Justin Pierce is a real estate investor who regularly writes about his experiences buying, renovating and selling houses in the Washington area.

Renovating homes for a living is full of excitement and surprises and often they’re not of a pleasant nature.  I always try to expect the unexpected but sometimes it’s just amazing what pops up.

That was certainly the case when I was invited to make an offer on this little old brick rambler in Annandale that was built back in 1961. This home was just tired, exhausted from a lot of years of devoted service.  Many people would look at the home and say that it just needed updating.  Very few people realize what that really means.  The cost of a “simple” home facelift is very often underestimated.

So upon my first visit I went about my normal routine of observing and noting the condition of the home, taking inventory of what can be kept and what has to be replaced.

There was old solid hardwood flooring throughout the main level but it had not been redone in many years, if ever.  The kitchen was small, dated and really worn out.  The bathrooms were dark, dank and damp with the original tile and the fixtures were either original or replaced sort of haphazardly.  All the interior doors and trim were original and were looking very used and worn.  The basement was only partially finished and the bathroom down there needed lots of attention.

The yard needed a landscaper’s touch and a half dozen trees and bushes would have to go. The electrical and the heating and air conditioning needed some updating but all in all the house was solid and I was very excited about the project.

The home was cluttered with personal items. It wasn’t too bad overall but the then-resident, a family friend of the owners, had piled up all the items in a couple rooms and corner. At the time, I wasn’t too worried about the clutter. I had seen much worse.

With every deal you have to run through the different scenarios to determine the best strategy and to maximize profit.  I often look at a home and decide will I just flip it as is (which I’ve never done), do a basic update renovation, do interior redesign (moving interior walls), add square footage by building an addition or tearing down the home and building new.

Each option has a different expected after-repair value associated with it.  So, if I just go in and update the kitchens and baths, paint and carpet, a home might sell for $300,000. But if I tear the roof off and add a second level the home might sell for $450,000.  If the renovation adds more value to the home than it will cost to do the renovation then that option is considered viable.  In the end, you normally choose the option that maximizes profit and minimizes risk.

Originally, I had strongly considered doing an interior redesign by opening up the kitchen and moving the family and dining room.  The home’s layout was very dated and didn’t have much flow.  There was a tiny galley kitchen with a huge eat-in area connected to it at the front of the house.  On the other side of the galley kitchen was a formal dining area.  The dining area was connected to the family room.  The layout was wasteful and didn’t have much flow.

Despite my dislike of the layout, I decided to keep it and just do a basic renovation because all of the recently sold homes in the neighborhood had the same layout.  I didn’t know how much return a larger kitchen would bring in a sales price and the change would require more plans and additional county permits.

So I locked the deal down and proceeded with a basic renovation.  First thing was first, however, I had to get the home cleaned out.

When the clean out was complete I stood in the eat-in area of the kitchen looking at a fireplace that I’d had no idea was there. It had been covered with so much stuff and was in such an odd location that I’d never even seen it on my walk-through visits. Fireplaces almost always create additional costs for me. I rarely get a home that has a fireplace in good working order. This home was worse than most. The fireplace was in bad shape and in a bad location.

Discovering the fireplace just tacked at least a couple thousand dollars onto my project and brought into question the home’s floor plan once again.

I would not know what to do about this until I got the fireplace experts over there.  I like the idea of having a nice fireplace but if the cost was prohibitive then I might have to pull it out completely.  It raised a lot of questions.

I met with my fireplace contractor and the numbers were not looking good.  A new fireplace insert was expensive enough but then they would also have to rework the chimney.  Even though it was a metal chimney, not masonry, it was still going to cost around $7,000 or $8,000 to replace the entire system.  I ended my meeting with the fireplace contractor with no clear answers.

Later that day, she called me back and told me she had found a nice ventless, double-sided, fireplace.  She could get it installed for around $3,000 total.  That was great news.  I opted to have the fireplace raised several feet off the ground to make it a real focal point of the space.

Now with this nice focal point fireplace going in we couldn’t let it be hidden by the poor location.  I really needed to change the home’s layout.  My general contractor and I walked the house and came up with a design.

The plan was pretty simple.  We’d tear out the walls surrounding the galley kitchen and extend the kitchen clear to the back wall of the home, eliminating the formal dining area.  The space housing the kitchen, formal dining and family room would become one large eat-in kitchen with lots of cabinets, granite countertops, a huge center island and, of course, the new fireplace.

The old eat-in area of the kitchen would become a formal living room where unexpected guests could be ushered without seeing the rest of the home.  This new living room would be positioned on the back side of the double- sided fireplace and benefit from lots of natural sunlight from the huge bowed window.

The plan was simple but still risky because none of the other houses had kitchens this big.  However, I was sure people would be willing to pay a premium — but determining how much a premium was not so easy.  And, even if a buyer were willing to pay, would an appraiser recognize the value?

After firming up the design we determined that the layout would cost an additional $2,000 in wall framing and drywall, another $1,000 in electrical and a couple thousand dollars in additional cabinets, countertops and tile backsplash.  We also decided to keep the hardwood and run it through the kitchen.  So there was another $800 in hardwood that we needed to match and finish with the rest of the house.

The new kitchen was only going to cost around $6,000.  I was confident the kitchen would return at least an additional $10,000 so the new design was a go.  I ended up throwing a little more money into the space because the fireplace company really didn’t have a mantel or trim that I liked, so I opted to make the entire fireplace wall an accent wall.  I covered it with a real slate stone that accented the dark cabinets and stained floors and it clashed and collided with the soft light color on all the walls to create some real interest.

It’s hard to imagine that an entire fireplace could be missed during multiple walk-through inspections.  But as far as renovation surprises go this one ended up being  one on the more pleasant side of the surprise spectrum even though it did not seem that way at first.

In the end I’m very pleased with the way the space turned out.

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