The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: sammybiker on June 12, 2018, 07:32:31 PM
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I’ve enjoyed contributing (and learning) in my last couple of threads here at MMM and wanted to start another to capture some on-going adventures in purchasing single family properties, managing the rehab from afar and ultimately renting out the properties.
Goals
1) Buy (5) single family properties in 2018 and get them cashed out into long term mortgages
2) Purchase under market and achieve a minimum of $40k in equity per property after all repairs are completed
3) Cashflow $250-400/mo after expenses & debt service per property
Funding
1) A single line of credit established on an existing single family property
2) Private money from existing private money lenders that I've worked with over the years
3) New lines of credit that I'm currently in the process of setting up on existing properties - probably will not be established until late August
Background
I work in oil & gas and I’m currently on assignment in Mexico and will be here for another 10 months. The area I’m focused on purchasing in is Southeast Texas, where I know the market, rents are strong and rising, housing supply is limited and there is major capital expenditure committed to the area over the next 10 years.
The Team
1) Project coordinator – my boots on the ground. This is our first project together but we’ve built a relationship over the last few months and he’s an active investor in the area. Solid guy, organized, communicative.
2) Various contractors, some that I’ve worked with before, others only via reference. Despite not being in a HCOL, contractor prices tend to be higher in Southeast Texas due to labor demand in the area. A high school graduate that wants to work 60-70 hours a week can make $80k+ and those with further aspirations can make much more in supervision. So trying to find a decent contractor at a reasonable rate is difficult. Hurricane Harvey has further compounded this problem as rates have skyrocketed.
Previous Threads
https://forum.mrmoneymustache.com/real-estate-and-landlording/anatomy-of-a-mostly-dyi-renovation-on-a-budget/msg1514890/#msg1514890
https://forum.mrmoneymustache.com/real-estate-and-landlording/my-long-distance-lease-option-flip-project/
Let’s get started.
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Property #1
Purchase Price: $83k
Estimated Rehab: $52k
Estimated After Repair Value: $230k ($100 sq ft)
Estimated Monthly Rent: $1800
Source: MLS
Funding: Purchasing cash via line of credit, private money
Schedule: 6 weeks (11-June through 23-July)
This 2300 sq ft home is in a premier local neighborhood consisting almost entirely of owner-occupants. Two level, two car garage on a large lot. My project coordinator has a flip on-going in the same property that went under contract at $111/sq ft and there are another couple coming on the market at $105/sq ft (expecting over asking), so I feel my comps are conservative at $100/sq ft.
This house flooded during Hurricane Harvey with the lower level being impacted. The remediation was performed prior to myself purchasing it and I obtained the certificate with the closing documents. Being that this is my first flood rehab, I did a good bit of research prior to purchasing and also put in a good bit of padding in the scope of work.
Scope of Work Summary:
Insulation and drywall for walls on the first floor. Doors, door trim, paint, baseboards, flooring, kitchen and downstairs bathroom. The previous owners were living in the house, upstairs, so I know that HVAC, electrical, plumbing and water heater is probably OK. The intent is to leave the upstairs as-is, clean the carpet and repair the carpet on the stairway (see photos below).
This is a rental property and I don’t want to over renovate.
Scope of Work Details/Estimate: (first pass, before getting inside the property or getting contractor bids):
Drywall (Walls) floated & taped all-in @ $7500
Insulation all-in @ 1500
Paint all-in @ 3000
Flooring Install/Carpet Repair all in @ 3500
Floor Baseboard all-in @ 1000
Door Jam/Trim all-in @ 750
Kitchen Cabinets all-in @ 5000
Kitchen Countertop all-in @ 1500
Kitchen Sink/Faucet all-in @ 300
Dishwasher all-in @ 600
Used Fridge all-in @ 350
Used Stove all-in @ 350
Bathroom Vanities (x1) all-in @ 800
Bathroom Shower (x1) all-in @ 3000
Bathroom Toilets all-in @ 300
HVAC all-in @ 5000 (left in as contingency - HVAC operating OK)
Hot Water Heater all-in @ 800 (left as contingency - Water heater operating OK)
Interior Doors all-in @ 2000
Interior/Exterior Lighting all-in @ 1000
Electrical all-in @ 1000
Plumbing all-in @ 1000
Misc all-in @ 10000 (being my first flood house and limited inspection performed, I'm leaving $10k missed scope/overruns)
Project Coordinator all-in @ 1800
TOTAL @ 52,000
Listing Photos:
(https://farm1.staticflickr.com/880/41864755055_f588bec7bd_z.jpg) (https://flic.kr/p/26MrP8D)3c77482868548bf85d70b76261c1f240l-m1xd-w1020_h770_q80 (https://flic.kr/p/26MrP8D) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1721/41864753495_b904eba23a_z.jpg) (https://flic.kr/p/26MrNEK)3c77482868548bf85d70b76261c1f240l-m14xd-w1020_h770_q80 (https://flic.kr/p/26MrNEK) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1756/40953963860_9e287f3c21_z.jpg) (https://flic.kr/p/25oXLDb)3c77482868548bf85d70b76261c1f240l-m13xd-w1020_h770_q80 (https://flic.kr/p/25oXLDb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1732/41864754235_93210ea21e_z.jpg) (https://flic.kr/p/26MrNTv)3c77482868548bf85d70b76261c1f240l-m6xd-w1020_h770_q80 (https://flic.kr/p/26MrNTv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/892/41864754455_175c21be43_z.jpg) (https://flic.kr/p/26MrNXi)3c77482868548bf85d70b76261c1f240l-m4xd-w1020_h770_q80 (https://flic.kr/p/26MrNXi) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1742/41864754275_18ba9fb7ff_z.jpg) (https://flic.kr/p/26MrNUc)3c77482868548bf85d70b76261c1f240l-m5xd-w1020_h770_q80 (https://flic.kr/p/26MrNUc) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1731/41864754505_69d525de7d_z.jpg) (https://flic.kr/p/26MrNYa)3c77482868548bf85d70b76261c1f240l-m3xd-w1020_h770_q80 (https://flic.kr/p/26MrNYa) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1738/42047768294_024c03b1d4_z.jpg) (https://flic.kr/p/274BNAj)3c77482868548bf85d70b76261c1f240l-m2xd-w1020_h770_q80 (https://flic.kr/p/274BNAj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1722/41864754025_fe2768d324_z.jpg) (https://flic.kr/p/26MrNPT)3c77482868548bf85d70b76261c1f240l-m8xd-w1020_h770_q80 (https://flic.kr/p/26MrNPT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1740/40953964160_2153998b40_z.jpg) (https://flic.kr/p/25oXLJm)3c77482868548bf85d70b76261c1f240l-m9xd-w1020_h770_q80 (https://flic.kr/p/25oXLJm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/892/41864753835_7f77144815_z.jpg) (https://flic.kr/p/26MrNLB)3c77482868548bf85d70b76261c1f240l-m10xd-w1020_h770_q80 (https://flic.kr/p/26MrNLB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Woo-hoo! First to PTF. Cannot wait to see you succeed!
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Good to hear from you Dicey! And thanks. Hopefully I'll be done buying houses after this year. I told myself that after the last one but after a few months break, I got the itch again :P
The interior concept will consist of grey walls, white ceilings, dark floors. Concept photos below...
(https://farm2.staticflickr.com/1742/27908613547_f519365d92.jpg) (https://flic.kr/p/JwbWuc)Grey Concept 1 (https://flic.kr/p/JwbWuc) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/891/42727658962_d2767188ae.jpg) (https://flic.kr/p/286Gqpd)Grey Concept 4 (https://flic.kr/p/286Gqpd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/875/27908613507_570b3ce244.jpg) (https://flic.kr/p/JwbWtv)Grey Concept 3 (https://flic.kr/p/JwbWtv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1739/27908613527_dd18f78c0d.jpg) (https://flic.kr/p/JwbWtR)Grey Concept 2 (https://flic.kr/p/JwbWtR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Some budget updates based on actual spent...
Drywall (Walls) floated & taped all-in @ $7500 actual $7926 all-in now. My materials estimate was short.
Insulation all-in @ 1500 actual $1367 all-in now. My material estimate was a little long.
