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Ted Strodder

Golden Gate
Sotheby's International Realty
189 Sir Francis Drake Blvd
Greenbrae CA 94904

Revitalizing Your Home For Maximum Resale Value


Tales From the Trenches From a Seasoned Veteran

Before 1987

My first fixer project, 1987. Note my dog Lucy in front.

After 1987

Nothing too ambitious or creative, but I made money.

Living room - beforeA typical ranch style living room, before...

???????????????????????????????The same living room after a little effort.


Exterior before.

Exterior after.

Revitalize Your Home For Maximum Value. The challenge: You have an older home that you're tempted to "just sell As Is". After all, why not leave the fix up to the next buyer? The answer: profit. The photos above are typical examples of sellers who chose to fix up their homes for top dollar, rather than just take the easy, far less-profitable route. Is it easy? No. Is it fun and rewarding? Absolutely. Talk to me. I have an experienced, responsible and affordable crew. Together, we can guide you towards what to do and what not to do.

Hardwood - laying down the main coat A dark stain on hardwood is a simple improvement.

The Fix Up Challenge: Where to Start and Where to Stop. If you're not experienced in the fix up business, don't worry. I can help. If you are experienced and want to launch a series of projects on your own, that's fine. But I have two words for you: be careful. It's easy to make mistakes, either by being too cautious or too ambitious. These pitfalls can be avoided, just talk to me. My time is free and if you do decide to aim for maximum resale value, there is no extra charge. It's simple, the more you make, the more I make. I've been involved in over 300 fixer homes here in Marin and I honestly enjoy it. I've been into fixers since I bought my first dream dump in 1986 (see above) and got bit by the fix up bug, literally. I got bit by many, many bugs, but had a good time and turned a small profit. Today, I turn those profits for clients. Just know it's not for everybody and it's not easy. It's a process, not an event, involving many hours of consultation, brainstorming, creativity and good old fashion know how. Even if you're an experienced builder, the first step in your process should be to speak with an agent like me, someone who specializes in fixers to start the process.

12 Eagle Rock Kitchen BeforeAn average kitchen in need of some help.

12 Eagle Rock Kitchen AfterThe same kitchen after Ted's crew had at it for a few weeks.

Pool beforeYou don't have to remodel your old pool...

Back yard afterYou can fill it in and put down grass...

back turf Or artificial turf!

How Much to Invest on the Fix Up. This is the hundred thousand dollar question. Literally. Be smart with your budget, and it could add $100,000 or more to your value at less than half the cost. Your agent should be able to come up with a list of improvements within a few hours of seeing your home, if not on the spot. I have a trusted, experienced and affordable crew who I often bring to your home on that first day. We share ideas with you and come up with a plan and rough budget. Just know it will be a dynamic process that can and will change as we work together and fine tune our ideas. It's not for everyone and very few agents specialize in this, but be creative and flexible. You will profit handsomely, I guarantee it. 

IMG_0011 Painting routinely returns 300% on your money.

Plan the Work, Work the Plan. I've been around construction most of my life and know that some type of plan is essential. This doesn't mean architectural plans by any means. Your fix up work won't require any. It means creating a schedule that maximizes the work in the minimum time frame. When escrow closes at 11:00 am, we should have a dumpster already on the way and be ready to start your project. It also means working six days a week and having a crew that is nice to the neighbors. It's still a people business and this will go a long way, believe me. Your project will run smoother and you'll make more money if we can get things done quickly and efficiently.

Make At Least Two Bucks on the Dollar. This is another old phrase in terms of investment dollars spent on fixer uppers and one that is readily supported in Marin, though it's really a generalization or hybrid of many different returns on various phases of your development. For example, if you don't know it already, paint, flooring and landscaping return you about 300% on your money, all things you can buy at Home Depot. If you spend $30,000 on any of those, your house will usually go up around $100,000 in value. I love those returns and suggest you really go for it in each department: do a great paint job, put new flooring in every single room and whatever your landscaping budget is, triple it. Just don't get caught up in the "cost". Treat it like one of the smartest investment returns you can ever make. So if at the end, I suggest investing $500 in potted plants and flowers to charm up a front and back entrance, let's go for it!

4, sm Invest in flowers and inexpensive furniture for your front porch.

