Tag real estate

My Townhouse Remodel

This post is related to my post “The Art of Realestate in China” posted May 3rd,2010.

I am about 1 month away from everything completed and ready to move in. It has been a long road to reach this point, but joy is soon to be had.

After the physical construction of the building, the interior design work began. We went through a lengthy process before selecting a Kunming remodel company. Most important this involved visiting many construction sights of various remodel companies so I could observe the actual construction methods of the work crews. I was looking at their methods of wiring, plumbing, wall and floor fitting, material quality, building skills and finish. This is the ONLY criteria I used for selecting a remodel company. I had no interest sitting in their sales office and listening  to a bunch of sales talk or looking at the books of remodel pictures. Upon visiting a remodel company, I told them  to give me locations of their current projects. If I liked what I saw, then we can sit down and talk about doing business.

In the end, I did select a company AND a particular work crew from this company. Upon returning to this company’s office, I insisted that ONLY this work crew be assigned to my remodel. They agreed to my request, so the next step was to pick an architect from their company for drawing up our design. Their function for us was to create the plans as opposed to them “creating” a design for us. I already had very specific designs for every centimeter of our property. I also insisted that the A/C wiring and plumbing be installed to my specs (US standards). Drain and sink traps, circuit breaker layouts, jbox and wire splices, water valves, water pipe specs, conduit, and an industrial whole house  lightening surge protection system (German made).

In a nutshell, the concept of our townhouse was that it would be built as a green “Smarthouse”. Totally automated throughout, with my designs certainly exclusive to anywhere in China. This is a project I have though about for a long time, and patiently waited for western technology to catch up to a point of making it a reality. However, now being in China added a high degree of difficulty to this concept. So in order to pull it all off, it required a lot of electronics from the USA, Poland, Germany and China. Adding to the fact that all this mix of tech stuff had to talk and play nice with each other at the same time. I spent over 1 year alone on it’s design and implimentation. This involved numerous travels to these different places to aquire all the hardware and software necessary for this project.

The other challenge was to teach the construction crew the art of running over 3000 meters of low power cable over a three story 200 sq meter townhouse. The wire I used was spec’d by me and I traveled to Shenzhen to visit actual wire factories in order to obtain the exact wire I needed. I found out early that what is printed on the wire cable IS NOT actually what you get! SOP for China I suppose. For you tech heads, I needed a mixture of AWG 22,18,16 wire, RG 6 quad core, Cat 6 with a splash of Cat5e. In the end I used a quality wire company in Shenzhen to obtain it all. Next challenge was the wire routing done the right way as opposed to the Chinese way.  That is to say wire all run through conduit to a central 3 story chase, down to my server room. All this wire is run start to finish with no splices to the head end. All security, data, sensor and control systems are home run to this server room. The crew did an outstanding job of following my directions, and I have over 150 wires laying about in this room now. OK, enough details. So what does this all really mean?

Once I have personally put everything together,  my townhouse will have some smarts. All lighting will be provided with 21vdc LED’s. I had all the LED lights and LED controllers custom made in Shenzhen. The lights are dimmable and can be controlled for any location on earth. Lighting loads in the house will be 10% of what incandesent or CFL lighting requires.  My iPads and iPhones will remotely control the lights, as well as all other functions of the house. In addition to manual control, they will also be controlled via a stand alone Linux based wireless controller networked from within the house. This unit will make intelligent logical decisions for controlling lights, sensors, security systems, CCTV cameras, home theater  water, gas, even down to the electrical sockets. It will also monitor energy usage and climate inside and weather outside the house. It monitors the exact azimuth of the sun depending on the day of the year for lighting purposes.   In addition it will know which parts of the house are occupied and be able to specifically  identify me or my wife. The house will provide information verbally in both Mandarin and English as to the current status of the various systems, emergency conditions, or provide information I may request of it.

So who cares? I suppose that is all subjective, but for me a few things come to mind. First, it is a major challenge I wanted to accomplish for myself. I suppose I just have too much time on my hands. Next, it takes everyday living to a whole new level, and I am sure, a first in China. These things have been done in the western world, but China, at best, has just mastered automation of turning on a light when you enter a room. That’s about it. Then I want to have the ability to operate anything (sans 50 remote controls) from virtually anywhere in the world. Here is a few example scenarios……

1. The house will know when I am within a predefined radius of my house via GPS sensors. At which point it will turn on various lights in the house if it determines it is dark outside either because of the sun’s position and/or weather making the daytime dark. It will also vary the brightness of the lights according to the conditions. Then it will unlock the front door and disable the security system. As I reach the door, I simply push it open and enter a lit house carrying a handful of groceries.  When the house senses I actually entered, it will announce a greeting (English for me and Mandarin for my wife). It will tell me if I have emails and if anyone had come to the house during my absence. I could then request it turn on the TV and display images of whomever approached the house while I was gone.