Paint all-in @ 3000 actual $3950 all-in now. My materials were based on lower quantities (painting only downstairs). After feedback from the coordinator and others, I'm going to repaint the upstairs as well as the downstairs for better flow and to eliminate any lingering flood water smell. Same goes with the carpet, see below.
Flooring Install/Carpet Repair all in @ 3500 actual $6000 all-in now. The upstairs carpet soaked up the flood smell and will be ripped out. I'll run the same dark laminate upstairs as I am downstairs.
Floor Baseboard all-in @ 1000 actual $1750 all-in now. Updated to include increased quantities per the above.
Insulation and drywall kicked off yesterday. Paint delivered yesterday and will start upstairs today.
The flooring/kitchen/bathroom contractor went through yesterday to assemble his estimate. Waiting for that to come back and it should be interesting. This guy is new to me but comes heavily referenced from guys I trust. Just worried he may be coming in too high......always fun seeing how your estimates mate up to actuals :)
I'll post progress photos tomorrow.
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Update
Drywall started Monday and texture finished today. The project coordinator will inspect this afternoon and pending his approval, we'll release paint to downstairs on Saturday.
No pricing back yet from the flooring/bathrooms/kitchen guy, still waiting. Sent a second contractor in to put together another estimate this afternoon.
(https://farm2.staticflickr.com/1732/40989433680_ab59c80b56.jpg) (https://flic.kr/p/25s6yzN)IMG_20180612_160226801 (https://flic.kr/p/25s6yzN) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1743/41899323185_6f9594a55b.jpg) (https://flic.kr/p/26QuZ2T)IMG_20180612_160156054 (https://flic.kr/p/26QuZ2T) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1747/40989433790_900d6eca16.jpg) (https://flic.kr/p/25s6yBG)IMG_20180612_160128714 (https://flic.kr/p/25s6yBG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1742/41899323355_93c1cd97e2.jpg) (https://flic.kr/p/26QuZ5P)IMG_20180612_160124545 (https://flic.kr/p/26QuZ5P) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1751/41899323475_f20a46c3e4.jpg) (https://flic.kr/p/26QuZ7T)IMG_20180612_160117358 (https://flic.kr/p/26QuZ7T) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Need some input from the forum - what to do with this fireplace??
- I was thinking of installing some white brick vaneer or fixing the existing and painting it white?
- Would rather just remove it but I believe the cost of doing so once the roof is repaired, etc. is not efficient. Plus possible loss on resale/appraisal.
- Frame up a simple mantle around it?
(https://farm1.staticflickr.com/875/42750340682_5f5554548d.jpg) (https://flic.kr/p/288GETm)7ddfdb9b50672cd8bb78d02de0f46074b5b97f57-1 (https://flic.kr/p/288GETm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/876/42750340602_37b0b919d4.jpg) (https://flic.kr/p/288GERY)a169a6327290d3cf6c08f40d87d907572c816da3-1 (https://flic.kr/p/288GERY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
A photoshop representation of option 1...
(https://farm2.staticflickr.com/1740/42082808564_659e3ae37f.jpg) (https://flic.kr/p/277HoQU)White (https://flic.kr/p/277HoQU) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #1: Painting started yesterday, on-going today. Finalizing quotes for flooring, trim, kitchen, etc. Pretty happy with my contractor choices and everyone is getting along well. Hope to have some progress photos of the paint later this weekend. Received feedback from a neighbor that this house was rented out before at $2,000/mo. Good news!
Property #2: Under contract but slowly turning into a monster. 4bd/3ba 1800sq ft partial brick in a nice neighborhood, best zip code, good schools @ $84.5k, after repair value being $158k. Gross rents will be $1600/mo.
Originally thinking this was $20k cosmetic - ha, no. Wasn't able to get into the house until well into the inspection period and it looks like I'll be replacing the roof, ceiling, flooring, bathrooms and worst of all the HVAC. Budget was roughly intact until the HVAC hit. Current setup is non-functioning, non-confirming and dangerous. Talking with my guy, we're looking at entire new ducting with mini splits + hacking up the existing upstairs floor to get to it. Rehab looking at about 55k right now.
HVAC guy is going back in Monday to perform a detailed take-off and inspection package so I can hammer the sellers for 1) lack of disclosure and 2) a lower selling price. After discussing all this with the project coordinator this morning, I'm going to need a price reduction from $84.5k to $78k to make this work. If not, I'll walk away.
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Love your work.
I would remove the fireplace if it were feasible. Looks heavily damaged and it breaks up the space.
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Thanks AR for your comment! You gave me some great feedback re: the PHX market three years ago - thanks again for that.
Update
Property #1: Paint has been completed and it looks good. Flooring will be delivered next Monday and I'm hoping to start on it by Tues/Wed.
The original contractor that I had high hopes for to finish the house came in sky high on his estimate - $26k for flooring upstairs and down, baseboard, bathroom, doors hung, door trim, kitchen installation, stair repair and dealing with the fireplace. Labor only (lol). No doubt this guy will perform top notch work but after respectfully grilling him on prices ($3/sq ft for click lock laminate flooring install - I can install 200q ft per hour myself, 350sq ft per hour with a helper), $3/linear foot for baseboard - man, come on...with a nail gun, you can do a house in a day. Just nuts prices.
I sent it out to estimate again, my drywaller/painter came back with a decent price and we're moving forward. I'll update the scope of work prices later this week but in short, we're doing all flooring, baseboard, doors hung, door trim, refreshing upstairs bathroom (paint), total downstairs bathroom rehab for $10.5k. Kitchen install will be sub'd out to an all-in specialist for a $3k install fee and I've still yet to figure out what the hell to do with the fireplace - received a 3.5k estimate to drywall/stone veneer over it - we'll see.
Property #2: Per the inspection results and the $20k+ HVAC repair required, I sent the inspection report and requested a reduction in price to partially cover this.
This offer was refused. No problem, I requested a termination of contract and my earnest funds returned citing inspection results.
Because the inspection report was not issued until a couple days after the inspection period (inspection was pushed back due to sellers agent not being available to let the inspector into the house), the seller refused. I requested return of 50% of the earnest funds, to cover my inspection costs. Seller refused. Seller started saber rattling about suing due to failure to execute the contract. Blah. I issued instruction to the title company to release the earnest funds and let's move on to the next one.
Sellers come back nonetheless, threatening to sue this morning. Ahhh, fun. On the phone with my attorney, working on issuing them a nice letter to cease legal suit and hopefully we can move on.
The sellers are in foreclosure (unknown amount), so I can understand their desire to get the house sold. Unfortunately, the pre-inspection price won't work. It's tough that they won't accept my earnest funds alone and move on. 99% chance they are saber rattling w/the lawsuit stuff but incase they aren't, I'm ready to play ball.
The search for property #2 continues. A couple wholesale deals popped up this week, which I'm taking a look at. I won't post here unless I'm under contract - obviously, I'm making a lot of offers and most don't go anywhere. But in real estate, like many things, it may run dry for months and then when it rains, it really pours. So I need to remain patient
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Now for some photo updates of the interior paint - poor quality photos but something to document the progress. The wall gray was a lot lighter than I wanted but I had to make some sacrifices to keep the contractor moving - my first choice was backordered a couple of weeks.
ALSO - I'm looking into painting the exterior and possibly adding some trim to pop like the below - thoughts? I would leave the brick as-is (just power wash it to remove flood related grime).
Excuse the mess in the progress photos, it's not my contractors fault - I have a 10yd dumpster on the way to clear it all out.
(https://farm2.staticflickr.com/1806/42042959685_e72cbc3295_z.jpg) (https://flic.kr/p/274caag)Screen Shot 2018-06-21 at 7.23.21 PM (https://flic.kr/p/274caag) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/887/29072008328_93bf385ae8_z.jpg) (https://flic.kr/p/LhZDdU)Screen Shot 2018-06-21 at 7.22.12 PM (https://flic.kr/p/LhZDdU) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1832/42042960195_c2825f6749_z.jpg) (https://flic.kr/p/274caj4)Screen Shot 2018-06-21 at 7.21.59 PM (https://flic.kr/p/274caj4) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1812/29072008798_41846f12e3_z.jpg) (https://flic.kr/p/LhZDn1)Screen Shot 2018-06-21 at 7.21.50 PM (https://flic.kr/p/LhZDn1) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1824/42042960465_18842079ab_q.jpg) (https://flic.kr/p/274caoH)Screen Shot 2018-06-21 at 7.21.40 PM (https://flic.kr/p/274caoH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/875/29072009028_51f041c969_q.jpg) (https://flic.kr/p/LhZDqY)Screen Shot 2018-06-21 at 7.21.33 PM (https://flic.kr/p/LhZDqY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1765/42042960765_13b78fde49_z.jpg) (https://flic.kr/p/274catT)Screen Shot 2018-06-21 at 7.21.14 PM (https://flic.kr/p/274catT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1791/29072009638_4b0aa2bbe3_z.jpg) (https://flic.kr/p/LhZDBu)Screen Shot 2018-06-21 at 7.21.04 PM (https://flic.kr/p/LhZDBu) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Budget/scope of work update showing the original 12-June estimate vs where we are today 22-June.
