huge reduction in costs, but it is less today than it was 3 years ago.



And, the OP bought his house 25 years ago and re-fied to a lower rate a few years later. All you renters would kill to have his housing cost for the mortgage and taxes. It may be very well time for him to do some maintenance and improvement and if he does that with a second, his total housing cost will still be far less than what all these IAC renters are bragging about.



He doesn't want to sell is stocks because he thinks there is a good possibility that they are at bottom and over the next 24 months their return may be quite a bit higher than the interest rate he would pay on a second.



One thing he may want to look at is a cash out refi for a really short term? Still, a second at 8% with potential tax deduction that they would aggressively pay down once they finish paying the kids loans might not be the end of the world as they know it.



The wife now enjoys cooking. Any of you who do as well know how nice it is do so in a nice kitchen. They will not get their money back if they decide to sell in 5 years, but for once they will have done something nice for themselves... new floors and new kitchen... oooh big splurge after 25 years of saving, doing for the kids, and being frugal.
 
[quote author="C Delroy Spuckler" date=1242779742]



I was asking a legitimate question in this thread, and you provided speculation to my situation (most likely based on your unhappiness with your own life, and need to put others down). </blockquote>


You couldn?t be farther from the truth. My first job out of college almost 20 years ago was foreclosing on farms and ranches. Years later after grad school I did a workouts. Without fail, all of the deals that came apart went bad because people who asked my honest opinion decided that the path they were walking ?just felt right? even though all the data said it wasn?t. Watching people go broke sucks.



You asked a question, gave some information, and I gave you my opinion. It?s a free world pal. Do what you want with your money. If you have a lot of it to burn it won?t matter. I?m speculating because you came here and asked you didn?t have a lot of money to burn. I?m also speculating you wanted me to give you an honest opinion, so don?t get mad because I?m being real.



[quote author="stepping_up" date=1242811743]Day laborers have gotten cheaper, but I wouldn't use them for remodel work.</blockquote>


Sometimes you need an extra hand. I did a lot of it myself. I never hired a day laborer, but I hired a lot of labor ?on the side? from folks I met along the way.



<blockquote>HD is getting cheaper. If a weekend goes by that I"m not in there, it's because we're out of town. There are lots of things that they lower and promote as "new lower price." Not anything dramatic. The cheap interior doors have gotten a lot cheaper and I noticed last weekend that their 5 gallon iceburg roses that used to be $17.50 are now a new lower price of $12.50. Graph has posted quite a bit lately about contractors having material that they are willing to let go for less than they paid.



Several materials that have gone done in price quite a bit since the bust include concrete and copper.



My neighbor is a contractor and most of his business is from remodels on higher end homes. He has been much busier and says it's because people are remodeling and staying put, rather than selling and moving further up



I don't think it's a huge reduction in costs, but it is less today than it was 3 years ago. </blockquote>


I think that's a resounding ?it?s more reasonable, but not a bottom. ?



<blockquote>And, the OP bought his house 25 years ago and re-fied to a lower rate a few years later. All you renters would kill to have his housing cost for the mortgage and taxes. </blockquote>


If OP has been this frugal and prudent for 25 years, what's the rush to do a remodel all of a sudden he can't put his household balance sheet back together first? You may have noticed, I'm patently against borrowing against depreciating assets unless you have a really really good reason, which I haven't seen OP articulate.



<blockquote>It may be very well time for him to do some maintenance and improvement and if he does that with a second, his total housing cost will still be far less than what all these IAC renters are bragging about. </blockquote>


I asked twice, now a third time. What is the scope of this remodel (op covered some of it) and it's estimated cost (didn't cover that) $500? $5000? $50000? A roof? A spa and a new front lawn? It matters!



<blockquote>He doesn't want to sell is stocks because he thinks there is a good possibility that they are at bottom and over the next 24 months their return may be quite a bit higher than the interest rate he would pay on a second. </blockquote>


I think that's a reasonable position. He already got stuck 40% or so, no sense dumping them now.



<blockquote>One thing he may want to look at is a cash out refi for a really short term? Still, a second at 8% with potential tax deduction that they would aggressively pay down once they finish paying the kids loans might not be the end of the world as they know it. </blockquote>


I bet it'd be easier and cheaper to take out a new first. He probably should do the calcs and look at it both ways.



