Instead of Razing Old House, They Raise It

Remodeling a house is expensive and difficult at best, so when everybody from the city engineers to our in-laws said, “You must be crazy!” we guessed there would be troubles ahead. It turned out, however, that going against conventional wisdom yielded us a terrific house, increased our income, and enabled us to remodel for less than half the going cost.

When my wife inherited a charming house in fashionable Brentwood, we figured to turn it into an investment and income source by renting it.

Realtors quickly put the kibosh on our dreams of easy money when they explained that the original 1946 floor plan, several poorly done alterations, and the trashing of the interior by in-laws during the probate had left the house worth no more than a cheap apartment on a street where even average homes lease at very dear prices.

Our income wouldn’t even cover taxes and payments, and we were assured of having plenty of maintenance expense since virtually everything from the doors and windows to the plumbing and wiring was falling to pieces.

We priced out redecorating at current rates and, largely due to the fact that the kitchen was entirely missing and the house, outbuildings and yard would all have to be gutted, came up with a price well over $100,000. This would still leave us with a tiny two-bedroom home with a lousy layout. Even fixed up, the house couldn’t possibly pay for itself! We resigned ourselves to selling in a buyer’s market.

Then one day, as I scratched and coughed my way through the crawl space of the house inspecting the plumbing, a solution presented itself. We would lift the house into the air and build a new first floor while converting the old house into a new second floor! My experience in building told me the house above me was structurally perfect for this practice, which is common on the East Coast but unusual in California.

Faced with the alternative, my wife was eager to explore the new idea, but would it make financial sense? After all, engineers at the city Department of Building and Safety said it shouldn’t work.

Suffice it to say we doubled the house, added recreation and spare rooms in separate buildings, finished ahead of schedule, spent less than half the going rate and ended up leasing the house for 3 1/2 times our original estimates--enough to cover financing and provide extra income, too.

There were problems in the novel approach: The city building engineers did everything they could to dissuade us, although they finally passed the plans after we convinced three layers of management that we were responsible builders, not loonies from Mars.

We had to get special permission from neighbors who wondered what happens to a house that’s 12 feet in the air when a California earthquake comes. And a couple of foundation contractors took one look at the “house on stilts” and refused to even give a bid for working beneath it.

The plan finally succeeded because we went with what worked. I gave up other work for most of a year to be a full-time builder. Admittedly it was an option few people can afford, but we calculated that by working the inevitable 14-hour days plus weekends and holidays that we would get more than any affordable contractor could provide.

Our past experience as owner-builders had taught us that someone must be a full-time supervisor anyway, and better still, that person should be a productive, skilled worker. By being our own on-site contractor we saved 20% up front, plus another $2,000 a week in skilled labor.

After being an owner-builder on our previous, more conventional remodel, I obtained a general contractor’s license. This entitled us to price discounts at retail stores and access to wholesale supply houses.

Frankly, the courses I took to pass the license test taught us many lessons that might otherwise have been learned through the school of hard knocks. The fact that the course convinced me never to hire anyone without carrying workman’s compensation insurance may have saved our project--a day laborer injured himself falling from a ladder and the insurance covered more than $60,000 in medical and legal bills.

I have since used the license to make extra money when my other jobs as property manager and writer are slack.

Doing an “owner-builder” project carries with it both advantages and difficulties. Hiring an experienced plumber as my assistant enabled me to do the piping properly, but at much lower cost than farming the entire job to a contractor. The same held true with the electricians, carpenters and tile layers.

Because they were my employees, the per-hour cost was very much lower, and firing “the wrong man,” though still traumatic, was much less trouble. They could charge less because I took the contractor’s expenses off their shoulders: namely, obtaining permits, paying worker’s comp insurance and taking responsibility for inspections.

I also acted as their assistant, but only when needed, provided a day laborer for chores such as cleanup, trenching and cement mixing, made emergency runs to the supply stores, and did other sundry tasks.

Meanwhile, I was literally a slave to the job site because I was inextricably involved in every trade--I came early to get ready for the first workers, and stayed whenever someone wanted or needed to work late, as was usually the case.

This process can backfire if you don’t know how to supervise groups of workers, can’t make difficult decisions or just don’t know what you want. With confidence in your management skills, however, it is possible to translate what would have been a contractor’s profits into price savings on your project.

Undoubtedly the biggest advantage for us was the ability to provide instant on-the-spot decisions for both technical and design problems, so we never paid anyone $60 an hour to be “waiting for the homeowner or the contractor to decide.”

We calculate that we saved at least $70,000 by raising the house instead of going the usual route of lopping off the roof, reinforcing the foundation, beefing up the walls and adding on top, but only because the details were in our favor. The house movers charged $13,000 to raise the house, which is about what it would have cost to re-engineer and modify the existing foundations.

The World War II floor plan, which was anathema to a modern lifestyle, makes a perfect second floor with three bedrooms, three baths and a laundry. The old living room is a magnificent master bedroom, while the kitchen space became a master bath, closets and dressing area. We preserved nearly a thousand feet of existing oak flooring, and the entire level has lath and plaster, nice woodwork and tastefully tiled baths.

The house had a new wood shake roof put on just before Los Angeles County outlawed them, and that now rare feature was saved as well. Downstairs, we installed a new two-car garage and a thoroughly modern floor plan, including a completely new kitchen, nine-foot ceilings and plenty of French doors and windows to tie into the original house design.

We lucked into 3,000 feet of top quality quarry tile at 25% of market value from a failing import business. It covered the patio, separate rec and spare rooms and the entire first floor except the living room.

The oak plank living room floor came from a couple who had installed it, then changed their minds and sold it to us for 50 cents a square foot.

Plumbing and lighting fixtures were bought at manufacturer’s and retail close outs at bargain prices. Doors and windows to match existing ones as well as new kitchen appliances came from a mansion nearby whose designer had a change of heart and taste and gave away her unwanted but as-new leftovers.

In all, we added 1,600 square feet to the house, remodeled 1,400 square feet, converted two detached garages into a 400-square-foot rec room and 600-square-foot spare room, plus landscaped a 10,000-square-foot lot for about $170,000. That’s under $50 per square foot of house, which is half the average in the city and one-third to one-fourth the current price in that neighborhood.

It turns out that we were crazy like a fox on this project. That’s no guarantee for next time, naturally, but we certainly learned to be flexible and understand that remodeling success for us has come from a peculiar mix of following conventional wisdom and bucking it at the same time.