I know what to do and, more importantly, what not to do. You may not all need new windows, plumbing or wiring. But you may need some of that done. Let me suggest what to do. I always treat your money like it's my money and I'm very thrifty, trust me.

Squeeze Every Last Nickel. This is where a seasoned, veteran specialist of an agent can be invaluable. Talk to him or her at length about what the top of the market is for the area your home is in, then shoot for that. What are buyers looking for in that area of Marin at that time? If it's a level yard and lawn, go for it. Whatever the cost, you will recoup up to 5 times  your investment.  
Old beforeI had these rocks removed and irrigation installed, with new sod.
12 Kenrick, sm
Two weeks and $2,000 later. Which yard looks more appealing to you?
12 Kenrick (4)
We removed this old landscaping wall.
Wall before
Not easy, but well worth it, as you can see...
Don't neglect the back yard, either. That too will help bring you top dollar.
12 Kenrick back patio
Back patio before...
17, sm
  And after.
Staging. Finally, ike it or not, staging is a reality, and not just on TV. In Marin County, staging your home for maximum resale is the last yet often most crucial step to getting you top dollar. It's more or less a requirement in many cases, though certainly not all. If you have nice furnishings and your home is immaculate and already free of clutter, great. But even then, I still suggest you have a stager in for a free consultation. They often have sage advice on how to rearrange or clear out some of your furnishing. Just remember this phrase: "How you live and how you sell are often two very different things." Many clients used to balk at the concept of staging, but thanks to HGTV, most are now well-informed of the high return on investment at this crucial phase of your project. I have sellers who now routinely volunteer to move out and rent a temporary home in order to get top dollar. That's an extreme, but it just shows you the power of how buyers buy what they see. a minimum of $6,000 here. Believe me, money well-invested and I've got dozens of very recent sales to prove it. 
A recent small living room before...
8, sm
Same room after, note the "fire" in the fireplace thanks to Photoshop.

Bretano (3)

Buying Your Own Fixer Upper.  It's well known that one of the most profitable ways to get into the Marin real estate market is to buy a fixer upper property. This can mean anything from a total dump that borders on a tear down or just an older home in original condition that just needs freshening up. You can be a first time buyer stretching to get into a good neighborhood, or a seasoned investor looking to add to your early-retirement portfolio. Either way, I've had dozens of clients make the leap into the fixer upper business. Some have done it once, moved into the house and are quite satisfied with their one result. Others do it as a hobby or full time business and continue to trade out every two years. Homes that need work of any kind can be a great investment in Marin, providing you're careful, do your homework, some planning and do a good job. The following information is intended to help you with not only your decision about whether or not to jump into the fixer upper world, but what to do if you feel this is the thing for you. There are whole books written on this subject and this is only intended as an overview into what can be a very involved process.

What to Look For in a Location. You'd think that location was the most important component when choosing your fixer upper. It's not. Certainly, it's something to consider, but remember that the best A locations come with A prices. I had a client once buy a fixer that was right on a busy street, which he made over $200,000 on after a year's work, tax free. The reason? When he bought it, the price was cheap, certainly a reflection of the B location. But he wisely planted some mature trees and installed a nice big fountain to create ambient noise to block out a lot of the sound. And when he was finished with his remodel, he still had the cheapest fixed up house in the area so it sold right away. So yes, be careful with your location choice, but also be price conscious and don't turn your back on a good possibility just because it's in a secondary location.

Never Buy a Fixer in an Area You Wouldn't Live In. What locations work the best? It's too involved to answer here, but in a nutshell, if you wouldn't live there, don't buy it. If the market changes unexpectedly or your living situation changes, you may have to live there. There's nothing wrong then with designing your project with an eye for your own taste, provided it's keeping with the market.

Never Buy An Investment Property More Than 20 Minutes From Where You Live. Sounds simple, I know, but I strongly advise against you buying in any "much cheaper area", two hours away, or in another state. This won't be an investment in a mutual fund that you can just ignore. You'll want to keep an eye on your property and being close to it is very important.


Never Buy An Investment Property More Than 20 Minutes From a Home Depot. Of course, it could be any major hardware store, but you'll be amazed at how many times you go there during your fix up and how many times you'll go during the life of your rental. It's all about your valuable time.