<blockquote>The wife now enjoys cooking. Any of you who do as well know how nice it is do so in a nice kitchen. They will not get their money back if they decide to sell in 5 years, but for once they will have done something nice for themselves... new floors and new kitchen... oooh big splurge after 25 years of saving, doing for the kids, and being frugal. </blockquote>


The greatest gift I gave my wife?s kitchen habit was rent this place with a 1950?s era gas stove. It isn?t UL approved which means you can make enough heat. Tough on new stuff.



OP can't give us any details, but you have a bunch. Are we having a communication issue here, or is your ESP on today?
 
Dude, take a chill pill and while you're at it read the guys posts. He didn't tell you costs, but he did say they would like to do something about the 25 year old linoleum, maybe some new carpet and do something with the kitchen.I don't have ESP, but I did read his posts. No_Vas, I love you and all, but man you were especially hard on this guy and I don't understand why. I didn't get anything from him that indicated over leveraged. I asked to begin with what's your LTV because if the guy is leveraged heavily, yeah, don't do it. His responses seem to indicate this is not an extremely wealthy man, but has done OK, lived simply and has not leveraged himself outside of his mortgage that he took on some 20 something years ago.



And if OP is Panda in disguise and I'm sticking up for him, then that's it, Panda can take a long walk off his short Irvine bridge!
 
[quote author="no_vaseline" date=1242809565][quote author="tkaratz" date=1242790431]



I think your direct answer to my actual question explains your inability to effectively rehab your "subcompact" property today. You have no idea about the cost of materials and labor.



Who cares? Well, why are the majority of regulars on this site waiting for home prices to drop. Most of them tout an income that would easily allow them to afford to buy now and tout that they have the money. Who cares? People who don't want to overpay for a large capital expenditure.</blockquote>


Last time I was in a Home Depot was six months ago. Unless prices of materials have colapsed since then, my answer is NO.



I understand day laborers want $15-20 an hour these days. When I hired work done, I paid a guy $10, so my answer is NO.



You'd think the excess labor and excess materials around would soften prices up. In my opinion it hasn't.</blockquote>


Thanks for that expert opinion, but next time i'll consult the weekly HD mailer in the LA Times. At least they might have coupons.



Dude, if cost for labor and materials isn't your expertise than just stay quiet. I don't want an opinion from someone uses a visit to home depot six months ago as their construction index.
 
[quote author="stepping_up" date=1242819756]Dude, take a chill pill and while you're at it read the guys posts. He didn't tell you costs, but he did say they would like to do something about the 25 year old linoleum, maybe some new carpet and do something with the kitchen.</blockquote>


And that could be $5000, or it could be $100K. It kinda matters. If it?s five grand I don?t care.



<blockquote>I don't have ESP, but I did read his posts. No_Vas, I love you and all, but man you were especially hard on this guy and I don't understand why.</blockquote>


Because the forum rules allow asking questions and I think the guy is making a mistake? I'm sure he's furious with me. If that drives him to seek profesional help (like a fee only planner) then wonderful.



I have enough to do with my own business right now and my 'consulting project' up North.



<blockquote>I didn't get anything from him that indicated over leveraged. </blockquote>


I love you to girlfriend, but we?re reading different things different.



[quote author="C Delroy Spuckler" date=1242728509]We're a <u><em><strong>bit tight on cash</strong></em></u>, so we were thinking a HELOC might be worth considering right now... we're still just tossing around ideas, curious if anyone else is thinking the same right now and if they have any ideas.</blockquote>


Tight on cash??



[quote author="C Delroy Spuckler" date=1242736702]



Here's the deal, this is a temporary situation. The young'uns just graduated college. My wife and I decided as a gift to them we would pay off their student loans, so that they can start their life debt free and worry about getting a good job and being established professionally.



For the next few years, we're going to work on <u><em><strong>paying off their loans</strong></em></u>. We had alot of money in stocks and don't feel comfortable right now pulling eveyrthing out to pay for their loans...<u><strong><em> we felt it was best to pick a short term timeframe (3 years) to average out of the market and pay their loans off.

