At first, Jennifer and Michael Stillabower didn’t plan on renovating their vacation home in South Bethany Beach. But while they were interviewing builders to do a teardown of the dwelling and build a new one to replace it, one of the contractors looked at the new architectural plans and broke the news that it wasn’t going to happen—there was no way the planned dream house would legally fit the existing lot. Their architect had made a fatal miscalculation.
“Our kids kept saying they liked the layout of the existing house,” Jennifer says, “so we decided to renovate instead.”
That meant that she spent the better part of a year driving back and forth from their home in Wilmington or else camping out as the house was being redone around her to make sure the subcontractors actually worked when they were on the job.
But the Stillabowers weren’t done home remodeling. A couple of years ago, they were planning to sell their home in Wilmington’s Westover Hills neighborhood and rebuild elsewhere, but their real estate agent had them first do a stucco check for water damage. The results weren’t pretty. “She told me potential buyers would come down the drive, see the stucco, turn around in the circle and leave,” Jennifer says over a cup of coffee in her newly remodeled living room.
Today, the stucco is replaced with wood siding, and a previously unknown water problem at the front entrance that threatened to literally bring down the house has been repaired. The roof and “half the windows” are also new. Plus, since they were having work done outside, they decided to do some major reno inside, including adding hardwood floors, replacing an upstairs fireplace and lowering the ceiling in the family room.
“They were supposed to finish everything when I took a trip to Florida,” she says. “February a year later, we’re just getting ready to do the punch list.” Jennifer looks around. “I’m still thinking about having the kitchen redone,” she muses. “There are some things I don’t like about the original.”
Each year, thousands of Delawareans decide that now is the time to do a little home improvement. Some may just want to simply finish that basement that came with the new house—and perhaps add a deck while they’re at it. Or maybe a couple are nearing retirement and want to put in an elevator to the second floor or, alternately, move the master bedroom to ground level. Others might, before putting the house on the market, first want to install modern fixtures in the bath and granite countertops in the kitchen, the same improvements that people who “flip” houses always have at the top of their lists. And many, like the Stillabowers, might finally come to grips with the fact that the the stucco siding craze, which in the late 20th century was toute la rage with developers, has literally come home to roost in an epidemic of water-damaged residences, theirs included.
Spoiler alert: Almost no major home improvement is finished on time, on budget or even completed without major changes in, or additions to, the original master plan. While renovation doesn’t generally end up as badly as it does for Tom Hanks and Shelley Long in the 1986 comedy “The Money Pit,” the road to renovation is not always a pleasant journey.
“Unfortunately, the percentage of bad stories about renovation exceeds the percentage of good stories,” says Mike Ferris, who founded the Delaware Real Estate Investors Association (DelREIA) in 2010, the members of which include those who flip houses or are property investors. Not all the bad stories are about bad contractors—they also often happen with DIY projects, he says. “A talented self-taught carpenter is not necessarily a good businessman.”
Like the Stillabowers, Helena Otsa and husband John Lowman have gone through two successful major renovations—but not without a few cuts and bruises. With a growing family of two girls, in 1980 they decided to move from their small starter home in North Wilmington to a one-level modern country home in Hockessin. “Structurally, the house was fantastic, but it had been neglected,” Lowman says, “so we spent $80,000 in improvements before we moved in.”
Ten years later, changing family dynamics led Lowman to retain an architect to plan a major addition to the house so that his mother and a brother could come live with them. It added up to a 1,400-square-foot addition, he says, with two bedrooms, a bath, a living room and a hallway connecting it to the kitchen, which was also updated. “Altogether it cost about $250,000,” he says. Although they used a contractor, Lowman says they kept the architect as construction liaison, as both he and his wife had jobs that often called for travel while a live-in nanny and his mother took care of the girls.
“Surprisingly, we brought it in on budget,” Lowman says, “but it took longer than we planned. We had thought six to eight months, but it took a year.” The improvements were cash neutral when they sold the house in 2012, he says, “but the only reason we were able to sell it as quickly as we did was because there happened to be another family who desperately needed an in-law suite.” The sprawling house sold in five weeks.
Local restauranteur RESTAURATEUR MARC ASHBY RENOVATED AN AGING HOME IN LANDENBERG, PENNSYLVANIA.//courtesy of Marc Ashby
The couple were edging toward retirement but rented for a few years while they took their time finding the right place—a smaller house in Fairfax near the DuPont Country Club golf course. “It was built in the 1950s and is under 2,000 square feet,” Lowman says, “all on one level, a home where we can age in place. We can walk to restaurants, the pharmacy, everything is nearby. If this had been our first house, we would have left it the way it was.” Instead, they spent about $100,000 in changes before they moved in—a new furnace, new appliances, hardwood floors, new windows, some painting—while anticipating that other changes would be made once they had lived there for a few months.
This time, Otsa, who is now retired from the pharmaceuticals business, took the lead in the makeover, hiring an interior designer to help plan and then oversee the renovation. In addition to more painting of walls and other cosmetic touches, the couple completely redid the master bath—“stripping the walls down to the studs”—and put in a new deck. Unlike the Stillabowers, they fortunately didn’t come across any hidden surprises in redoing either house.
