Home Renovation Costs: $75K Budget Became $500K - Avoid These Expensive Mistakes
From $75K to $500K: My Expensive Home Renovation Mistakes (And How to Avoid Them)
If someone had told me at the beginning that our "simple $75,000 refresh" would end up costing over half a million dollars, we probably wouldn't have bought the house. But honestly, I'm glad no one did tell me that, because what I learned could save you from making the same expensive mistakes we did.
I talk people out of buying homes all the time, and after you hear my story, you'll understand why. I'm going to share the mistakes we made, the lessons we learned, and how to do a project like this right. By the end, you'll know exactly what questions to ask before buying that fixer-upper.
The Initial Mistake: Underestimating True Costs
We bought this house in Burlingame thinking it would be a $50-75,000 renovation project. I figured we'd refresh the kitchen a little bit, update some systems, and that would be it. I even got an opinion from a contractor who said, "Yeah, that sounds possible."
This was a fixer-upper - one of the lowest price sales that happened that year. The disclosure package had a bunch of stuff in it, so I wasn't shocked. But once we got into it, it became a case of "if you're going to do this, maybe you should do this, and if you're going to do that, maybe you should do that too."
Initially, we ended up spending almost $400,000 over the course of about a year. Then that total climbed to around half a million that we invested into the property.
The lesson: We kind of knew about everything in the beginning - I just didn't have an idea of what things would actually cost.
Choosing the Wrong Contractor
We found a contractor who was recommended to us, and the prices seemed really attractive. It was the lowest cost option we had, and I thought, "This is great. I'm in real estate. I can navigate this project."
But it ended up being pretty challenging. The organization wasn't there. I remember one time the contractor said, "Hey, I need your tile selection for the bathrooms and kitchen." When I asked when he needed it, he said, "Next week." In retrospect, we needed a decision tree - I need to know this by this date, I want to know this by this date. We could have planned all that in advance.
The contractor was from out of the area. Even though he did a lot of work locally, his team was driving a meaningful distance to get to our house every day. They had the best of intentions, but the quality of work wasn't great. Visually, it looked good, but under the hood, it wasn't.
The big lesson: I found that cheap isn't always the least expensive.
The HVAC Disaster
About 3-4 years after finishing the renovation, our HVAC stopped working. When I investigated, I discovered that the furnace had been installed in the crawl space under the house, but instead of being mounted from the framing, it was just sitting on the ground.
I ended up having to pay for a whole new system. We also had the condenser on the roof, which we moved to the ground where it should have been from the beginning. This mistake cost us about $8,300 to redo.
Foundation Problems: Built on 1880s Technology
I brought in a structural engineer after the transaction closed. He told me with a straight face that the foundation was built with "cutting edge techniques from the 1880s." The house was literally built on top of the dirt - the foundation didn't extend below the soil line like it should have.
It's amazing the home hadn't settled more over almost 100 years, but we ended up re-pouring three-quarters of the foundation. As of now, we've re-poured almost all of it and underpinned it.
The takeaway: Consider the age of what you're buying and what was commonly done back then. I could have done a pre-purchase engineering inspection to know what I was getting into.
The $40,000 Fence and Driveway Mistake
When we bought the property, there was no fence between our house and the neighbor's house. We weren't in a position to do a property survey (which costs $4-5,000), so we discussed with the neighbor where to put the fence. We went along with their suggestion, even though it made pulling a car into the driveway tight.
A few years later, when we finally had funds for a survey, it showed the fence was about 8-12 inches off the property line. We ended up demoing the whole driveway and putting in a new fence.
The lesson: Get a survey done before you do any work involving property boundaries. The survey is the survey - you can't have 10 different surveyors with 10 different results.
Material Research Matters
For the driveway, we worked with a landscape designer who suggested a type of gravel that looked really cool. But after about a year, we started seeing pebbles wash out into the sidewalk and street. Turns out there should have been some type of adhesive to keep the pebbles in place.
Even on our second house, we made a similar mistake with limestone. We walked into the showroom, fell in love with this gorgeous limestone, and bought it. After about a year, we realized it absorbs dirt and requires sealing every 12-18 months with five coats - a 6-7 hour job for two people.
The takeaway: Do research on materials - how long they last, what the maintenance requirements are. It would have been nice if someone had pointed out the maintenance requirements upfront.
Getting It Right the Second Time
A few years ago, my wife and I had an opportunity to build a new house. We thought, "Let's be really thoughtful about this and remove any pressure. Let's try to find the best people we can."