This is why we are tight (that and my wife?s shopping habits ).</em></strong></u>

</blockquote>


took on a bunch of debt??.. planning on using the stock portfolio to pay off the debt???praying for a return in 3 years to pay off those loans??.wife overspends??.



<blockquote> Likewise, my daughter went into a specialty where it made more sense for her to go to a private school <u><em><strong>(USC). </strong></em></u>The loan was to cover the difference in tuition. </blockquote>


It costs $200K to send your kid to USC for four years! I know what it costs to send somebody to state school ? I paid for my wife?s engineering degree ASSuming he set aside $100K this is a chunk of change. He didn?t say how much it is but one can assume it?s big because??.



<blockquote> We felt we can cover these loans in roughly 3 years, but that it would require some belt tightening for us short term, and that my wife would go back to work until we pay the loans off.</blockquote>


If the wife had to go back to work for 3 years to pay off the kids loans they assumed (took on, accepted responsibility for, whatever) this is no small token amount. That leverage counts.



<blockquote>I asked to begin with what's your LTV because if the guy is leveraged heavily, yeah, don't do it. His responses seem to indicate this is not an extremely wealthy man, but has done OK, lived simply and has not leveraged himself outside of his mortgage that he took on some 20 something years ago.



And if OP is Panda in disguise and I'm sticking up for him, then that's it, Panda can take a long walk off his short Irvine bridge! </blockquote>


This isn?t Panda. His UBB skilz would give him away. OP isn't overleveraged in his house. Given info he posted, it appears he is overleveraged in his life. Obviously I can't tell without digging into his financials. He needs professional help from a fee only Financial Planner.



[quote author="tkaratz" date=1242821469]



Dude, if cost for labor and materials isn't your expertise than just stay quiet. I don't want an opinion from someone uses a visit to home depot six months ago as their construction index.</blockquote>


What the hell? Do you want me to go milk on you?
 
<a href="http://www.turnerconstruction.com/corporate/content.asp?d=20">http://www.turnerconstruction.com/corporate/content.asp?d=20</a>



<img src="http://www.turnerconstruction.com/Uploads/Images/1stQtr2009.jpg" alt="" />



The really juicy stuff is here, but you have to pay for it:



<a href="http://enr.construction.com/economics/default.asp">http://enr.construction.com/economics/default.asp</a>



Some of it is free:



<a href="http://enr.construction.com/economics/materials_trends/default.asp">http://enr.construction.com/economics/materials_trends/default.asp</a>



<a href="http://enr.construction.com/economics/current_costs/default.asp">http://enr.construction.com/economics/current_costs/default.asp</a>



I didn't do a lot of research, but I still stand by what I wrote earlier. NO.
 
Delroy,



Now that you have shared with us more about your family and your intention of the remodeling. Kitchen is by far the one that come closest to your construction investment. The emotional aspect and the friendship you have in the neighborhood are priceless and no $$$ can replace that. Others have adviced you the % return but that is irrelevant for this point of your life. You are not the 20s or 30s something where you still have time to do it all over again later.



Your 25-30 years old home is still in good shape exterior wise. It needs a serious interior cosmetic makeover. Stay away from structural modifications, keep exterior skin intact, and deal just with finishes. You will need a kitchen planner consultant and Home Depot can do it for free because they want to sell you their products.
 
If you are a Costco member, check out the Costco remodel prices. Sister was in construction, and remodeled her kitchen a few years ago. Even with her contacts, they couldn't match the Costco materials prices - the Costco retail prices for the countertop was less than her contact could buy it for wholesale.
 
If you must HELOC then ONLY do what is ABSOLUTELY NECESSARY. I would say dont do it but if you must you must.



Tailor your wants to what is on sale. Only buy the stuff on sale. And I mean HEAVILY marked down, like everything must go on sale. Do everything that you can yourself. Tile the house yourself. It's not rocket science. I know youre thinking "but tile cutters are mean and scary, and loud." All you need is a ruler, tile cutter, pencil, water, and will and ALL NECESSARY SAFETY EQUIPMENT. Goggles, gloves, etc. Tile cutters use water so there is little dust and its just time consuming. Hire some "specialized" people to help you out and monitor them ALL THE TIME. A tile cutter is cheap, tiles are cheap, grout is grout, linoleum stinks, and HELOC is for emergencies only.



