As the 10 year anniversary of SoPo Cottage approaches, it seems odd that we will hit the 'pause' button. I started this business because I love renovating old houses. I love taking an awkward layout and turning it into a floor plan that works for today's lifestyle - while maintaining the antique charm and uniqueness of the house. I love fixing the safety issues and lousy energy hogs that cost too much money and are bad for the planet. I love working with a team of skilled craftsman to create something beautiful.
But it might be time to take a break. Why? Well there are 3 issues. First, there are some new building code changes and ordinances that will likely cripple my business model. New energy and ventilation regulations will add more costs, while also requiring dramatic changes to the exterior of a home. Later next year, the city will require sprinkler systems be installed - which adds around $30,000 to the cost of the project. And now houses built before 1942 need a 90 day review by the historical and architectural review board, adding new challenges to timelines.
Thanks to COVID and tariffs, lumber costs are up 120% with large percentage increases across most other products as well. That's a staggering increase and you can add long lead times as well.
And then there is the unprecedented cost increase in real estate. When I run the numbers on a new project, it quickly becomes apparent that it could be a money losing proposition. My profit margins are much smaller than most flippers. As a recent appraiser pointed out, I just put too much money into these houses. I do it because I want the home to be the best that it can be. Yet as much as I love this work, I need to make a small profit.
So for now I guess I'll hit the pause button. I'm a bit terrified. I'm a workaholic by nature and have no idea what I'll do every day. I may continue to update this blog and social media periodically. But in the meantime I'll just do some thinking if there is something else I want to do when I grow up (and I do owe you all the before and after pics of the ranch). And hopefully some perfect project will come on the market that will make logical business sense.
Thanks so much to all of you for following along as we've renovated 17 houses. Your support, comments and advice have been a great source of energy and motivation. And hopefully in return you've gotten a bit of inspiration or ideas for what you can do in your own home.
I hope the adventures will start again soon. But for now, it's probably time to step back. But I promise to get Romancing the Ranch Before & After photos out soon!All the best,
Laurel