Certainly some growth but nothing insane. I've applied $5,000 of the misc/unscoped budget line towards some of this growth, namely the fireplace.
If we can keep this on track without going over the remaining $5,000 allowed for misc, we're good.
Below are all-in numbers, including both labor and material.
(https://farm2.staticflickr.com/1816/29086222748_77d43689ae_o.png) (https://flic.kr/p/LjfuF7)FloodRehabUpdate (https://flic.kr/p/LjfuF7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Wow your total estimate was really close! I'm a real estate newb but your posts are very informative and it looks like you are getting work done pretty efficiently. I'm just commenting to say good luck haha!
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Thanks Grif.
My estimate wasn't awful for never personally seeing the inside of the property but I need to improve and get my team to improve. The fireplace bust should have been something I picked-up on. But it's always a learning experience and I tend to absorb knowledge by paying for it - harder to forget that way :)
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Property #2 is now under contract and we should be closing this week.
Property #2
Purchase Price: $87.5k
Estimated Rehab: $40k
Estimated After Repair Value: $157k (1825 sq ft, $86 sq ft)
Estimated Monthly Rent: $1600
Source: Wholesaler, off-market
Funding: Purchasing cash via line of credit, private money, personal loan
Schedule: 2 weeks (8-July through 21-July)
This 1825 sq ft home is in a good area of the best local zip code and elementary school. Owner occupant mix vs renters @ approx 70/30.
Single level, two car garage on a large lot. Comps are conservatively $86/sq ft, rents conservatively $1600 (likely closer to $1750+).
No history of flooding, the home is in good condition and requires mostly a cosmetic rehab. The below rehab goes all-out but I think I can cut the kitchen and cut a large portion of the flooring (leave the wood floors in place, just replace bathroom and kitchen flooring) - kitchen, leave the cabinets, replace hardware, replace the countertop with granite and new sink/faucet. Potential savings there...but we'll keep the budget fat for right now and slim it down as we go.
Scope of Work Summary:
Complete interior paint inside, baseboards, new flooring throughout entire home, brand new kitchen cabinets/countertops. Bathrooms - cosmetic rehab only, likely paint over tile, new flooring, new vanity, toilet. HVAC, electrical, plumbing and water heater are OK, shouldn't have to touch much of that.
Scope of Work Details/Estimate: (first pass, before getting inside the property or getting contractor bids):
Paint all-in @ 4000
Flooring Install all-in @ 5000
Floor Baseboard all-in @ 1700
Kitchen Cabinets + Countertop all-in @ 7000
Kitchen Sink/Faucet all-in @ 300
Bathroom Rehab x2 Cosmetic all-in @ 3200
New Lighting Interior/Exterior all-in @ 3000
Exterior Paint all-in @ 4000
Misc all-in @ 10000
Project Coordinator all-in @ 1800
TOTAL @ 40,000
Listing Photos:
(https://farm2.staticflickr.com/1840/28141183187_9172883b46_z.jpg) (https://flic.kr/p/JSJVkz)34306083_10209445569295923_3635111198069882880_n (https://flic.kr/p/JSJVkz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1830/28141183117_7d946ff18d_z.jpg) (https://flic.kr/p/JSJVjn)34418514_10209445569815936_556823569120624640_n (https://flic.kr/p/JSJVjn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1831/28141183087_687ba33961_z.jpg) (https://flic.kr/p/JSJViR)34339188_10209445570295948_8400603603139559424_n (https://flic.kr/p/JSJViR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1775/28141183007_758b4f8864_z.jpg) (https://flic.kr/p/JSJVht)34403142_10209445570815961_4810910992735141888_n (https://flic.kr/p/JSJVht) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1802/42959916952_c81ac294be_z.jpg) (https://flic.kr/p/28sdNBj)34322475_10209445571095968_1704458407072759808_n (https://flic.kr/p/28sdNBj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1786/43009513741_a185dc7f9b_z.jpg) (https://flic.kr/p/28wB11n)34449068_10209445571335974_8406356621638238208_n (https://flic.kr/p/28wB11n) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1834/42959916862_94dc880c0e_z.jpg) (https://flic.kr/p/28sdNzL)34460244_10209445571735984_6163341648160882688_n (https://flic.kr/p/28sdNzL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Hey Sammy, here's a crazy idea. I hate desks in kitchens, especially between two doors. Think about ripping out the lower portion of the desk. Remove the uppers, trim the top to make it into an even base, then flip it over and put it where the desk was. Then carefully remove the glass fronted cabinets and hang them where the flipped uppers were. You'll have to remove the glass doors on whichever side goes against the wall, but you won't need to add a backing. Voila, a more functional area where the desk was, and an open kitchen with better sight lines for minimal cost. Assuming those glass door uppers aren't too wide to fit, of course.
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More ideas. I don't love the way the kitchen narrows. Could you push the peninsula back a bit and remove part of the wall? Again, not much $$, mostly labor. It will eat into the adjacent living area a bit, but could be a good trade off.
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@sammybiker, I can't help myself, I keep coming back for more. I now see you have a budget for replacing the cabinets. Your layout (with the changes I noted, of course, lol) looks solid. What about just replacing the doors, hinges and hardware but keeping the boxes? Faster and probably cheaper. Also, do you know the website 99centknobs.com?
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Thanks Dicey for the feedback.
- Agreed, I hate the desk in the kitchen too and will have it removed along with the upper cabinets. Interesting idea on swapping out the glass with that area. I'll look into that.
- I'll check out opening that kitchen a bit, as you mentioned. Drywall & paint are cheap...the kitchen as-is feels small and constricted.
- Right there with you on keeping the boxes and just refreshing or replacing the faces, hardware, etc. And I didn't know about 99centknobs.com but have it up now, great resource, thank you!
Thanks for the input, I really appreciate it! :D
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+1 Dicey's kitchen feedback.
Also, I don't know how good it is in TX but where I am, I can consistently find high quality full kitchen sets of cabinets for $800-$1200 at the habitat store. Typically they are stained wood and everyone wants white nowadays so I paint them and add new hardware but the quality on the old cabinets is much better than the newer particle board.
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Thanks @ tralfamadorian
Habitat here is hit and miss but that's something that I'll see if I can do once I'm in town in a couple of weeks.
I've done the painted cabinets gig before and love it - definitely a cost effective way to transform a kitchen. Thanks for the feedback.
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I've done three houses with 99 Cent Knobs and they have been of excellent quality. I'm sad to see they have now broken their 99 cent ceiling, but I guess I'm happy they're doing what it takes to survive. I was also pleased with the bathroom hardware I purchased from them. Good prices, superior quality. Heavy metal and no plastic parts, including the TP roller.
I, too, find Habitat's ReStore to be very hit or miss, alas. There's an awesome one we visit when were driving through Glenwood Springs, CO, but it's too far from home to be much help to us. We did find a beautiful Oak front door for DH's daughter's place, which we happily paid $100 for. They were thrilled.
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Update
Property #1 Flooring is underway, a little behind due to a slow plumber who was required to cut and cap a couple water lines come up in the living room (previously a wet bar?) and kitchen (previously a kitchen island). Lines were capped today and we're going full on tomorrow for the downstairs flooring. Upstairs is mostly complete.
Kitchen installation will start next Monday.
Flooring looks OK, both in the bathrooms and the living areas. However, we can see the doors and bathtub are off color white, almost yellow - requiring a paint over for the tub and possible replacement of the doors.
I'll fly into town this Sunday to see for myself. No other major budget changes except for installing a water heater (+$800) and finalizing the fireplace estimate, which was reduced from $3500 to $2100 (-$1400).
