The moral of this story is that sometimes doing things on the “cheap” is too costly in the end.
So you saw a nice looking stately but rundown house in the Ft. Rouge area, with one of the sides of the house facing a popular street, and the another side side facing Stafford St. You thought this might offer an opportunity to buy it inexpensively, upgrade it and find just the right buyer for it.
You found an investor to help you pay for the house, telling him that he would probably be able to resell the house for a profit off approximately $20,000. The initial cost of the house was $85,000.
You thought that you could estimate how much the renovations would cost, because you had some experience in Interior design. You knew that the important areas to change would be the kitchen, and upstairs bathroom.
There was no bathroom on the main floor, but there was a room off the kitchen that could be made into a bathroom. You decided not to hire a general contractor, because that would cost too much, and therefore eliminate any profit that you might have, by selling it. You did know a “Jack of all trades” who called himself a Contractor. You did not check out other houses that he had renovated.
You worked diligently using this contractor, to give this home a completely new look.
You bought new appliances, redid the bathroom on the second floor, built an entirely new bathroom on the main floor, near the kitchen, sanded and refinished all of the hardwood floors on the main floor, even went to a lot of trouble to change and upgrade the furnace, getting rid of asbestos.
And, you had the house completely repainted inside and out.
At the end of the job, the house did really look much better, but the costs had mounted and mounted until the cost of the job went up and up and up, until when you were ready to sell it on the market, You had to put it up for sale for exactly what you had invested ,:$135,000. And that did not include your own time.
You did get it sold, but you then had to go back to your investor to tell him that there was no profit at all!!!!! All of that work had been for nothing……..
What you learned, you learned the hard way. Sometimes doing things on the “cheap” is too costly.