Even if youre not a DIYer then get pro help but dont go overboard. Hidden costs add up FAST.
 
[quote author="no_vaseline" date=1242824379][quote author="stepping_up" date=1242819756]Dude, take a chill pill and while you're at it read the guys posts. He didn't tell you costs, but he did say they would like to do something about the 25 year old linoleum, maybe some new carpet and do something with the kitchen.</blockquote>


And that could be $5000, or it could be $100K. It kinda matters. If it?s five grand I don?t care.



<blockquote>I don't have ESP, but I did read his posts. No_Vas, I love you and all, but man you were especially hard on this guy and I don't understand why.</blockquote>


Because the forum rules allow asking questions and I think the guy is making a mistake? I'm sure he's furious with me. If that drives him to seek profesional help (like a fee only planner) then wonderful.



I have enough to do with my own business right now and my 'consulting project' up North.



<blockquote>I didn't get anything from him that indicated over leveraged. </blockquote>


I love you to girlfriend, but we?re reading different things different.



[quote author="C Delroy Spuckler" date=1242728509]We're a <u><em><strong>bit tight on cash</strong></em></u>, so we were thinking a HELOC might be worth considering right now... we're still just tossing around ideas, curious if anyone else is thinking the same right now and if they have any ideas.</blockquote>


Tight on cash??



[quote author="C Delroy Spuckler" date=1242736702]



Here's the deal, this is a temporary situation. The young'uns just graduated college. My wife and I decided as a gift to them we would pay off their student loans, so that they can start their life debt free and worry about getting a good job and being established professionally.



For the next few years, we're going to work on <u><em><strong>paying off their loans</strong></em></u>. We had alot of money in stocks and don't feel comfortable right now pulling eveyrthing out to pay for their loans...<u><strong><em> we felt it was best to pick a short term timeframe (3 years) to average out of the market and pay their loans off.

This is why we are tight (that and my wife?s shopping habits ).</em></strong></u>

</blockquote>


took on a bunch of debt??.. planning on using the stock portfolio to pay off the debt???praying for a return in 3 years to pay off those loans??.wife overspends??.



<blockquote> Likewise, my daughter went into a specialty where it made more sense for her to go to a private school <u><em><strong>(USC). </strong></em></u>The loan was to cover the difference in tuition. </blockquote>


It costs $200K to send your kid to USC for four years! I know what it costs to send somebody to state school ? I paid for my wife?s engineering degree ASSuming he set aside $100K this is a chunk of change. He didn?t say how much it is but one can assume it?s big because??.



<blockquote> We felt we can cover these loans in roughly 3 years, but that it would require some belt tightening for us short term, and that my wife would go back to work until we pay the loans off.</blockquote>


If the wife had to go back to work for 3 years to pay off the kids loans they assumed (took on, accepted responsibility for, whatever) this is no small token amount. That leverage counts.



<blockquote>I asked to begin with what's your LTV because if the guy is leveraged heavily, yeah, don't do it. His responses seem to indicate this is not an extremely wealthy man, but has done OK, lived simply and has not leveraged himself outside of his mortgage that he took on some 20 something years ago.



And if OP is Panda in disguise and I'm sticking up for him, then that's it, Panda can take a long walk off his short Irvine bridge! </blockquote>


This isn?t Panda. His UBB skilz would give him away. OP isn't overleveraged in his house. Given info he posted, it appears he is overleveraged in his life. Obviously I can't tell without digging into his financials. He needs professional help from a fee only Financial Planner.



[quote author="tkaratz" date=1242821469]



Dude, if cost for labor and materials isn't your expertise than just stay quiet. I don't want an opinion from someone uses a visit to home depot six months ago as their construction index.</blockquote>


What the hell? Do you want me to go milk on you?</blockquote>


This is the one that I really meant to give you the thanks for. You are right that we are reading the situation differently. I figured that since he wasn't a rich and well connected guy that the daughter got into to USC on her own merits and thus probably had some scholarships. I really didn't get the impression that they were overleveraged.



Thank you for taking the time to respond and to do so without venom.
 
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