A couple progress photos below - you can see how the tub and doors look like crap vs the brand new trim/flooring.
Kitchen Layout (will be white shaker)
(https://farm1.staticflickr.com/834/43129209512_f0dbc35f96_z.jpg) (https://flic.kr/p/28Hbtoy)8d75ab001ef6ea2ba618be490fda2928a6a1c602-2 (https://flic.kr/p/28Hbtoy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1768/42460649544_4a63cbba1c_z.jpg) (https://flic.kr/p/27G6VNy)8d75ab001ef6ea2ba618be490fda2928a6a1c602-1 (https://flic.kr/p/27G6VNy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Granite
(https://farm2.staticflickr.com/1787/43129209802_581ec07e27_z.jpg) (https://flic.kr/p/28Hbtty)9ebd9ab861947bbe6ff1c66bce01325ccee7decc-1 (https://flic.kr/p/28Hbtty) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Bathroom flooring
(https://farm2.staticflickr.com/1784/42274751935_ec9120d848_z.jpg) (https://flic.kr/p/27pF9Vn)339d9a48d214ac8fd97a5c169479e2f4132e1832-1 (https://flic.kr/p/27pF9Vn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1804/43129191282_cdd36668e5_z.jpg) (https://flic.kr/p/28HbnYf)257b763d08586525343ba124ef87052be430804b-1 (https://flic.kr/p/28HbnYf) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/840/41368407070_920e0fb1aa_z.jpg) (https://flic.kr/p/262zUaL)47cc1c01b55b49d15acdbb9f356c1d053d8f6cad-1 (https://flic.kr/p/262zUaL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/915/41368407200_c024d166b2_z.jpg) (https://flic.kr/p/262zUd1)13e0f9b466604c4a45d211a5cd659bceb780010a-1 (https://flic.kr/p/262zUd1) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Main house flooring
(https://farm2.staticflickr.com/1770/41368406800_b67d998aac_z.jpg) (https://flic.kr/p/262zU67)350b745146c9f43b4dcfb3e8f0b58b625aba0de1-1 (https://flic.kr/p/262zU67) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1808/43129190632_b0ccd188d8_z.jpg) (https://flic.kr/p/28HbnM3)e07eef00b3e1a5666222c8d85d50f9ff7ea8eeb4-1 (https://flic.kr/p/28HbnM3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #2
No major changes here, closing was pushed out until next Monday when I'm in town. The final HUD came through today, funds go to escrow tomorrow and I'll walk this with my contractor next Monday to firm up my numbers.
Focus will be on cost savings here - really hoping to cut the kitchen rehab down and keep the $8k of misc/uncaptured scope to a minimum.
Looking forward to posting some solid updates and pictures next week as I get my boots on the ground.
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Can't wait!
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This is a great resource. When you are evaluating a property, how to you calculate your expenses outside of the obvious debt servicing, property taxes and water etc? What do you figure for long term capital expenditures, vacancy and management? Also, do you have any tips on finding good investment areas long distance?
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Honestly I'd leave the tub yellow vs. painting. If you are renting it out I seriously doubt anyone would care.
In the kitchen can you extend the upper cabinets to the walls on both sides,or are the windows to close to the corners? It looks odd with them floating.
If there is a lighter granite available at the same price I'd encourage it. That medium brownish creamish granite looks like a home Depot special that was popular 15 years ago. Go light or go dark.
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Posting to follow. Great stuff!
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Love your ideas. Rebuilding America one house at a time.
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PTF I love all the pictures, they really help illustrate your vision and progress.
Are you allocating any funds to revamping the landscaping? House #2 especially could use a refresh to really help the curb appeal. Both houses look like great investments!
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@Adam Zapple Calculating those numbers will vary market to market. My single family properties in Ohio suffer a higher vacancy/capex/management fees than these properties in Texas, due to difference in market (higher demand here, higher rents, lower management costs). I can give a breakdown of these expenses later based on a couple properties that have been purchased during this thread.
Re: long distance markets, the biggerpockets forum is probably the best place. You can read all day about the better US cashflow markets, then read about the sub areas of those markets that are desirable and then you can reach out to investors that buy in those areas and talk to them. When you get serious, buy a plane ticket and go check the area out.
@MayDay Thanks - I'll leave the tub for now and reevaluate after the cabinets are painted. I'll post photos of the kitchen later today, it's installed and looks OK. Agreed w/your suggestion and the granite that went in was quite a bit lighter. Pics to follow later today.
@patchyfacialhair Sounds good.
@midwesterner1982 Thanks!
@Stachetastic Thanks! House #2 landscaping, agreed. And it looks far worse, just saw the house Monday night. Got my landscape guys going in tomorrow to clean it up, just to make it presentable. Not sure what I'm going to do about the bushes up front - girlfriend loves them and thinks they add privacy. I hate them and prefer a clean look to the house.
Thanks all for the feedback. I'll put together some photo updates later today as home #1 is really coming along as well as some updates to the estimates of both #1 and #2.
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Awesome thread! Thanks for sharing! How did you find/build your team since you are remote?
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Oh, boy...waiting for more pictures. Pictures!
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Property #1 Update
Kitchen is in, floors finished, baseboard going in along with electrical.
I've decided to paint the exterior and while this will bust the budget, it needs to be done now and I really think it's money well spent.
(https://farm2.staticflickr.com/1767/28484775357_92036b5220_o.png) (https://flic.kr/p/Kp6Vjv)Screen Shot 2018-07-11 at 3.26.09 PM (https://flic.kr/p/Kp6Vjv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1783/41545180820_31e7df069d_o.png) (https://flic.kr/p/26icUR3)Screen Shot 2018-07-11 at 3.25.59 PM (https://flic.kr/p/26icUR3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1790/43354184241_13917cba42_o.png) (https://flic.kr/p/2944wxc)Screen Shot 2018-07-11 at 10.03.02 PM (https://flic.kr/p/2944wxc) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/921/41545180120_0d078f6294_o.png) (https://flic.kr/p/26icUCY)Screen Shot 2018-07-11 at 9.32.36 PM (https://flic.kr/p/26icUCY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/833/28484774657_53e1630660_o.png) (https://flic.kr/p/Kp6V7r)Screen Shot 2018-07-11 at 9.32.57 PM (https://flic.kr/p/Kp6V7r) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Love this thread. Keep the updates coming! :-)
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Awesome work. Thanks for sharing.
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Wow, that kitchen space us tricky! Nice job!
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Thanks @Dicey, @Swish and @MaybeBabyMustache.
Update
Property 2
Dumpster delivered, demo on-going - living room to the kitchen opened up as of this morning, on track to start interior paint next week.
I'm probably going to keep the kitchen as-is, just upgrade the hardware, probably install granite countertop and a new sink.
Significant room to keep this rehab around $25k if not surprises pop-up.
(https://farm2.staticflickr.com/1802/41602634260_5174dd6baa_o.png) (https://flic.kr/p/26ohnKA)Screen Shot 2018-07-14 at 3.57.39 PM (https://flic.kr/p/26ohnKA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/914/42506382325_e22642542b_o.png) (https://flic.kr/p/27L9jyM)Screen Shot 2018-07-14 at 3.57.33 PM (https://flic.kr/p/27L9jyM) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1821/41602636210_6ce18db767_o.png) (https://flic.kr/p/26ohokd)Screen Shot 2018-07-14 at 3.36.37 PM (https://flic.kr/p/26ohokd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1789/41602635410_809c4dcd39_o.png) (https://flic.kr/p/26oho6q)Screen Shot 2018-07-14 at 3.37.27 PM (https://flic.kr/p/26oho6q) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1822/42506383165_b6e5f63518_o.png) (https://flic.kr/p/27L9jPg)Screen Shot 2018-07-14 at 3.37.20 PM (https://flic.kr/p/27L9jPg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/846/41602635810_e0f03239d0_o.png) (https://flic.kr/p/26ohodj)Screen Shot 2018-07-14 at 3.36.46 PM (https://flic.kr/p/26ohodj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1770/42506382615_67511237de_o.png) (https://flic.kr/p/27L9jDM)Screen Shot 2018-07-14 at 3.37.44 PM (https://flic.kr/p/27L9jDM) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Nice work sammyb! Yesterday afternoon a dumpster just like yours was delivered to our flip house. This morning, there was an old television and a pizza box inside that were not there when the box was delivered. We removed the gifts* and proceeded to fill the entire dumpster. In one day. Crap! It's the fifth one that size, not counting the 10 CY concrete dumpster. I am so tired, but not resorting to takeout...
