Illinois Foreclosures - The Urban Rehabber - Dirty Secrets

DIRTY LITTLE SECRET #8

"When Your Electrician Tells You It's Time to Rewire..."
When an electrician tells you "This house is 'not up to Code'. You're supposed to have an outlet every 12 feet, and on every wall..." The Dirty Little Secret is- He's not telling you the Whole Story.

He's right about one thing. The Code does require outlets every so many feet, switched lighting outlets in every closet, and more. But that's the detail to be found for new construction and, often, "gut rehabs". For most of us, the New Construction Code simply doesn't apply.

Whether he's just "misinformed," or intentionally misinforming you (maybe telling you an "untruth"? ), buying into this questionable advice may cost you $ thousands in unncecssary expense.

Most savvy rehabbers of distressed property follow the principle of "fixing what's broke," and keeping what's functional and safe. When it comes to electrical work, we add outlets where needed; each bedroom, for example, should have at least two outlets for both convenience and safety. But, generally - and here you should check your local Codes - as rehabbers, we're not obliged to "bring the place up to Code."

Just to be clear, any new work we do must indeed be up to Code. But that's the new work, not the whole house. Let's look at examples of new work we might very well do, always in accordance with Code requirements.

Responsible rehabbers will always add a new circuit, with additional outlets, to the kitchen - generally over-the-counter appliance outlets. The existing kitchen circuit is isolated, to serve only the refrigerator as originally intended, together with the center ceiling light. Basements should, of course, be on a separate circuit, and perhaps more than one if also serving laundry appliances or a home workshop.

We generally find the second floor is already on its own circuit, and that's proper. Where that's not the case, it's sometimes possible to "redistribute" these lines within the service panel itself to create the needed separation of circuits. And we always see to it there's a modern circuit breaker panel, properly installed and grounded. There's more, of course, but you get the idea.

One should take care in laying out their overall Scope of Work. One thing that will almost always "guarantee" the Building Department's insistence on completely rewiring the house - yes, up to the modern New Construction Codes - is one's declared intention to "gut the house" - e.g. 100% new drywall.

The argument here is that you're already opening up all the walls; so the Department's not requiring undue or needless destruction of the wall surfaces (you've already announced your intention to do so!). Given these facts, they will contend the electrical work should now satisfy New Construction code requirements. And, once said, you won't talk them out of it.

The bottom line? No surprises here. Electrical contractors, and other tradesmen as well, will of course pursue their own interests. Selling a whole house rewire is clearly more attractive to them than some 'patch work' (as they will put it). But, think about it: That's their problem, not yours.

Many of us, intentionally or not, are in the business of providing affordable housing, not full scale renovations. Fulsome renovations work well in many markets (here in Chicago, welcome to the north side). Others among us appreciate that the market for "affordable housing" is far less subject to the market vagaries of mid- and upper-priced housing. This 'affordable' market is seldom interest rate sensitive, or subject to 'housing cycles'.

Our buyers mostly want to know- Compared to the rents they're paying, can they own their own home for the same money, or even less? Really pretty simple. Overbuild for your market, spend too much (following your contractor's advice), and you move beyond that 'affordable' price range.

The challenge, and the opportunity for us today, is simple. Keep it Affordable and you will sell your product. To do otherwise is to risk joining all those rehabbers and developers out there, waiting and hoping for 'their' market to come back.
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