2. Finished dinner, it’s movie time! One touch of a single button on my iPad and the system will lower the window shades, run through a 3 minute dimming ramp with the theater lights, lower the 110″ projector screen hidden in the ceiling, turn on the projector, sound system, networked media player and get down to business.  At intermission, one button push and the movie is paused, lights come up to 50%, kitchen lights turn on, hey maybe the espresso machine cranks up as well.

3. Bedtime. One button push and all house lights begin a 3 minute ramp to off. Except for the stairway and bedroom lights. The system checks that all windows and doors are secure, turns off the gas and hot water heater. Announces the house status and tells me a countdown when the security system will arm itself in stay mode. 10 minutes later the bedroom lights will slowly dim by the time I’m in bed. If during the night I get out of bed for the bathroom, the system will turn on lights at 20% dim to lead the way to where I am walking (bathroom, downstairs to the kitchen, etc.)

Since the house status is always being monitored, it will know if a water pipe is leaking and in seconds shut off the water main to the house. Then it will send me an email alert, a text message, and voice announcement to inform me of a problem. If someone rings my doorbell, I will get an alert on my iPhone from wherever I am. I can then open my iPhone and see who is standing there via the camera. Now I can instantly talk to them with my iPhone through the house speakers (no phone call needed), and even remotely open the door and disable the alarm for them if I want them to have access.

These are but a few examples of the power with a “Smarthouse”. Automation is limited only by your imagination. I’ve future proofed with extra wiring all around. I’m also thinking about incorporating an RFID system which will be able to identify anyone who may be a guest staying in the house. So then each guest can have their own custom settings working around the house. If they go in the bathroom, their style of music will play and their preferred light level will activate. Same goes for their bedroom. They can use their iPad to select music, movies, lights, etc to their liking while staying in the house.

Once all the initial systems programing is complete, I will add a SIRI voice based control interface. Currently my entire system does not rely on any PC, it  is a stand alone system. In the event of a power failure, the system will not be effected and continue to function normally on battery back up. However, the SIRI control will require a PC server, so I am still working out how to do it without using a failure prone PC. I am looking at a $35 Rasberry PI computer to implement the required server functions, but this is a project for  the future.

On to the actual townhouse design, I have mixed traditional Chinese design with American design. I think the mix will create a unique living space.

I’ve done a lot of radical surgery on the original layout. Like a balcony that was built off the master bath. Instead, I knocked out the outer wall, extending it to make the balcony part of the bathroom. Then this wall was rebuilt using glass bricks, so the bathroom wall is glass for natural light. The small Chinese bedrooms have been replaced with normal sized larger bedroom space. Small Chinese kitchen design eliminated and now includes a kitchen island. And of course a commercial gas oven/stove and a dishwasher. Funny enough, as I gave the contractor the interior color scheme, he freaked out. He says what are you doing? You have 20 different colors here! He told me at the very most they have only used 5 colors in a single house, and it was much bigger than mine. I told him it’s time to step out of the box my man. Haha And BTW, I had to spend 30 minutes explaining to him the difference between flat and semi-gloss paint finishes.

A lot of thought has gone into design as well as function. Getting down to the final weeks has me sweating bullets that it will all come together as I envisioned.

Onces completed and fully operational, I will do a final post on the townhouse project.

The Art of Real Estate in China

As many know, China is in the midst of a real estate boom rivaling anything in the world. People are getting filthy rich by the virtual minute here buying/selling. But this is a different world here when it comes to buying property and a very uncomfortable process for a westerner going about it.

There is no such thing as “looking” at property to buy here. If it is physically available to look at, you’ve already missed the boat price wise. That is because everything is purchased before a stone is turned. You get to look at some drawings or possibly a model of what a future development will look like. Everything is sold 1 year in advance of any actual construction. If you want to look at existing property to buy, it is easily 2 to 3 times the price.

So I will best illustrate how this works based on my own personal experience. It is typical of how it all goes down all over China.

First you get info that a developer will start a project, and that the pre sale date starts in such and such. You arrive at the “sell office” which will have a model of this completed project or maybe just drawings of floor plans of the units being built. They have slick printed booklets of the facilities and artist concepts of the finished development. At this time, no construction has started nor do they usually know when it will happen. From this info you are able to choose a size and floorplan to purchase. Many times you can also pick the exact unit you want on the model, but this is not always the case. Now you pay about 10% cash up front and receive a single piece of paper that identifies you as a “future owner” of said property.