*We're thinking of putting the TV at our curb with a sign. Not sure what to say. Something along the lines of "Thanks for the TV, but we don't have time to watch it. Please take it home, it misses you." I'm up for any and all other suggestions.
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Nice work sammyb! Yesterday afternoon a dumpster just like yours was delivered to our flip house. This morning, there was an old television and a pizza box inside that were not there when the box was delivered. We removed the gifts* and proceeded to fill the entire dumpster. In one day. Crap! It's the fifth one that size, not counting the 10 CY concrete dumpster. I am so tired, but not resorting to takeout...
*We're thinking of putting the TV at our curb with a sign. Not sure what to say. Something along the lines of "Thanks for the TV, but we don't have time to watch it. Please take it home, it misses you." I'm up for any and all other suggestions.
While your sign is funny, it isn't likely to be effective. In California the screen tax pays for TV recycling (https://www.cdtfa.ca.gov/taxes-and-fees/electronic_waste_recycling_fee.htm). Often you can find a non-profit that collects TV's for recycling getting a bit of the screen tax for each one. To collect the fee the non-profit needs the donor's name and address - I think there is a limit to the number of TV's each resident can dispose of each year under the program (to prevent importing used TVs from out-of-state for profit) but that shouldn't be a problem for a mustachian.
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Never thought about buying in flood areas....seems like a pretty good idea where you can get good ROI and resale value. Where else has some high returns like what is going on here? I am in Orlando and the market is crazy. Property values have sky rocketed and I can't find any good deals like I used to. Looking to expand into new territories now!
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@Dicey That's too bad Dicey but I know you're not the only one. It would be an interesting play to setup a gopro to track the neighbor's contributions, ha.
@tcnjay I should qualify that when I'm purchasing a flooded house, it must meet the following requirements:
1) Only flooded during Harvey
2) Not in a FEMA flood zone (X zone)
3) My insurance provider will underwrite affordable flood insurance, just in-case (premium for property #1 is $300/annual - cheap peace of mind).
There are plenty flooded properties that are in good school districts that you can buy for cheap - but they flooded 3x in the last two decades and will surely flood again. So you have to be careful.
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We got an e-waste recycling notice at our other house. We loaded the TV up in the truck and brought it home. It's currently loafing on the curb between a dead printer and a dead microwave, both of which resisted multiple attempts to repair, boo-hiss. By tomorrow, it will be like it never happened.
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Update
Property 1: Floors, trim, doors, kitchen, bathroom complete, except for a couple of hookups. Stairs were more expensive and more labor than estimated but came out great. I decided to build them all out, stain them as close as I could to the laminate vs installing the laminate and having corner joints (that didn't match exactly) all the way up.
Interior house should be complete by this weekend except for the replacement of the rear doors. Exterior paint to start next week.
Some before/after progress photos shown below:
(https://farm2.staticflickr.com/1801/29647160288_0231d6ed4c_o.png) (https://flic.kr/p/MaPrS1)Screen Shot 2018-07-19 at 7.47.11 PM (https://flic.kr/p/MaPrS1) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/856/29647160418_3860f025be_o.png) (https://flic.kr/p/MaPrUf)Screen Shot 2018-07-19 at 7.45.45 PM (https://flic.kr/p/MaPrUf) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/842/43471003772_db7b85ca6f_o.png) (https://flic.kr/p/29eofV3)Screen Shot 2018-07-19 at 7.44.23 PM (https://flic.kr/p/29eofV3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/834/29647160608_0740e3fab1_o.png) (https://flic.kr/p/MaPrXw)Screen Shot 2018-07-19 at 7.43.04 PM (https://flic.kr/p/MaPrXw) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1804/43471004002_3187a9d48c_o.png) (https://flic.kr/p/29eofZ1)Screen Shot 2018-07-19 at 7.42.11 PM (https://flic.kr/p/29eofZ1) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/925/43518324701_3730e72281_o.png) (https://flic.kr/p/29iyMM8)Screen Shot 2018-07-19 at 7.49.43 PM (https://flic.kr/p/29iyMM8) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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How much did it cost you to re-do those stairs?
Just curious as we're planning on getting rid of some carpet and laying down wood floors in our main living room and doing the stairs at the same time, so that there would be no carpet except upstairs.
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@patchyfacialhair Sure thing, see below...
Stair Tread 14 ea *$30 = $420 product link: https://www.lowes.com/pd/RetroTread-11-5-in-x-42-in-Raw-Red-Oak-Stair-Tread/1000445871
Stair Risers 14 ea *$10 = $140 product link: https://www.lowes.com/pd/RetroRiser-7-5-in-x-42-in-Primed-Poplar-Stair-Riser/4363477
Staining sherwin williams 1ea *$40 = $40 (no product link, this was a custom mix by Sherwin Williams to match the laminate - we just brought in a piece of scrap as a sample for the match)
Labor to cut to fit, stain and install = $500
All-in $1100
Not a difficult DYI and my labor was a little high but that's what I paid. It looks good and I'm happy with the price - about $800 more than just laying the standard laminate and using a nose cap to bridge the tread to the riser but this looks far better.
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Love the staircase. Hadn't seen those products before. Adding them to my database.
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Much less expensive than I expected. Thanks!
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Thanks @Another Reader & @patchyfacialhair
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Traveling the globe, poker pros and real estate.
I'm back on assignment in Mexico now after two weeks in the states, babysitting the rehabs, looking at more deals, meeting with bankers and flying up to Chicago for a couple of days to hangout with a few cool folks.
Matt and Craig. I first started communicating with Matt in 2014 via an online poker forum where I had posted about what I was doing in the real estate investing world. It turned out that Matt had sprung into real estate about the same time as I had and was buying in the same city in Ohio. He was looking for some new property management and I passed him onto my guy.
Matt's story is very interesting to me as he was an online poker pro in the late 2000s, building his capital up and then eventually diversifying that capital into cashflowing, less variance instruments such as real estate.
Craig has a similar story, from Australia originally, playing online poker and building a substantial bankroll and then diversifying this into real estate. Matt put his friend Craig in touch with me for similar reasons - he was looking for a new project manager to help get a couple rehabs over the line and then get some new property management lined up. I got him going with a couple of my guys and we stayed in touch over the years via e-mail, pinging questions off each other, sharing success stories and less-than-successful stories.
These guys, along with their poker peers, were my introduction to the concept of a location independent lifestyle. This was about a decade ago, before the location independent lifestyle as we know it today existed and they left me inspired. These guys in their early to late 20's would have wild summers in Budapest, long stays in Buenos Aires, stints in Southeast Asia and of course trips back stateside to make key sports games, spring training in Scottsdale and the occasional hometown buddy's wedding. The really smart ones would diversify into other assets and grow a more sustainable business, maintaining a lifestyle freedom that was dream worthy to most.
Another key strength that I came to know and admire was their understanding and coping with risk. Being a professional poker player, understanding and most importantly accepting the risk of each play while maintaining emotional stability and focus on the data that produced their edge. Not jumping ship or going on tilt during hardships/losses and likewise suppressing the natural feeling of euphoria during massive wins - this is not natural and is an incredibly difficult skill to develop.
They've transferred these skills effortlessly into their real estate business and when I finally got to meet them face to face for coffee a couple of weeks ago, I was blown away with their organization, breakdown of priorities, market specificity and drive to take down big deals and find and/or create value where others couldn't.
Matt has fully retired from online poker and is focused on real estate and of course travel. Craig still plays but on a reduced schedule, also focused more on real estate and also, of course, travel. Both partner together on taking down small multi-family value add deals in Chicago along with a few single family flips, focused on deals that smaller investors can't reach or see and that the larger investors overlook.
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Update
Property 1: Interior is essentially complete. Made a couple of HVAC repairs and I need to install new rear and side entry french doors - these are backordered due to demand from Harvey. About two weeks out, so we're probably looking at mid-August for being done-done. Kicked off the refinance process this week and it's going smoothly so far. This is my first time using any sort of bank financing and I'm a bit apprehensive as I prepare for this financial colonoscopy.
