Anna G. Larson, Published September 28 2013
Home rehab: Business Billy Buys Homes renovates tired properties
The couple owns Billy Buys Homes, a new real estate renovation and sales business in Fargo. The Saloneks recently completed the remodel of their home near downtown Fargo, which they plan to eventually sell.
The almost 100-year-old house had foundation issues, ceiling cracks and a tiny kitchen when Nick and Amy purchased it to “rehab” five years ago. Working nights and weekends, they expanded the kitchen, installed a new furnace, and added bedrooms, bathrooms and a garage.
Nearly $80,000 later, the extensive rehab is complete. In the living room, nail holes were plugged and the original woodwork cleaned. Ceiling fans were added throughout the house, as well as a fresh coat of paint.
The kitchen, attic loft and basement feature the most extreme changes. The kitchen was gutted and then expanded by removing a wall. New cabinets and appliances were installed to create a more modern look, Nick says.
The attic loft was also opened up by removing the chimney and raising the ceiling. The space was once a play area for children, but the Saloneks transformed it into a cozy master suite.
Nick added a bedroom, egress windows, bar area and living area in the basement, which Amy says was once “really creepy” and unfinished.
The four-bedroom three-bathroom house is the third Nick’s rehabbed. He gave two other properties a facelift while he was a construction engineering major at North Dakota State University.
It typically takes Nick one to six months to renovate a property when he works on them full time.
Years later, the rental properties are still producing income for the Saloneks. For instance, one house was purchased for $70,000 and is now worth $150,000 to $160,000. The income is part of what prompted Nick to go full time with his house rehab business. He uses the term “house rehab” intentionally, eschewing the word “flip.”
“I don’t like the word ‘flip’ because it implies spraying a bunch of paint and covering problems,” Nick said.
Challenges and unexpected problems that can’t be fixed with paint and nails are apt to pop up during a house rehab, he says.
Nick didn’t expect to encounter foundation issues or to have to dig far to find the plumbing, but he knows that’s all part of taking a risk on an imperfect abode.
The Saloneks typically purchase homes that are foreclosures, for sale by owner, short sales or within their budget and criteria. The advantage to the homeowner, Nick says, is less hassle – no Realtors, open houses, repairs or living through a remodel. They buy homes “as is.”
“Sometimes people are left houses when a family member passes away, and they aren’t necessarily marketable. Those are excellent buys,” Nick says. “We are experienced and can see around those things.”
Nick and Amy look at properties they could improve while making a profit. For instance, if they walk into a house with a tiny kitchen that can’t be rearranged or expanded, the house might not be a smart purchase since kitchens are a huge selling point.
Property investors see the best return on kitchen improvements, master bathrooms and lighting, Nick says.
The amount of money they put into a property depends on the neighborhood. The Billy Buys Homes team looks at other houses that’ve sold in the neighborhood to determine the types of improvements they make.
They aren’t renovating million-dollar properties, Amy says. They want to appeal to the typical homebuyer who wants a comfortable abode they can afford.
“You need to make it like the surroundings,” Amy says. “When you think about this house, this neighborhood and who’s going to buy it, it’s probably going to be somebody just like us – newly married or just starting a family. You might not be able to afford your dream home, so I think this is a great start.”
One of the Saloneks’ main goals is to reduce the number of neighborhood eyesores.
“When you’re improving homes, you’re improving the neighborhood. The longer houses sit empty, the more it hurts resale on existing homes,” Amy explains.
Improving houses, though, is no easy task. House-rehab challenges and triumphs are covered in a handful of television shows like A&E TV’s “Flip This House” and “Flip Men” on Spike TV. The shows, Amy says, are great for ideas, but sometimes people don’t realize how difficult house rehab can be.
“Everyone thinks they want a fixer-upper, but are they going to want to spend every weekend working on it?” she says. “People think they can flip on HGTV and then go do it themselves.”
The Saloneks are still learning how to best operate their business. They have continuous training through real estate education and coaching company Fortune Builders, and their main goal is to build a reputable business that brings out the best in homes and neighborhoods.
“It’s fun to see a house go from something no one would want to a home a family will live in and be happy,” Amy says. “This is what the average homeowner can afford.”
Readers can reach Forum reporter Anna G. Larson at (701) 241-5525