Buy a Special Property. If you're in a condo building, buy the top floor end unit that's in the worst condition. If you're on a hillside, buy the worst looking house with the best view, or a long private driveway. Buy a house with the potential to have some level land. People love to have a view home with a small lawn. Buy the house with the biggest level yard in the area, the worst house in a great neighborhood or the cheapest home in the whole town. Either way, give yourself something to brag about when you tell your friends what you bought. Your buyers will do the same thing when they buy the house from you.

Envision the Ad for the "After" Picture of Your Property.  When you've decided on a potential home, make a mental note of what a magazine ad may read like after you've completed your project. "Gorgeous, newly remodeled four bedroom, two bath home on a sunny, level lot at the end of a cul de sac. Fully fenced yard, close to shopping, schools and downtown. Looks like a new home. Priced to sell at: $_ _ _,_ _ _." Sound enticing? It does to me and hopefully it will to your buyer.

8, sm

The Least Expensive Home in the Neighborhood. This is an old concept and certainly not mine, but it does work. You may not find the absolute cheapest house in the area, but you can get pretty close. A good rule of thumb is to do this: After you find a house you're interested in, stand in the middle of the street and do a slow, full turn around. Assuming you don't get hit by a car, check to see If most of the houses are in better shape than yours. If so, you've got a contender. Also, what are the yards like and what kind of cars are in the driveways around you? Are the lawns pretty well kept and are the cars of a recent vintage? Or are the weeds overgrown and are there trucks up on racks missing their engines? Pretty simple, but you'd be surprised at how many people don't open their eyes and look around them. And you don't have to do it in the daytime only. Go at night. It's when you spend most of your time in the home, anyway. See who the neighbors are. Watch, listen. How does it feel?

Built 1950-1970. Here's why these are my favorite vintage houses. In 1950, they discovered reinforced concrete for foundations (using rebar), adding additional strength. Concrete was cheap, so many of the 1950's homes have massive, overbuilt foundations showing no signs of cracks or wear, let alone any slipping or settling. Into the 60's, they continued with the good foundations, but added grounded electrical wiring (also called 3 wire) and copper plumbing. The 60's was also the decade of the California Ranch Home, a one story, 3 br/ 2 ba house of approximately 1650 square foot. They had large living rooms, a two car garage and were mostly built on level lots. People snapped them up like free cookies. Ironically, this is exactly what many buyers still look for today, though without the avocado green appliances and orange shag carpet. This is exactly what you should look for in a fixer. Find yourself an old Rancher in tired condition. Fix it up and rent it. You'll be on your way to making a small fortune (or large one) in Marin County. Try for the one story homes if you can, (but don't shy away from the two-story models). Homes on one floor will appreciate more in the future as the Baby Boomers age and don't want to climb steps. That swath of the population turned fifty-seven in 2003, the first year of the government's retirement guideline. I also predict that level land will become more and more valuable in the future, so find a beater house with some level land or a place to create some yard of any kind.

Good Bones, Just Not Bones, Literally. My client Pete is a foundation contractor. A few months ago, he was on the 6:00 news because he uncovered a lot of human bones underneath an old, historic house in Mill Valley. Turns out, the house had been built on top of a private family cemetery for one of the founding families of the town. While this is a great story, this isn't what I'm talking about with good bones. It's a well-worn phrase that means the house is basically solid, including a decent floor plan, straight walls, not a lot of dry rot or termite work and a foundation without any human remains underneath. It may be the ugliest house in the world with broken windows and such a bad smell you need gas masks to go inside (see photo above). As long as the basics are in good shape, it could be an easy fixer for you. As a rule, a fixer should take you from three to twelve months to fix up and either rent or resell. Any less than that and it probably didn't need enough work. Any more than that and it probably needed too much. You'll find most of the Ranchers have good bones and make for great fixers.