Exterior paint started and finished this week. I picked out the paint while I was stateside, used the sample on the side of the house and was confident with my choice. The concept was a deeper blue with white trim.
A bit of stress set in as the paint started going on - the blue was quite a bit darker and before the white trim was done, the house looked dark and drab. Fortunately, as the trim was painted, the colors came together and I'm reasonable satisfied with the outcome.
If I could do it all over again, I'd probably go a shade or two lighter. All-in, this was about a $4.5k scope growth.
Photos below.
The original before and concept, side by side
(https://farm1.staticflickr.com/861/41885328650_b1335118f1_c.jpg) (https://flic.kr/p/26PgfWN)Exterior Paint Concept (https://flic.kr/p/26PgfWN) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Picking the paint
(https://farm1.staticflickr.com/936/41885328960_6f02b9e173_c.jpg) (https://flic.kr/p/26Pgg39)IMG_7570 (https://flic.kr/p/26Pgg39) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Testing out the sample
(https://farm1.staticflickr.com/855/41885328840_f1df7f9d05_z.jpg) (https://flic.kr/p/26Pgg15)IMG_7623 (https://flic.kr/p/26Pgg15) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Cleaning prep begins
(https://farm1.staticflickr.com/855/41885328200_cca7926cc0_c.jpg) (https://flic.kr/p/26PgfP3)Paint in Process (https://flic.kr/p/26PgfP3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
And about here I began to sweat a bit, the product looking a lot darker when applied en masse
(https://farm1.staticflickr.com/859/43646598352_a7b187984e_c.jpg) (https://flic.kr/p/29uUe4N)Paint in Process 2 (https://flic.kr/p/29uUe4N) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/932/43646598072_7bf026b8f0_c.jpg) (https://flic.kr/p/29uUdYY)Paint in Process 4 (https://flic.kr/p/29uUdYY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
I had some white trim photoshopped and felt a little better. Photoshop photos shown below
(https://farm1.staticflickr.com/932/43646599562_d4a6cc5910_c.jpg) (https://flic.kr/p/29uUeqE)Edited Photo Pro 2 (https://flic.kr/p/29uUeqE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/853/43646599322_2a594202f9_c.jpg) (https://flic.kr/p/29uUemw)Edited Photo Pro (https://flic.kr/p/29uUemw) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
And finally the end product - not bad. Gotta love the bouncy ball that was left in the shot.
(https://farm1.staticflickr.com/853/43646598522_1207843399_c.jpg) (https://flic.kr/p/29uUe7J)Paint Final 4 (https://flic.kr/p/29uUe7J) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/931/41885328540_0b25ef094d_c.jpg) (https://flic.kr/p/26PgfUU)Paint Final 3 (https://flic.kr/p/26PgfUU) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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I like the color.yourtrim isn't as wide as the inspiration picture but it looks nice.
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I like the color.yourtrim isn't as wide as the inspiration picture but it looks nice.
Also, your concept photo had more trim painted (corners of building in addition to window frames). I agree that the blue is a bit darker than I would want, but I highly doubt that will have any influence on the potential renters.
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Thanks @MayDay & @robartsd for the feedback. I've accepted the exterior paint as it is. I got a little emotional as this is the highest end home I've done and I was really pleased with how well the interior came together, only to drop the ball on the exterior and have it come out not as planned. But it's alright - it's a solid improvement over the existing condition.
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Update
Property #2
Interior demo is complete, interior paint started. I will be going with granite in the kitchen but only repainting the existing cabinets.
(https://farm1.staticflickr.com/937/42003182460_6562005672_b.jpg) (https://flic.kr/p/26ZFhM3)000d700b4aaa1109edbc064204d3ffe9efcada2e-1 (https://flic.kr/p/26ZFhM3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/939/42003182390_e9f39eefd2_b.jpg) (https://flic.kr/p/26ZFhKQ)ac2086a0741dd6d9827abc491d90fa26029d4bdb-1 (https://flic.kr/p/26ZFhKQ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm1.staticflickr.com/855/43763483392_ff116130ff_b.jpg) (https://flic.kr/p/29FehV7)987a57bc99249bc844ff65bebc4436fc8a953c93-1 (https://flic.kr/p/29FehV7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Not a whole lot of other changes so far. Estimates finalized and updated below showing the actual estimate vs the first pass along with a couple bits of scope growth.
Estimate Update
Paint interior all-in @ 4000 actual $3350 - labor came in a little lower, was able to use some leftover ceiling paint from the Property #1.
Flooring Install all-in @ 5000 actual $4400 - went with some lower priced laminate and was able to use some leftover bathroom flooring from Property #1.
Floor Baseboard all-in @ 1700 actual $1205 - labor was a little cheaper, also some materials leftover from Property #1.
Kitchen Cabinets + Countertop all-in @ 7000 actual $3200 - leaving existing cabinets in place, installing granite, new sink, new hardware.
Kitchen Sink/Faucet all-in @ 300 actual $200 - sink included above, new faucet remaining.
Bathroom Rehab x2 Cosmetic all-in @ 3200 actual $3200 - no change.
New Lighting Interior/Exterior all-in @ 3000 actual $1500 - overestimated this one.
Exterior Paint all-in @ 4000 actual $3500 - overestimated this one a bit, also using some materials leftover from Property #1.
Misc all-in @ 10000 actual $6000 - I've applied some of this to the below scope that was added.
Demo of wall/opening up the living to kitchen area, reinforcing overhead beam, all-in @ $1200
Removal of popcorn ceilings, drywall repairs throughout house all-in @ $1500
Exterior repairs, rebuild of storage area all-in $4500
New Fridge all-in $800
Dumpster rental all-in $700
Project Coordinator all-in @ 1800
TOTAL @ 40,000 actual $37,055
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Thanks @MayDay & @robartsd for the feedback. I've accepted the exterior paint as it is. I got a little emotional as this is the highest end home I've done and I was really pleased with how well the interior came together, only to drop the ball on the exterior and have it come out not as planned. But it's alright - it's a solid improvement over the existing condition.
Tenants care less than buyers. When it's time to sell, you can repaint.
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You're right, thanks @Another Reader
Update
Property #1 Just doing the finishing touches, fireplace going in this week. French door replacement pushed out again, going to swap to sliding doors and hope to finish by 31-Aug. Appraisal scheduled for next Tuesday, 14-Aug.
Property #2 Interior paint complete, kitchen paint on-going. Exterior repairs and paint to kick off next week as well as interior flooring.
Refi loan approved for property #2 today, which is awesome. Appraisal will be scheduled a couple weeks out as the rehab completes.
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Sammybiker, great thread!
As a newbie, it's exciting to see real examples. Good luck in all 5 properties.
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Love the thread @sammybiker. Following with interest.
Can you explain more about the refi on property #2? Apologies if I missed it somewhere. I am totally ignorant about this -- just surprised that you would refinance only a month into it?
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Thanks @BicycleB
Thanks @Trifele - on the refinance, it's a process and starting it now is good timing to be cashed out in another 6 weeks or so. Property 2 is a pretty light rehab overall and should be finished in time to have an appraisal done at the end of August.
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Property #1 Update
Appraisal came back yesterday at $98/sq ft. I was really looking for $100-103 but I'm satisfied. There were a number of uncompleted items (glass repair upstairs, x5 door replacement downstairs) that I think dragged it down a couple of bucks and I made the decision not to reschedule the appraisal in effort to get my funds back and go tackle more properties. I should have the refi funds in my account in two weeks.
I'm all-in at $62/sq ft. $98-$62 = $36/sq ft *2329 sq ft = $83.8k in equity and most definitely a home run.
The pro photographer is working as I type this and I hope to provide the final, final photos early next week along with an update on Property #2 and hopefully a third property under contract.
