DIY Again

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Scuba_Dave

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If I had done nothing at all the roof would have collapsed
5 layers of shingles, a few broken rafters, leaks - it was only a matter of time
The house would NEVER have sold for more then $50k
Something about the gagging smell of cat urine in a house that drives buyers off. That plus lack of insulation, leaking shower area, leaking laundry, loose wires, patchwork wall coverings, 12 layers of flooring peeling & pulling up in the kitchen
Plus a lot more I could list, they were lucky to get the $23k

The majority of the money spent was on a septic system - required
The Town was actually puzzled when I went in about putting in a septic system to replace the cesspool. Since I bought the house for cash no bank was involved - which would have required a new roof & septic before closing.

In addition it was a 912 sq ft house
With the new roof & enlarged "2nd floor" (pull down stairs -so classified as an attic) the house could easily be upgraded to almost double that size. Without my adding that area the house there is now way it would have sold for as much as it did

Current house we also bought very well
With the current market drop we are still even
Once the addition/garage is finished I expect the value to jump by $100k or more (and taxes - bummer)
We have no plans on moving, we spent a lot of time looking for this house
 

Scuba_Dave

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This is a good point - he'd be able to offset the capitol gain if he paid someone else to do the work. However, there is a lifetime $500,000 exclusion on profits from sale of your home (assuming he's married and it is his primary residence).

Nope, from the IRS:

Even better, there's no limit on the number of times you can use the home-sale exemption. In most cases, you can make tax-free profits of $250,000 (or $500,000 depending on your filing status) every time you sell a home.
 

Ian Gills

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Then taxes aside (which you would need to pay on the sale of a 2nd property) why are you not fixing up investment properties for sale or rent?
 

Scuba_Dave

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I probably should
But in today's economy too risky for us
A house on our street has dropped in price from $289k to $239k & hasn't sold yet. I can do the work on our house with my son here, traveling to another site would be a problem. And the cost of daycare is astronomical around here - $70 a day = $18.2k a year is what we were quoted
If I could buy a bargain house again I would - but prices are not that low around here any more. Once my son is in school all week we'll look into other options.
I still have a lot of work to finish up, but once that is done I want a PT job. MIL is here 2 days a week & has helped out a lot with watching my son while I work on the house
 

Chris75

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Boy, I'm glad I opened my mouth. :D Funny thread BTW... My whole point was that when someone takes 10 hours to do a job in 1 hour and they still think they saved money is the funny part.
 
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TedL

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I think that some of the electrical experts should recognize their ignorance of another code...the Internal Revenue Code (IRC). Several are repeating "Code" that was changed in the 1990's. The "rollover to new home" provision alluded to was repealed back then. What came into the IRC was an exclusion for gain on the sale of a principal residence (for 2 out of past 5 years) of up to $250,000 for an individual, $500,000 for a couple. Repeatable, not just once in a lifetime. And pro-rated if you own for less than 2 years. E.g., 12 months ownership gets you half the full amounts.

That's legitimately tax free, per the code.

Please don't seek to give tax advice without a rudimentary knowledge of the relevant code, the IRC.
 

Frenchie

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Just a load of garbage from people who don't want to lose business from DIY people.

If that was even a little bit true, why the heck would I post here?

For what it's worth, about half my work is with DIYers. You need to get over your prejudices, and actually bother reading what I wrote. I've said TWICE that I am sure you saved money. Need me to say it again? I AM SURE YOU SAVED MONEY. Did you catch it this time?

Please try being a bit less defensive, okay?


The question I was asking, was simply: HOW MUCH did you save? Not counting your time exaggerates your savings. It's innacurate, and misleading.

All I'm asking, is that you not be misleading - that you be accurate in your descriptions. I am NOT saying that you should not DIY. Every situation is different, and people need accurate info to make informed decisions. The picture you painted was not accurate, and that's what I was challenging you on.


Example? I have a client, who DIY's a lot of the work on his place. He's also an attorney - there is NO WAY he's saving money by DIYing anything, when he could be making hundreds of dollars an hour on lawyer stuff.

But he enjoys it, and it's worth the "wasted" money to him: fair enough, then. But any talk about "I saved..." would clearly be false. It costs him money, no matter how you look at it. But who wants to work all the time? He enjoys it, and so it's worth it to him.

At the other end, I have another client who's a sound editor, he makes about 30/hr at his job; but the work isn't steady, so he has a lot of free time. And he used to work construction, so for things like demolition, or drywall, or painting, he can save bucketloads of cash by doing it himself. No matter how you look at it, he's saving money.

But when he starts doing finish cabinetry on his kitchen, it saves him more money to hire me: because I'm much faster than him, by a large enough margin. Also because I can teach him the tricks, rather than his having to learn the hard way & re-invent the wheel every time; which saves him time, saving him more money.

The last time I saw him, he'd just done a bunch of re-wiring, and has decided that next time he'll hire it out: an electrician will charge 3-4 times what he makes an hour, but (in his own words) "would probably be ten times as fast". So I gave him my electrician's phone number.

He's still going to do his own soundproofing work on the studio he built in his basement, though; because it's cheaper to do that himself than to hire it out.


Every situation is different, and you need accurate info to make informed decisions. Not pie-in-the-sky misrepresentation.
 

