The history of America is told chronologically from east to west, with new states being “born” further and further out as time went by, but that’s not the whole truth of how it played out. California was “discovered” and colonized in the 1500s, and was fought over by the Spanish, British, French, Portuguese, and even briefly by the Russians. By the time it became part of America, its inhabitance was already deeply old. This history has led to a lot of old houses all throughout the state, in various stages of disrepair. The ones that survived the “everything must go” teardown boom of the 50s and 60s are ready for a professional residential rehab expert to upgrade, fix, and flip them.
Of course, upgrading a house from the 1920s is a much different animal than upgrading one from the 1960s. There are a lot more considerations as you try to balance charm and identity with modern conveniences and expectations. It is easy to try for both and end up with neither. Use your hard money loan from Socotra to achieve the best of both worlds, and have an old house that people will want to buy tomorrow.
Know What The House Can Handle
This seems like the most obvious one, but it isn’t always. With older homes, it is important to make sure that you know what you want before you start. Older homes can potentially have different electrical systems, different capabilities, and different requirements. We know of one flipper who had a home outside of San Francisco from the 1920s, and spent months installing a new master bathroom, without realizing the pipes couldn’t even handle the water needed for the multi-head shower system and the jacuzzi.
These are problems that can be fixed with upgrades, but the trouble is that once you start a project, you have to finish it correctly. Our flipper might not have started the master bathroom renovation if he knew he was going to have to completely redo all the plumbing, but once you start tearing things up, in for a penny, in for a pound.
Improving Efficiency Is The First Step
“Here’s a plan: an old Victorian, but with a game room for a basement!” We’ve never heard that one specifically, but anyone in the industry has probably heard ideas like that: cosmetic changes to old houses that ostensibly seem to make a difference, but miss the main point. The biggest problem with too many old houses is that they aren’t energy efficient. Before you make an “Edwardian/Space Age Mashup” house, make sure you take care of the basics:
- Leaky windows.
- Uninsulated walls
- Drafty doors
- Old HVAC systems that need to be repaired or replaced.
With old homes, the starting point for energy use is so weak that lowering it by 50-75% should be your first priority.
Look At Tax Credits
While California has struggled to pass tax credits for rehabbing older homes, despite a broad coalition in favor of it, there are still Federal tax credits to be had. Indeed, it is possible to get a 20% federal tax credit for expenditures on rehabbing older and historically-recognized homes. Make sure you take advantage of every loophole, and hire a lawyer if possible, so that you can put even more money into the work. And don’t despair—the California bill comes up every year, and should eventually pass.
Decide What Makes The Older Home Worthwhile
You can gut an entire house and just use the frame to make a new pad altogether, but it is also important to see what you can save. People love older homes. There is character there, and history. Saving some of the charm is important. So take stock of what you want to keep, and plan on how to do it. Many older homes have wrought iron gates and fences, which look beautiful, but have often fallen into states of rust and other iophobic nightmares. Luckily, you can have wrought iron professionally repaired or restored to its original glory.
There are other features to consider keeping as well. Is there a narrow winding staircase in the back? You might be able to remove it and put in more cabinets, but that staircase gives character and a sense of a story. That’s important in older homes. And when you do add amenities, make sure they match the natural style of the house. You can have a modern kitchen with up-to-date appliances without turning it into a room of gleaming steel.
People will want to buy an older home if it is done right. That means handling the basics (energy, heat, light), restoring the original features that lend the house charm and interest (fences, windowpanes, certain internal construction or decor pieces), and installing modern features that add to, not detract from, the character of the house. A hard money residential rehab loan from Socotra, California’s leading equity-based lender, can help you restore an older home to new glory.