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Property #1 Update
Pro photos came back a little earlier than expected - shown below:
(https://farm2.staticflickr.com/1840/44121535571_336a376944_o.png) (https://flic.kr/p/2adSpmx)Screen Shot 2018-08-18 at 7.13.10 PM (https://flic.kr/p/2adSpmx) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1888/43214750835_c3f0de7aa5_o.png) (https://flic.kr/p/28QJTQX)Screen Shot 2018-08-18 at 7.13.23 PM (https://flic.kr/p/28QJTQX) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1886/29183819507_0ac6c69c26_o.png) (https://flic.kr/p/LsSGMR)Screen Shot 2018-08-18 at 7.13.30 PM (https://flic.kr/p/LsSGMR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1832/29183808567_ff69d13ba1_o.png) (https://flic.kr/p/LsSDxe)Screen Shot 2018-08-18 at 7.42.08 PM (https://flic.kr/p/LsSDxe) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1871/44072632502_d4e7176744_o.png) (https://flic.kr/p/2a9xLbb)Screen Shot 2018-08-18 at 7.41.59 PM (https://flic.kr/p/2a9xLbb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1871/44072630922_f92cbaa6ed_o.png) (https://flic.kr/p/2a9xKGW)Screen Shot 2018-08-18 at 7.42.16 PM (https://flic.kr/p/2a9xKGW) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1875/44072638972_3d8569e36f_o.png) (https://flic.kr/p/2a9xN6J)Screen Shot 2018-08-18 at 7.40.11 PM (https://flic.kr/p/2a9xN6J) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1859/29183817677_38909dd148_o.png) (https://flic.kr/p/LsSGfi)Screen Shot 2018-08-18 at 7.39.49 PM (https://flic.kr/p/LsSGfi) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1899/44072639522_84c181557e_o.png) (https://flic.kr/p/2a9xNgd)Screen Shot 2018-08-18 at 7.40.00 PM (https://flic.kr/p/2a9xNgd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1856/29183816227_65d2372e19_o.png) (https://flic.kr/p/LsSFPi)Screen Shot 2018-08-18 at 7.40.20 PM (https://flic.kr/p/LsSFPi) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1838/44072637842_5255283b74_o.png) (https://flic.kr/p/2a9xMLf)Screen Shot 2018-08-18 at 7.40.32 PM (https://flic.kr/p/2a9xMLf) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1900/44072637142_ef3fb0a136_o.png) (https://flic.kr/p/2a9xMyb)Screen Shot 2018-08-18 at 7.40.41 PM (https://flic.kr/p/2a9xMyb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1831/29183814487_edf99924a4_o.png) (https://flic.kr/p/LsSFii)Screen Shot 2018-08-18 at 7.40.53 PM (https://flic.kr/p/LsSFii) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1859/44072635912_935fe06608_o.png) (https://flic.kr/p/2a9xMbY)Screen Shot 2018-08-18 at 7.41.13 PM (https://flic.kr/p/2a9xMbY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1843/44072634502_4688a3d740_o.png) (https://flic.kr/p/2a9xLLE)Screen Shot 2018-08-18 at 7.41.33 PM (https://flic.kr/p/2a9xLLE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1851/29183810987_c53ab6b4bb_o.png) (https://flic.kr/p/LsSEfX)Screen Shot 2018-08-18 at 7.41.40 PM (https://flic.kr/p/LsSEfX) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1876/44072636402_f64a3fa1f8_o.png) (https://flic.kr/p/2a9xMkq)Screen Shot 2018-08-18 at 7.41.04 PM (https://flic.kr/p/2a9xMkq) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1818/29183818107_098535e87e_o.png) (https://flic.kr/p/LsSGnH)Screen Shot 2018-08-18 at 7.13.51 PM (https://flic.kr/p/LsSGnH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1874/44072640182_da92a6e9f7_o.png) (https://flic.kr/p/2a9xNsA)Screen Shot 2018-08-18 at 7.39.21 PM (https://flic.kr/p/2a9xNsA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1869/44072641042_6bfce6b3ef_o.png) (https://flic.kr/p/2a9xNHq)Screen Shot 2018-08-18 at 7.13.38 PM (https://flic.kr/p/2a9xNHq) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1855/29183810477_69558bc6a0_o.png) (https://flic.kr/p/LsSE7a)Screen Shot 2018-08-18 at 7.41.51 PM (https://flic.kr/p/LsSE7a) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Good thread. Really appreciate all the details.
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I would probably add some more kitchen lighting. It would be hard to cook with the lighting you currently have. Otherwise, it looks great!
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Thanks for the feedback @GreenEggs & @Another Reader
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No exhaust hood over the stove, either. A lot of grease will settle on the nearby surfaces if that is not fixed.
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Okay, if we're getting into the weeds, I'll second the other suggestions and add the bypass closet doors need pulls and OMG that single bathroom vanity is way too small. At the very least, install some kind of shelving in there. Overall, it looks excellent!
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Good observations @Another Reader & @Dicey
I hear you on the exhaust hood. Wasn't sure on that one but obviously omitted in the end to reduce scope. I have a small make ready list for the property management crew and I'll have them price out install.
Good call on the closet pulls, I overlooked that, Dicey.
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Looks great! If we're nitpicking, I agree on some undercabinet LEDs for the kitchen as well as a backsplash and exhaust fan for the stove. Also, some photoshop brightening- some rooms look darker than I bet they do in person.
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Noted @tralfamadorian thanks for your feedback.
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Property #2 Update
Floors are in, just wrapping up some trim, transitions and other bits and pieces. I'm pretty satisfied with them at the .55c/sq ft price point.
Bathroom rehab to be completed this week.
Exterior repairs and paint slipped a bit, revised to start next week, appraisal to be scheduled for early September.
(https://farm2.staticflickr.com/1882/44115726852_c53d696726_c.jpg) (https://flic.kr/p/2admCCd)c86f7f586d8b681a609adffeabc2180d24dae1a3-1 (https://flic.kr/p/2admCCd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1876/29226395287_4e99327d63_c.jpg) (https://flic.kr/p/LwCV62)d650065bf040ae72007054f0f6543d4dc7ff8ffe-1 (https://flic.kr/p/LwCV62) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1847/44115726702_05c1f86c4a_c.jpg) (https://flic.kr/p/2admCzC)cb134c145b18fde4661d9a1396c2b44c471b6c93-1 (https://flic.kr/p/2admCzC) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1869/44115726942_2602e87253_c.jpg) (https://flic.kr/p/2admCDL)ab47cf7fc3dd347ba584da8305adc9e52cca9004-1 (https://flic.kr/p/2admCDL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1831/44115727132_737aff6a38_c.jpg) (https://flic.kr/p/2admCH3)75fe26bd5039ced9cb261328cbbbb87cb80b52a9-1 (https://flic.kr/p/2admCH3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1834/44115727322_45de21332a_c.jpg) (https://flic.kr/p/2admCLj)8c012ab7606bd52e55a0c70bfced8f53b114ddb7-1 (https://flic.kr/p/2admCLj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1835/44115727382_686ed5acc4_c.jpg) (https://flic.kr/p/2admCMm)4b1f22d5b1c2c4b8a8ccd7b65f84f0613504a047-1 (https://flic.kr/p/2admCMm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1880/29226396537_ae1998e890_c.jpg) (https://flic.kr/p/LwCVsz)3e83b95ef33227ce6131f9ffda0ee506cf58cccf-1 (https://flic.kr/p/LwCVsz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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I think the place looks terrific.
I doubt it would make any difference for a rental, but if you were selling I'd recommend pressure washing the driveway.
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.55c/ft flooring??? Tell me more. Please. I love this stuff for our rentals, but we can rarely find it this cheap.
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Thanks @GreenEggs
@Stachetastic See the below link - it's cheap but I had to pick it up myself when I was in town a few weeks ago. If you have to ship it, you'll end up paying about .75c/sq ft all-in.
I also find Lumber Liquidators to have decent stuff in the .55-.70c range but I liked the darker tones on this stuff from Floor and Decor.
I would say the quality is slightly less than the homedepot trafficmaster stuff, which is my benchmark for low-cost lamanite and runs .85c+
https://www.flooranddecor.com/laminate-laminate/phoenix-hickory-2-strip-laminate-100500685.html#start=2
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Thanks @GreenEggs
@Stachetastic See the below link - it's cheap but I had to pick it up myself when I was in town a few weeks ago. If you have to ship it, you'll end up paying about .75c/sq ft all-in.
I also find Lumber Liquidators to have decent stuff in the .55-.70c range but I liked the darker tones on this stuff from Floor and Decor.