Cookie

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Maybe the attorney is up to his eyeballs in debt, but doesn't want to work at lawyering stuff for anymore hours per week and instead of going into debt any further, decides to do it himself. Then, he is saving money.

It doesn't matter how much money you make, if you don't spend any, then you saved it.

Scuba Dave stays at home taking care of his kids, and builds houses. That is his job. What on earth do you want him to subtract?

Hey Dave, if you should account for your time, then, according to the rules of accounting, you should PAY yourself. That should be ADDED on, not SUBTRACTED.
 
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Frenchie

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Hey Dave, if you should account for your time, then, according to the rules of accounting, you should PAY yourself. That should be ADDED on, not SUBTRACTED.

That works, too - but wages get substracted from profit, not added.

Either way you count it... the point is just that his time is worth something. It shouldn't just be ignored.


I am accurate in the $$ I saved
Actually given the interest that we would have paid on a loan I under estimated my savings

No, you haven't; not untill you somehow account for the time you put in.

It doesn't matter whether you do it by comparing it to "potential earnings" of those hours, or by dividing your savings by the hours you put in & calling that wages, or... some other equitable calculation. But you can't just leave it out and call that accurate. Because it's not accurate, it's incomplete & misleading.
 

Cookie

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Well, Frenchie you should pay yourself a lot less when starting out, and if you got investors even less. So, Dave, could pay himself, 1.00 a hour, then, that is what is subtracted from the profit, not what he would/could had made if he was still working as a brain surgeon.

INFACT, and a FACT, some people don't even take a salary.
 
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Frenchie

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It's complete. it's accurate

How so?

You started off saying you saved 75k, then switched to "at least 80k" - your breakdown of the contractors' bids comes to 85k. You also mentioned 40k in materials... still not sure if that was included in the 75-80k, hence needs to be substracted, or if it's completely seperate & the bids were for labor-only.

Whatever that number is, it's 4 pages later, and I still have no idea how much time you put in: might have been a thousand hours, might have been 40 thousand hours, might have been 100 thousand hours, might have been... whatever. I have no idea, because you refuse to give me a clue.

I don't even know how long you had the house, or how much time you typically spent on it, to be able to make a SWAG about it.


That's complete, and accurate? Come on. With that info, we might be talking about 35k in savings, divided by 10 years of 30-hour weeks, or we might be talking about 80k in savings over a 2 years of weekends.

That's not very accurate - it's vague as could be.


And when I asked for more info, so we could maybe get an idea - all I got back was defensive BS about how I supposedly don't want to lose business to DIYers. Or a blunt assertion, now, that it is complete & accurate.

Are you kidding me?


Well, Frenchie you should pay yourself a lot less when starting out, and if you got investors even less. So, Dave, could pay himself, 1.00 a hour, then, that is what is subtracted from the profit, not what he would/could had made if he was still working as a brain surgeon.

INFACT, and a FACT, some people don't even take a salary.

Come on, Cookie. I'm just trying to get an idea of what his returns actually are. Why are trying to twist things?

Are you just playing around, yanking my chain?

You pay yourself what you can afford. To figure that out, you need an idea of how much time you put in, versus how much money you made.

That's my point: without that basic information, "I saved 80k" doesn't tell us anything at all.
 

Cookie

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My point which I am fully entitled to, is this,
what this man did prior to building houses and taking care of his kids does not relect at all, in what he is doing now.

It is very simple to understand Frenchie. Why are you being rude? I am not.

My question is this, why on earth do you want him to subtract what he could/would make if he was still working at whatever he was doing prior?
Why does this apply to you? He is not working at it. His job is what he is doing now...

This minute, not a year ago, not 10 years ago.

AND, if you know anything about business, you would know that many business owner/employee does not take wage. That makes their business less in value, but they sometimes, defer their salaries with interest, until, the profit hits a certain point.

I certainly, am not pulling any chain, maybe you are just a tadbit defensive?
 
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Frenchie

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Cookie -


I'm not sure what I said, that you thought was rude.

But I am feeling a little aggravated that, when I asked a simple question 4 pages ago, all I got was a lot of attitude and some personal attacks.

I've been told my question is "stupid", and "a load of garbage from people who don't want to lose business from DIY people". I was accused of not valueing scuba's parenting & housekeeping, and you yourself said I was "missing the boat on this one".


I'm still not sure what part of my question is not making sense to you or Scuba. I'm completely at a loss, as to why anyone is getting defensive about any of it, or attacking me.

The question is completely straightforward, and it's a valid question. If he saved 85k by putting in 800 hours - that's not the same thing as if he saved 45k by working 20000 hours. I'm just trying to find out where, on that continuum, he came in. Why is that such an offensive question? It's a perfectly valid, useful question, I think.


I've seen people nearly bankrupt themselves, and/or end up living for years with non-useable parts of their house, because of this kinds of vagueness. It's a valid question, I meant no harm in asking it, but I'm getting really tired of the brush-offs & personal attack coming my way.


Scuba -

repeating it, doesn't make it true.
 

Cookie

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Well, being asked, if I am pulling your chain is not exactly nice, and implying I am twisting things, too Frenchie. Just not nice.
 
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GabeS

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I'm with you frenchie. He still hasn't said how many hours he worked on the house. I also asked the question some pages ago with no response. They are both saying a lot of nothing.
 
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