We interviewed several contractors and got three bids. A friend told us, "I'm happy to give you our contractor's contact info. However, if you're just looking for a third bid, I don't want him to go through that. If you're going to take him seriously, that's fine."
The contractor we selected ended up being the most expensive of the three bids. Why? Because it was the most thorough. His bid said, "If you're looking to do this type of kitchen with these appliances and this quality, you might consider doing wainscoting, thicker hardwood floors, higher quality lighting." He put in larger allowances because he didn't want to come back with lots of change orders.
We were very familiar with change orders from our first project, and we didn't want that again.
The Value of the Right Team
With our new project, we found the best professional we could - someone who would deal with us straight. We thought, "If we have to pay 20-30% more to get the right professional with good communication, that's worth it."
We had weekly meetings on site during construction. Every Monday morning, we met with our general contractor. Sunday nights, we'd get an email from the foreman saying, "Here's the three or four decisions we need to make at the weekly walkthrough."
When challenges came up, the contractor called immediately and said, "This is what we learned, this is how we're going to take care of it, this is what it's going to cost. How do you feel about it?" Instead of "Hey, there's a problem. Get over here right now."
Architect vs. Designer
On our first house, we worked with a designer who was pretty new. Looking back, there were a lot of things we could have done differently from a design perspective.
For our new house, we found an architect. There's a difference between designers and architects. Anyone can call themselves an interior designer, but architects need to be licensed and have much more training.
Our architect would pop by throughout the project. I have a client whose architect stopped by once a week and caught the tile pattern installed completely backwards, even though it looked good. He told the contractor, "This is not what was in the plans. You need to rip this out and do what was in the plans."
Key Recommendations
When evaluating design professionals or contractors:
Check their websites. Having a good website reflects the value you place on your business and the type of people you want to attract.
Communication skills matter. People who can communicate effectively online are usually effective communicators throughout the project.
Get a detailed schedule. Ask for a timeline of when you need to make decisions and by what dates.
Always check references - and actually call them.
Get a property survey before doing any major work.
Demand a detailed timeline and project plan.
Focus on quality over cost.
Research materials thoroughly and question everything about ongoing maintenance.
When to Walk Away
It's important to understand the condition as much as possible before submitting an offer. Sometimes properties are on the market for just a week - is that really enough time? Sometimes you have to be okay with some elements of the unknown.
Some people might say, "I'd rather buy a newer home with fewer issues." That's totally fair. You'll pay a huge premium, but time is money.
On a monthly basis, I see homes that clients are interested in, and I'll say, "How do you feel about this level of unknown? Maybe this isn't the right fit. Let's be patient." There's always another house.
Timeline Reality Check
If you're thinking about major work, here's the reality:
Light refresh (countertops, painting, refinishing floors): 1-2 months
Major renovation: 8-12 months of planning before construction even starts
New construction: 2.5-3 years total timeline
It could take 1-2 months just to find the right architect, several months for plans, 2-4 months for permits, then another month or two to get bids back. By then, the contractor you want might have taken another job.
The Bottom Line
When I look back, I don't think any of this was stressful overall. There were stressful moments, but the process taught me a lot and helped me prepare for the bigger project.
A real testament to our new home project: we would work with all those same professionals again. In fact, we just bought another house and are working with the same team. We built such a level of trust.
Did the new house cost more than initially planned? Yes, but that was all client-driven - we chose more expensive materials and custom elements. The contractor did exactly what he said he would do, finished on time and on budget. What more can you ask for?
The key is understanding your comfort level for surprises and being willing to pay for quality upfront. Sometimes paying 20-30% more for the right team saves you much more in the long run.
Don't Make My Expensive Mistakes
Look, it's extremely expensive to buy in San Mateo County - I totally get it. These numbers are outrageous. But if you can be smart about how you're going through the process, you can save yourself from the kind of costly surprises we experienced.
My goal is to help you have a good experience in home buying, especially when you're considering a fixer upper. I've seen so many people go through experiences they probably could have avoided with the right guidance upfront.
If you're considering purchasing a home in San Mateo County that needs some work, I'd love to help you decide if it's in your best interest to take that on. Sometimes the best advice is knowing when to walk away, and sometimes it's knowing how to navigate the process correctly from day one.
Reach out to me - all my contact info is in the description. Let me help you avoid the expensive lessons I learned the hard way.
This article is copyrighted by Raziel Ungar and may not be reproduced or copied without express written permission.
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