A year later, and they are at the building phase maybe 70-80% completed. Now you go in and through a lotto system will get to know exactly which unit you will get. As I said before, sometimes you get to pick this in the beginning. Here they also will have “altered” the price you will need to pay for the property. There is no such thing as a “lock” when it comes to property prices or bank loans in China. But now at this point you will know the final price you will pay. This is usually 20-60% more than what they told you when you put in the deposit. If you don’t like it, then that’s too bad. If you walk away, don’t expect to get any deposit back. There are another 100 people to come in and take what you give up.

But at this point is where things get interesting. Right now you are holding a piece of paper that secures your purchase. Even when they raise the price, it will still be lower than the current real value. Property values go up an average of 2% per MONTH in China. So now your option is to stand fast and wait for the the day you come in and pay 100% up front to own your property. This is usually within 3 months of it being completed.  And this is where millions of people in China are getting very rich. They put their paper on the market to sell. You can get at least double what you have paid in the deposit. In my case, 14 months after I paid $5600.00, I am being offered $66,000 just for my paper. Look at the number carefully. I did not make a mistake. Thats a profit of $60,400.00 for doing nothing or really owning anything. So do the math, buy 10 of these properties a month and it becomes major $$$ in a hurry.

Ok, so I will not sell my paper and will wait until my property is complete. Now I pay the full price of the property and they hand me the keys. At this point I can sell it quickly (1 week) for at least double what I paid. Or, I can sit on it for 6-12 months and sell it for 3 to 4 times what I paid. In my case my property has tripled in value since I bought it 14 months ago. It still is not finished, but they said it will be worth 4 times what I paid when it is finished end of 2010. I have no doubt this will be the case.  I bought it for my own use, so I won’t be playing that game.

So, needless to say, the govt is trying to control this since it is fueling the housing prices into a bubble. They decided to impose a tax on property that is bought and sold within a 24 month period. Actually all this did was let the govt in on the profits. You can still re sell it, and now this tax is simply passed on to the new buyer. Doesn’t effect you at all!

Recently the govt added another rule since the first one is not so good. If you take a bank loan to buy this “second” house, they spank you with a higher interest rate. Third house, higher still. In any case, if you need a bank loan, under the best circumstances you are getting screwed. The loans are all ARMS only. Plus you cannot pay off early without penalties. Then they only allow you a 5 day window per year to make a pay off. The whole loan business is stacked against you big time. If you don’t have cash, it’s not a good idea to go house buying.

Now what do you actually get when you buy new property? It’s easier for me to list what you DON”T GET.

  • no warranties so you better do research on the builder/developer
  • no walls, floors, interior doors,electrical,lighting or fixtures of any kind. (You do get a front door)
  • no insurance. If it burns, just walk away.

The short of it is, property comes only unfinished. When I say unfinished, I mean unfinished. You get raw, rough structural walls and floors. Plumbing is stubbed to the wall and capped off. They have windows, so at least it is sealed from outside weather. Very basic electric like maybe a high amp line run into the kitchen, or a single light switch in a room. It is essentially just a box shell ready for a complete interior. At first you may think this is a load of BS. I know I did. However, there is some logic to it. You are 100% free to redo every detail of your new property from stem to stern. Since walls are solid concrete, you would want to do the electrical and plumbing things before anything else anyway. They got to cut channels in the walls to lay wire and pipe. Then re cement over them again. A real mess.

So you go get an interior designer and get it on! This is refined to a fine art in China. These guys are amazing at design. You get modeling, hi-res graphic rendering, and muti media presentations of your remodel.  You change and re change 100 times until it is a perfect detail of your dream house. Then they handle it all down to the finished home. What all does this cost? That’s the cool part. It is nothing close to what you would expect in the US for this work. In my case, our home is 3 stories and 2200 sq ft. For me to turn this into a Bill Gates or Taj mahal over the top completed remodel, I can expect to pay between $36~50,000. In the US it would be in the neighborhood of $200,000+ for the same thing easy. And in the end you end up with a killer home!

The pics are my “development” being built in New Kunming City. It will be 1km from the city center. The lakes, rivers and gardens are all private property for my use. Natural spring water swimming pools, clubhouse, restaurants, hot tubs, sports center and shopping mall. Shopping mall will be public. Beautiful views of the mountains and only 2km to Dianchi Lake. New lite rail train service to Kunming (15km) and to the new airport to be completed end of 2011 which stops right in front.

When it is all said and done lets compare values. I will have a 2200 sq ft  townhouse completed and remodeled ready to move in for approx $147,000. Easily 1/3 the price comparable in the USA. Plus, when you buy in China, you pay tax of 2% up front. Then no more taxes ever. Paying utilities is the only on going expense.

Hmmm… so why do I live in China? Let me sit back and think about that one a little while.