Getting the Best Price. Obviously, every seller wants the best price for their house, fixer upper or not, just as you're going to want to get the highest and best price once it comes time to sell. But one of the biggest mistakes buyers often make is being too price conscious. If they can't buy the house at a bargain, they pass, only to see someone else pay fair market value and go on to make a nice profit after doing their fix up. Let's face it, the days of the good deals are in the past, literally. Home prices appreciate slowly here and we can't turn the calendar back.  I've watched in sad dismay as talented fix up buyers or good builders refuse to make an offer on a well-located fixer simply because they remember when they could have bought that house for [$_,_ _ _, 000] just two years ago. And I recently heard of a talented builder who wrestled with going forward on a house over just $5,000 on a Counter Offer. He dragged his feet, hoping the seller would bend. The next day, he ended up losing the house to another builder who paid $40,000 more, fixed it up and made a profit of $475,000. Like every buyer since I've been in the business, the builder paid more than he wanted to, but he had a good agent and had confidence in his abilities and the market. So if you feel like you're not getting a good price on the home you're looking at, everybody feels that way. In fact, when I look back on the hundreds of homes I've helped people buy, not one of them has ever felt like they got a good deal at the time they were buying it. Of course, after a few months they start feeling a little better. After six months or a year, they feel like they got a great deal.


Same bathroom after!

An Opportunity to Make Money. Folks, I got news for you, real estate is likely to keep going up in Marin County. Our average is around 7% per year since they started keeping track in 1952 and the average house in Marin traditionally has doubled in value every 8 years or so (see chart above). In fact, the average home has never gone down in value since they started keeping track in 1952. except for these last few years. We have no more available land and are a no-growth county. Now, I'm no economist and I'm not that good at math, but I'd say it's a pretty safe bet that our real estate is going to continue to go up. As more people discover the quality of life we have with great schools, no smog, no crime and no real traffic, I doubt you'll see less than around 5-7% appreciation, going forward, even in a bad year. This is for the average home, mind you, but I suggest you stick with the average homes for your fixer upper. So while it might be painful to pay these outrageous prices, if you don't, someone else will and you'll just be paying more next year. What you're buying with a fixer upper is an opportunity to make money. How much you make depends on the job you do. But in Marin, it's generally not a question of if, but how much. If you're careful and watch what you spend, you can do pretty well.

Should You Rent It? Believe it or not, my first choice usually is to rent out your fixer after you're done. That's the safe bet and should always factor into your fix up material choices and planning decisions. If for some reason the market changes, you'll be ready to cover yourself and protect your investment by getting a quality tenant in there who will make your payments and take care of the house for you. Don't worry about tenants trashing the place. If you're careful, it's easy to find good quality tenants in Marin and the way the market appreciates here, your house will be worth an extra $100,000 in no time. Then, when you decide the time is right to sell it, you can do a 1031 Tax Deferred Exchange and not pay any tax on your nice profit. That's something your agent should also help you with when you're ready.

Or Should You Sell It? If you decide to sell, you hopefully feel okay by now on the price you paid and your project went more or less to plan. Or, you added some square footage and made a dramatic impact on the house value, otherwise the market may not support your new asking price. You'll want to factor in the state of the market when you explore selling. Not only how many other homes you'll be competing with, but what time of year it is and what the buyer activity is like. Marin is pretty much a twelve-month market, but like the rest of the country, there are more buyers out there in spring and summer than in the fall and winter. Your agent should help you figure out all these things. If you don't know of anyone with fixer upper experience who is full-time, you can always call me. Anything I can do to make your project a smooth and successful one, don't hesitate to ask.

Fixer Upper Q & A

Questions From a New Client Prior to Our First Meeting on Fixer Uppers

What is the first step? Great question. I'd get to know the market as best you can: learn the values and neighborhoods, so when a good fixer comes on the market, you can jump on it. This is still a popular way to build equity and make money, so competition is often tight. The more you know, the more it will help you when the right fixer comes along.

What is the best way to finance a fixer and how much cash do I need? Talk to your loan person, as I pretty much stay out of the loan end. But as a general rule, I suggest 25% down. Ideally, you then fix up the property with whatever cash you have left over, then rent the place out for more than your mortgage payment. So if your payments are $4000 a month, you'll likely rent it for $4500 and be on your way.

How much DIY (Do It Yourself) work should I do versus others doing it for me? The answer may mean the difference between a profit or a loss. This will depend on your skill level, but I generally advise people to hire licensed subcontractors for all the specific trades like plumbing, electrical, tile, roofing, etc. Many clients design their own landscape, interiors, painting, and decorating. This is not only profitable, it's fun and gets you involved in the tasks, helping you appreciate what you're paying the pro's for.

