Drip…Drip…Drip…
The stream of water was making its way down my back and it was cold. I was standing on a covered porch at 424 Franklin Street and still getting dripped on. This small Denver bungalow needed some tender loving care to bring it back to life. A few months and three offers later, the house was ours. So began the journey of renovating for resale.
The ultimate goals in Renovating a Historic Home for resale include making a profit and creating a beautiful and livable home.
In order to make our profit, we expanded the square footage from 2600 (including the basement) to 3900 finished square feet with the addition of a second story and an extended first floor. The house needed to complement the surrounding neighborhood and the construction plans required approval from the Denver Landmark Preservation District since this house was in a designated historic district. Finally, the finishes and layout needed to reflect what a million dollar buyer would expect.
What we did right:
We selected the right people for the project team. Since this was our first project of this magnitude, we built our team primarily from referrals made by friends and business partners. Our team members are responsive, professional and have keep their promises.
The neighbors were part of the team. The neighbors were kept informed of progress at every stage and have supported the project from the beginning. Buyers may be referred by neighbors. In addition, we have let them know we are looking for another home to renovate. They may lead us to our next project.
The builder and designer have completed numerous successful renovations for resale. They know what sells and have played a key role in the renovation and design selections that have resulted in a beautiful house.
The property is in the right neighborhood. We did our research before we bought. This area just north of Denver Country Club is one of active renovation and restoration. Houses are still appreciating and selling despite a tough market. Our $1.2M house is down the street from others selling for double and triple what we are asking.
We bought at the right price. We were patient and only paid $5,000 more than our initial offer. There were other offers, but we kept firm and paid the price we felt was necessary to maximize our profits.
Taxes on our profits will be limited because we have held the property long enough to qualify for lower taxes. Our original intent was to quickly complete the home and get it sold. Our accountant was adament that we hold for over a year to qualify for long term capitol gains taxes. Landmark Denver requirements and minor construction delays contributed to meeting the timeframe.
We are going to make money. How much is yet to be determined, however, it is clear that we will meet our goal on what has been our first renovation.
Lessons learned:
Keep within budget on design items. It is easy to get carried away. Our lighting and some of our other selections were well above budget. It looks incredible and was probably worth it, but we need to be more realistic about expenses. (The buyers will be thrilled.)
Our builder committed to a price that included construction and all design elements including appliances. Even the designer’s time was included in the price. We didn’t get nickled and dimed on the small stuff. While we spent more than we anticipated, it was under the 10% overage we expected. Those changes were made at our request with full knowledge, in most cases, of what the additional cost would be.
Write everything down. There was some confusion over the carpet color. We went into the house one day and the carpet company was installing a mysterious color of carpet. Mysterious, because it was a mystery on how we could have selected a carpet that contrasted in a terrible way with the rest of the colors in the house. The contact person at this unnamed company insisted that they were installing what we selected. It was an expensive mistake. It is our job to keep records.
Design your plan with the sale in mind. The house is now on the market in January. The landscaping has been started, but is not yet complete because of the weather. If we can purchase at a different time of year and/or budget in extra holding costs to permit photos and listing during prime time, we can prevent trying to sell at the coldest time of year. It is easier to establish curb appeal when plants haven’t died back and are now in stick form. And…most folks aren’t interested in moving in the middle of winter although there is definitely less competition at this time of year.
Plan for a more realistic time frame. The house is located in the Driving Park Historic District in Denver. The Denver Landmark Preservation District (See Steps for Successful Historical Renovation) is required to review and approve plans for every house with exterior changes. There are only a handful of employees and piles of renovation requests. We were expecting six to eight weeks for project approval and ended up waiting almost four months. Also, construction took longer than expected and we are about sixty days beyond our original deadline. The good new is that we will save money on taxes.
Looking for a great home in historic Denver? I have just the one.
The house will soon have new owners who will make it home with furnishings and grand memories. It’s hard not to picture myself inside, but I know the house will be well loved and is a welcome addition to a wonderful neighborhood. Maybe next time…
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Visiting older Denver neighborhoods takes you into another world. Towering trees with bark patterns that beg a touch and homes that were built when horses were the normal mode of transportation are common place. We are lucky to live among daily reminders of the amazing 
