| Whether your renovation project involves putting in a | | | | than your stom¬ach!" She was cautioning me not |
| new $200 sink or $50,000 kitchen, at some point labor | | | | to waste food, to take only as much as I could |
| and materials people are going to stick out their hands | | | | eat-good advice for anyone. |
| and say, "Pay me!" | | | | A similar approach applies when renovating. Never |
| In almost all cases the supplier will want cash (unless it | | | | tackle a project that you can't really afford. Yes, a |
| is a large company that handles its own financing, rare | | | | new $25,000 bathroom will add enormously to the |
| in this field). So now you must find a way to come up | | | | livability of your home. And eventually, when you |
| with the money. | | | | decide to sell, it will add value and salability. But if you |
| Typically you'll need to pay a portion of the renovation | | | | can't afford to spend $25,000, it doesn't matter. You |
| cost up front when the job starts and then the balance | | | | shouldn't tackle the project. |
| when it's finished. For big jobs, midpoint payments may | | | | An exception here is if you're renovating in order to |
| also be required. | | | | resell quickly (which most people aren't). Here, you |
| As you begin figuring out where to get the money, the | | | | must create a sales plan that incorporates all the costs |
| most impor¬tant mistake to avoid is to think | | | | of renovation (including finance interest and sales |
| piecemeal. You should always attempt to arrange for | | | | expenses), plus your profit, to be recouped from the |
| the maximum amount of funds you will need. If you | | | | sale. Even so, you're walking a fine time line-if you don't |
| estimate your project is going to cost $10,000, then get | | | | sell quickly enough, the renovation costs could cause |
| financing for the entire amount. (Actually, arrange for | | | | you to lose big time. |
| $11,000, just to be sure!) | | | | So how do you know if you can afford it? Most of us |
| Never, ever, start any renovation project unless you | | | | think we have an accurate feeling for what we can |
| have arranged for all the financing. Be sure you know | | | | and can't afford. We can afford a Chevy or maybe a |
| exactly where the money is coming from to complete | | | | Toyota. But a Lincoln or a Rolls Royce is out of our |
| the job before you begin. The last thing you want to | | | | reach. |
| do is to find yourself halfway through the project | | | | Maybe so, and then again maybe not. My own |
| without enough money to finish. You could end up with | | | | experience in deal¬ing with hundreds of real estate |
| a ripped-apart home that you might not be able to live | | | | borrowers is that often people either exaggerate or |
| in, might not be able to sell, and (if things go really | | | | minimalize what they actually can afford. It may turn |
| badly) might even lose to foreclosure! | | | | out that you really can afford more, or less, than you |
| Can I Really Afford to Do It? | | | | think. |
| My mother used to tell me, "Don't have eyes bigger | | | | |