Charles Chang struggled with opposing desires when he set out last year to become a first-time homeowner: to save money by buying a fixer-upper and maintain his tranquil lifestyle.
"I'm in sales, so I'm always looking for a deal," said Chang, 30, a district manager for a computer company. On the other hand, he said: "I'm a drama-free person."
So when Chang contemplated buying a dilapidated, junk-strewn Long Beach rental property that his father owned, he worried it "might be too much stress for me." But after a contractor completed a six-week, $45,000, front-to-back, floor-to-roof renovation that required little of Chang's time, the new homeowner decided that sometimes remodeling "is not a bad experience."
The impetus for buying a house came in mid-2000 when Chang moved from a two-bedroom apartment into a one-bedroom unit to be closer to the beach in Belmont Heights. Around that time, he started a new job that doubled his income--and his taxes. Operating from a home office, he set up his desk in the living room, but soon wearied of that setup.
"It came to a point where I really needed to do something quick," he said. To get a tax write-off on mortgage payments, he wanted to buy a house, but because he "couldn't afford to jump into a big house payment," the idea for a fixer came to mind.
While he considered other run-down properties, the grim 1930s, three-bedroom, one-bathroom bungalow his father owned stood out because of its setting in a tract of exceptionally tidy homes with impeccable paint jobs and precisely trimmed lawns.
"That's what attracted me," Chang said. "If I'm going to make this investment, why don't I buy the worst house on the block?"
Putting his sales skills to work, he talked his dad into selling the house for $180,000, convincing him that it "was a legal liability." Plus, the younger Chang stressed that he would buy the house as is and take responsibility for hauling away the debris a longtime tenant had accumulated, which included 20 tons of scrap metal, dozens of used batteries and an old trash-filled boat.
Before he went forward, though, Chang had the house's foundation and the plumbing system checked. "I was real careful," he said. "Those [types of problems] were two things I wanted to stay away from."
As he pondered how to finance the home's transformation, his banker at Wells Fargo suggested he talk to John Sway, a loan officer who deals only with renovation loans. In this type of home financing, the amount the bank will loan is based on the value of the house after the planned improvements. Plus, the bank pays the contractor directly during construction, with the homeowner as the second signer.
In Chang's case, based on the work he planned to do, the house would be worth $280,000, which would allow him to put up to $100,000 into renovations.
Yet, because he wanted to keep his mortgage to less than $2,000 per month, Chang decided to set a budget of $45,500 for the complete remodel--which included adding central heat and air-conditioning--but cutting corners where necessary and eschewing luxurious materials and products. Except for some unusual light fixtures that his friends say resemble hubcaps, Chang kept it simple.
"If it's clean, it's straight and it works," he said, "I'm OK with it."
To eliminate the stress of paying the rent on his apartment and the mortgage on the house while it was being renovated, Chang factored the first two mortgage payments into the construction loan.
At first, Chang considered acting as the general contractor, hiring tradespeople to do the work. But because he works full-time and thought acting as a contractor would be too difficult, he started searching for a general contractor who would supervise the entire project.
Chang interviewed several contractors and finally found Michael Hinkson of Hinkson Contracting by calling an apartment owners association and asking for a recommendation. After the trash was hauled away, at a cost of $2,000, the house was renovated from the roof down. To choose the color of the roof tile, Chang took a stroll around his new neighborhood to see what other homeowners had chosen.
"I wanted to blend in," he said. He also selected the color for the refurbished exterior siding and stucco based on other nearby homes, and replicated a curve in the driveway to match that in a neighbor's driveway.
The landscaping was chosen for its low-maintenance qualities and included palms, a layer of plastic to keep down weeds and automatic sprinklers set on timers.
All the windows needed to be replaced. Chang decided to save thousands of dollars by simple retrofits, leaving the wood framing intact and adding French-style window inserts.
The front, rear and garage doors were replaced, and Chang also opted to replace all the doors inside the house. "Doors make a huge difference when they're new," he said.