We were one year into our Union Hill project when we shifted our focus to Vallejo. My husband’s mother passed away suddenly in 2016, and he inherited her two single-family homes in Vallejo, CA. It took us over a year to work our way through the probate process in California, but we were in no hurry because her partner occupied the properties. In June of 2018, he passed away. We traveled to Vallejo almost weekly that summer, making arrangements for his funeral and sorting through the houses.
About the houses
The two lots are directly across the street from each other near the interchange of two major freeways. The “little house” was where we always stayed; at roughly 600 square feet, it is a tight 2 bedroom/1 bath house. My MIL purchased this house in the early 1970s, but she moved across the street with her partner to a slightly larger 2 bedroom/1 bath in the 80s. She kept the little house as her “mom cave” – she gardened, listened to records, worked on the computer there. She always planned to build something bigger on the property, so she never maintained the house. It is a time capsule that is wasting away… and it’s where my husband and I always stay when visiting town.
The other house was larger (1000 square feet) and somewhat newer, but it was still not in great shape. Plaster walls had cracks, the wood floors had stains, and they had not updated the kitchen since the 1970s. But it had large rooms and great light, and it seemed like it had a lot of promise if someone cleaned it up.
Renovation begins
Work over in Bremerton went on hold – we needed time to decide what to do with these properties. They were in no condition to sell; no matter what we did, we needed to fix them up a bit. After quite a bit of discussion, we decided to rent the larger property and hold the older, smaller one. We would still have a place to stay in town, and since neither house had a mortgage, we would make some income after the two properties’ expenses.
Work started in July of 2018, and we hoped to wrap the work in October. A family friend oversaw most of the work, and my husband and I planned to travel down every other weekend to help and ensure the project stayed on schedule. We were only three weeks in when I learned I was pregnant! I did as much as possible for as long as I could, but my usefulness quickly diminished as I started getting sick. We missed our fall deadline, and settled on February/March as our target to rent.
Renovation scope
The house was in rough shape, but it was bright and had good bones. Most of the work was cosmetic. Our focus areas were as follows:
- The wood floor was damaged throughout the house. We sanded and stained some areas to get ready for renters, but we know that we will eventually need to re-sand the entire house.
- The plaster walls were dingy and cracked, so we painted and patched all walls.
- The kitchen was the worst room of the house – there was missing drywall behind the stove, painted yellow cabinets and counters, wallpapered cabinets, old appliances, peeling linoleum. We spent most of our time in here. At the start of the project we discussed opening up the kitchen to the dining room, but elected to keep the wall in place to maintain the original charm. For this same reason, we did not replace the counters or cabinets. We patched the walls, stripped the cabinets and counters, peeled up the linoleum, and dug out the old grout from the tile counter tops. We regrouted, repainted, and installed black and white checkerboard vinyl floors. Although the kitchen has new appliances, it still retains its original charm.
- The washer and dryer were in the detached garage. We needed that space to store family items, so we moved those appliances into the mudroom off the kitchen. There were already laundry hookups there – the space was initially intended for laundry, but my husband’s family had used it as a pantry.
Bathroom before 
Back bedroom before 
Front bedroom before 
Kitchen before… that wallpaper reeeeaaallly wants to come off 
And here’s a peek at the lathe behind the stove. Also notice painted tile 
Kitchen before. Notice two types of wallpaper
I budgeted $25,000 to complete the work.
Beyond our impending bundle of joy, there were many other things we did not anticipate.
- Termites: Maybe it’s our climate up in Seattle, or maybe we have just been lucky, but we have never had a termite problem. There was some evidence of termite damage in a piece of window trim, but thankfully it was isolated. I expect they will come back.
- Managing from out of town: We worked with a family friend on the property, but that was a big mistake. He missed every deadline and was not upfront about expenses and budget. I wish we had contracted a firm – they would have managed their deadlines or been fired. We didn’t really have that option. And now we no longer have a family friend.
- Exterior work: I never seem to allow time for exterior work, and this property needed a lot of it. My MIL had an aviary in the backyard that housed her parrots. After the birds were re-homed, we had a large structure that had no other use. Demolishing this structure was a lot of work. My MIL was also an avid gardener, and she had over 100 orchids in the backyard. Moving all these plants to the house across the street took a week, as we had to construct an area in the yard where they would be protected from wind and direct sunlight.
Budget actuals
I had planned $25,000 and five months for the remodel. Things came up, and we went over our cost and timeline.
2018:
- Cleaning: $750
- Transportation: $5881
- Labor: $7683
- Materials: $9704
2019:
- Transportation: $2235
- Labor: $3488
- Materials: $4081
Total: $33,822
We were significantly over budget, but it’s roughly equal to the cost of travel, so I can’t get too mad at myself. Our expenses are also relatively low, and we earned back this initial investment in twenty-one months. If we look at cash-on-cash returns, we earn 55% (not including interest on the loan, which repaid).
Back bedroom after 
Dining room after 
Front room after 
Hallway after 
Kitchen after 
Kitchen after… no more exposed lathe!
Vallejo today
The house is holding up well. And the kitchen especially still looks amazing. Our initial budget was small, and there was some work that we deferred.
- Windows: We will need to replace metal windows throughout the house, as the current ones are in bad shape.
- Bathroom: Beyond painting, we did not touch the bathroom at all. It’s not in great shape, but everything is functional and it certainly was not as bad as the kitchen.
- Foundation repairs: As mentioned above, there were some cracks in the plaster. Some of those cracks have returned, so we need to look at foundation issues.
The same tenants that rented in 2019 are still in the house today. After property management (best decision ever), we earn $1575/month. Of this, we put $50 towards vacancy (low because we have no mortgage), $130 towards maintenance (low because we did a remodel), and $260 towards our annual tax bill for the two houses (low because of California prop 13). Since we earned our initial investment back, I will start putting money in a separate capital expense fund to address the items above. I am also considering putting all of the income on the Vallejo rental towards renovating the other property, as it needs pretty much everything done to it. More on that to come!