Who do I need as resources? I can hook you up with some good reliable (and affordable) people here in Marin, but here are my thoughts:

  • Contractor: Maybe you'll need one, maybe not, but you'll make a lot more money without one. You can easily hire your own subs and you can also pull your own permits as owner/builder.
  • Design consultant: These people can be very expensive and are usually only for the uninvolved, the rich, or both. Get some design help online and make your own decisions. Chances are you wouldn't be that far off from someone charging you close to $200 per hour. This is also a fun part of the project.
  • Real Estate agent: Find one who will stay involved in your project long after escrow closes. We are generally trained to move onto the next deal after closing. But not me. I stay with every project long after the keys are exchanged and all while the fix up goes on. There's no charge for this. I do it for fun as it's great to take something nobody wants and turn it into something everybody wants.
  • Licensed Home Inspector and Pest Inspector: Yes, I have these guys.
  • Plumber: Yes, see me.
  • Electrician: Yes, see me.
  • Landscaper: Yes, see me.
  • Roofer: Yes, see me.
  • Tile setter: Yes, see me.

What is the basic fixer formula on a hypothetical $900K house? Are there common percentages that apply? It's all different between projects, but you should roughly make at least two bucks for every dollar, if you're careful. Remember my advice is to hold on to the house if you can, but you should make an additional $150k if you put $150k into it. While that's not a ton of money, you've now made your $900k house worth $1.2 mil. You then get next year's appreciation based on the new, higher value. That's where the real money is made. Before you know it, you've got a $1.5 mil house. Sounds expensive now, but so did $250k for the same house fifteen years ago. Prices only dropped once here in Marin and that was brought on by something that had nothing to do with the quality of life here. After a five year period, they started to climb back up in 2011 and haven't stopped since. Slow but sure is the safe way to go.

What improvements should or should not be made for separate market tiers? Look at this on a project by project basis. You may put $500k into that same $900k home, just because it's on a nice lot and you can make money with that math. Or, you may put in just $75k for a quick fluff and buff, then rent it. See me to brainstorm and strategize as each project presents itself.

What are the top 5 mistakes you have made?

#1: Easily, not buying enough real estate. Not trusting my gut and jumping on properties that seemed like a good deal. I quickly learned to look at tomorrow's value not today's price. The population is growing and we're in a zero growth county with a tremendous demand to live here. It's a no brainer and frankly, I just didn't have the guts for it. Of course, hindsight is pretty easy too.

#2: Under spending for the neighborhood, on my fix up. I grew up fairly poor, so to me, a cosmetic fix up seemed to suffice, when I should have spent more and done more to attract a buyer that fit that particular neighborhood. Live and learn, I guess.

#3: Not managing hourly people better. If you're on top of it, you'll save more money, simple as that.

#4: Being too vanilla with my color choices. Today, color is everything, where as it used to be off-whites and neutrals, or choices. Take chances, have fun with it. That's a part of the reward, no question.

#5: Not being organized enough so that the day the deal closes, my plans and crew are ready to go. This is doable with good organization.

Fix and sell or fix and hold? Easy. Fix and hold (rent). You then keep it or exchange out of it tax free (deferred, actually). More wealth has been built on real estate in this country than any other vehicle. We can go over this later.

What are good sources of information? Your eye, for one. Trust it. Look around at what other people are doing. There's rarely such thing as an original idea. And of course, any of the good online design sites out there.

What about books? Don't know. I never used them, not for real estate investing, anyway. I still read at least three books at a time though, to try and stay sharp(er).

Did you or your clients set up a Corporation or LLC? Licensed builders and developers often setup separate entities like this to protect themselves. But I'd ask your Accountant if you're really interested. No reason you can't just take title in your name and have at it, but you may need legal advice.

What about tools and equipment. Do you suggest buying my own? You may want to look at buying certain things if you think you want to do this venture again, like a small jackhammer ($1500) a nail gun, etc. Other than that, your subs will have their own tools and you can always rent the big stuff if you need it.

Anything else I've forgotten? Yes, you forgot to tell me the most important part of all: when you want to get going on your next (or first) fixer upper in Marin.