But tales of “Adventures in Home Improvement” aren’t just told by struggling amateurs while professionals breeze through the process. Even people who professionally flip houses—mainly buying older homes that need a lot of TLC, giving them a bare-bones face-lift (sometimes known as “putting lipstick on a pig”) and reselling them, often to first-time buyers—are not immune from falling into the money pit. In fact, the way that TV house flippers Chip and Joanna, Tarek and Christina and the Property Brothers emerge victorious show after show isn’t the way “the reveal” generally happens in real life, say those who live the process day after day.
“I don’t see how they come in on budget on some of those shows,” says Marc Ashby, the personable and fresh-faced leader of the family of restaurateurs that owns Newark’s Deer Park Tavern and the McGlynn’s Pub restaurants. Ashby has ventured beyond the hospitality business into the world of flipping houses and buying rental properties. Last year, he even acquired an older house in Landenberg, Pennsylvania, renovated it to become his young family’s new home and recently moved in. As we chat over breakfast on his way to look over a new project, I ask him how the move into the new homestead is coming along.
“There are a few things that still need fixing,” he says. “I think the guy is coming in to finish the kitchen plumbing tomorrow. My wife is getting a little tired of washing dishes in the bathroom sink.” Nevertheless, Ashby says he isn’t tempted to grab a wrench and take command. “I try not to do anything myself because these guys are the experts,” he says. “And the contractor can buy just about everything in one shot, which is more efficient.”
Marc Ashby in the finished kitchen.//photo by leslie barbaro.
Ashby and a business partner have been flipping houses for about five years now, he says, after first taking one of Ferris’ DelREIA introductory business classes and then attending monthly meetings to discuss progress.
“Things didn’t start out too well because we violated one of the primary rules we were taught in class, which is not to try to split profits on a project with a builder,” he says. “When we did that, the builder saw that he was working week after week with no income. Halfway through, he just quit the job, and we never saw him again.” That project lost money for Ashby. The lesson learned is to contract the builder, agreeing in advance when a draw is due based on work completed and not time spent on the job.
The next two projects were one and one—one project made money, while the other lost. The loss occurred when they again trusted a different contractor, this time advancing him too much money before previous benchmarks were achieved. “We made about $30,000 on one flip but lost about $15,000 on another.” Now, he says, things seem to be trending upward with the business. “But whether it’s your own home or if you’re flipping houses, it’s difficult to find a contractor at the price you need who is reliable,” he says. “We even had one guy who dropped out even before we paid him. I guess he found more-profitable work elsewhere.”
Lowman echoes this refrain. “We had a great time with the contractor we used in Hockessin, so I went back to him when we redid the last house, even chatted with the same supervisor who oversaw the first project,” Lowman says. “He remembered it well.” The only thing was that a less-experienced guy was put in charge of the second project. “The builder has moved up in the world, very well known for his custom homes locally, so our project was small for them.” Hence the four-month delay in finishing the improvements.
Restaurateur Marc Ashby has tried his hands at home-
Ferris, who also flips houses and does renovation projects, says homeowners can learn many things from the experts. “You have to vet the contactor, not just hire who’s cheapest and who’s available,” he says. “Ask people who he’s done work for about their experiences.”
Ferris suggests a simple solution for homeowners who need a few routine home improvements and don’t want to spring for a general contractor—break the renovation down into smaller bites, do them one at a time and then look for help from the folks who sell materials or appliances.
“Instead of trying to redo the kitchen yourself, go to Home Depot and see if it’s something that they can do. Or go to a plumbing store and ask them who are the good local plumbers. Sherwin-Williams will tell you which painters come in regularly and don’t smell of alcohol.”
Finally, we come to financing the renovation, which is most likely to be a consideration if you’re trying to get a mortgage on a house that desperately needs a makeover or if you’re trying to sell your house but have allowed it to become so outdated that it qualifies as a national historical landmark.
“I always recommend working with your neighborhood bank,” Ferris says. “They know you, and it should be an easier, warmer transaction. Most people will want to go with a home equity loan,” he says, if they’ve lived in the house long enough.
If you have a large permanent life insurance policy that has gained equity, this may be another reasonable source of funds. But, before banking on it, talk with your insurer about interest rates, payback, tax implications and policy consequences in case of premature death.
For those buying houses that need immediate improvements, ask your bank about an FHA 203(k) renovation mortgage, which may be attractive as they feature low down payments and low closing costs. You can also finance a variety of home improvements and choose from short- and long-term fixed rate or adjustable rate mortgages.
Ultimately, however, home renovation generally becomes a money pit issue if the project has not been clearly defined with signed contracts or if there are relationship problems between owner and contractor.
“Probably the hardest thing I found is getting people to work, even when they’re on the job,” Jennifer Stillabower says. “When I was redoing the beach house, if I wasn’t there with them, they would come to the house late in the morning, drink coffee, smoke and tell stories. Then they would leave for lunch. And when duck hunting season came in, I might not see them for days.”
In the Stillabowers’ case, perhaps the workers should have just brought their guns with them to the site.
“We found that all sorts of animals had been making a home inside the walls—mice, birds, even rabbits,” Jenniferr says—another of those little surprises that can come with home makeovers.