I would say the quality is slightly less than the homedepot trafficmaster stuff, which is my benchmark for low-cost lamanite and runs .85c+
https://www.flooranddecor.com/laminate-laminate/phoenix-hickory-2-strip-laminate-100500685.html#start=2
Thanks! I'm not familiar with this store, but I see there's one a little less than an hour from me. I'll be sure to keep it in mind the next time I'm in the market for flooring. (Which may be soon, as we've currently got our eye on another property.)
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@Stachetastic Sounds good, an hour away isn't bad at all. Good luck!
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I'm excited to post that property #3 is now under contract.
Property #3
Purchase Price: $44.5k
Estimated Rehab: $60k
Estimated After Repair Value: $137k ($98 sq ft)
Estimated Monthly Rent: $1500
Source: MLS
Funding: Purchasing cash via line of credit, private money
Schedule: Unknown
This is another flood house just around the corner from Property #1. That's great news as it's in a super desirable neighborhood and I already have the comps. The bad news is that it's been sitting since Harvey, never being demo'd, dried out and made sure the house was clean.
I haven't been able to get my contractor inside the property yet but he was able to do a walk around yesterday. Below are my initial estimates for rehab and I'll get to see how those shake out vs reality in the coming days as we get access to the property and can do a detailed scope of work.
Demo of all drywall (walls and ceilings) @ $5000
Drying, treating and obtaining a mold free certificate @ $5000
Insulation, Drywall & Paint @ $15000
Floor & Trim @ $5000
Kitchen @ $5000
Bathrooms @ $5000
HVAC & Possible Ducting @ $5000
Garage Door @ $3000
Appliances @ $2000
Dumpster @ $2000
Unknowns @ $8000
Total @ $60000
Listing photos suck but it's all I have now.
(https://farm2.staticflickr.com/1843/29237727127_0011249ebb_c.jpg) (https://flic.kr/p/LxCZDz)c896ddc2ae1fc4f0203bf7469668f0a1l-m0xd-w1020_h770_q80 (https://flic.kr/p/LxCZDz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1899/43457103684_b51d43b906_c.jpg) (https://flic.kr/p/29da1Um)P1124UY-2 (https://flic.kr/p/29da1Um) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1846/43457103634_bd6cef604c_c.jpg) (https://flic.kr/p/29da1Tu)P1124UY-3 (https://flic.kr/p/29da1Tu) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1852/43457103584_50cdcd8d15_c.jpg) (https://flic.kr/p/29da1SC)P1124UY-4 (https://flic.kr/p/29da1SC) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1880/43457103534_b06495992e_c.jpg) (https://flic.kr/p/29da1RL)P1124UY-5 (https://flic.kr/p/29da1RL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1878/43457103494_041d5bd841_c.jpg) (https://flic.kr/p/29da1R5)P1124UY-6 (https://flic.kr/p/29da1R5) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Congrats, @sammybiker! Good luck with this one.
You sure seem to have identified an area with good ratio of rent to purchase price, plus a niche for finding properties. Very admirable.
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Thanks @BicycleB
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Property #1 Update
Refi closing is today. It will be my first time using an online notary, so we'll see how this goes. Hopefully all goes smoothly and I won't have to make any flights for closing. Texas has some odd restrictions, I suppose dating back to backlash post-80s savings and loan debacle.
Keys will be picked-up by the property manager today.
Property #2
Bathrooms and exterior paint in process but currently paused due to rain all this week. Hope to get back on it early next week. Trying to get the appraisal scheduled for next Friday, 7-Sept.
Knock on wood, budget is very intact with this property. The joys of a non-flood, light cosmetic rehab.
Some progress photos shown below:
(https://farm2.staticflickr.com/1900/44344653151_c6c035c072_c.jpg) (https://flic.kr/p/2ayzWrn)f14454127b43eede47aca8b2001ee2d9d3e23b27-1 (https://flic.kr/p/2ayzWrn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1862/29408818407_8483991644_c.jpg) (https://flic.kr/p/LNKT8e)13d577c3171f12f7940d612819e794b48a58f845-1 (https://flic.kr/p/LNKT8e) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1867/44344653301_bfebb3f891_c.jpg) (https://flic.kr/p/2ayzWtX)bc0eb22d5d5ce2688e2eaee053e7a033b7a7645b-1 (https://flic.kr/p/2ayzWtX) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1890/29408818647_a4ab5e21c7_c.jpg) (https://flic.kr/p/LNKTcn)1cd5b5cec6a6118f2b33e9de13b8bcfa3e70c4b3-1 (https://flic.kr/p/LNKTcn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1888/29408818777_60e4f487d8_c.jpg) (https://flic.kr/p/LNKTeB)67d4a3b3c51ab0c9da59919f2d6c98af30e416ff-1 (https://flic.kr/p/LNKTeB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1900/44344653151_c6c035c072_c.jpg) (https://flic.kr/p/2ayzWrn)f14454127b43eede47aca8b2001ee2d9d3e23b27-1 (https://flic.kr/p/2ayzWrn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1895/29408819027_2cc87e90bb_c.jpg) (https://flic.kr/p/LNKTiV)5204cd30479eeb0110ea2256bf7958b07dc6535e-1 (https://flic.kr/p/LNKTiV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1889/44344653841_f7ebe68477_c.jpg) (https://flic.kr/p/2ayzWDg)55ea8ca16480a2ce88434d3b0115e239b631dcdc-1 (https://flic.kr/p/2ayzWDg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1860/44296531982_f7e7748d90_c.jpg) (https://flic.kr/p/2aukiG3)a1bf42c5905365a8b9887ae23d0aaf43b0c72212-1 (https://flic.kr/p/2aukiG3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #3
Worked out a scope and estimate with my contractor - looking at about $26k, labor only, to get it demo'd mold free, insulated, drywalled, painted, floored, baseboards, door trim, doors hung, bathrooms done. I'm pretty happy with that.
I've bumped the all-in budget up to $70k, which is pretty conservative and includes a little higher end finishes, taking some lessons learned from Property #1. I may be able to come in less but I want to keep a lot of meat on this one due to the unknowns of getting a property dried out and mold free.
This property is in an A+ area so I'm OK trading less equity (maybe making $25-30k) for a good cashflow house.
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Nice update! #2 looks great.
I used an online notary last month for non-RE reasons and it was very quick and easy. Hope your experience is the same.
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OK, thanks @tralfamadorian glad to hear it was pretty painless.
I'll know here in a couple of hours :D
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Update
Property #1: Property management has possession now, completing a couple little things here and there and we'll be getting a tenant placed.
Online notary was a fail as the title company refused online notary at the last minute. I'm flying into Washington State this weekend for another line of credit notary and will do both of them at the same time while escaping this Mexico heat for a couple of days. I'm definitely looking forward to completing this first refi.
Property #2: Granite installed and backsplash on-going. Exterior paint complete.
Found a leak in the kitchen that requires some wall demo to get access. Working through that now and will understand the full impact later tomorrow. ALSO, had the HVAC go down. It's not an old unit so I'm confident we can get it squared-up. A few parts on order, should be squared away by this weekend.
With the backsplash, plumbing and HVAC issues, budget with bust a little but nothing bad.
Planning to have final professional photos done this weekend. Appraisal is next Wednesday. I'll schedule the close date around late-Oct when I'll be back in Texas for a few days.
Property #3: No real update, spoke with the title office this morning, still working to get the title paperwork completed, looks like closing should be later this month. I'm totally OK with that as I'm nearly out of funds, hence the flight to Washington State this weekend to ensure the refi and line of credit happen.
Property 2 progress photos below
(https://farm2.staticflickr.com/1879/29661577897_de4463c502_c.jpg) (https://flic.kr/p/Mc6kHt)fe3acd79bb5c2f301bf455113ee935c9f66d7a2e-1 (https://flic.kr/p/Mc6kHt) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1899/44549360732_e57e96fd3d_c.jpg) (https://flic.kr/p/2aSF7Sq)2e7ded638493094224d8618cc029dbdd507ed0bf-1 (https://flic.kr/p/2aSF7Sq) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1881/30728716468_0115028f3a_c.jpg) (https://flic.kr/p/NPoGQm)ebbfb334a53b9114f1095cf917520460afa55622-1 (https://flic.kr/p/NPoGQm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1872/30728717028_f87b30f236_c.jpg) (https://flic.kr/p/NPoH11)8963e5186bdfb029d25f5a225869be19d16444e2-1 (https://flic.kr/p/NPoH11) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1862/43689893935_b5ecc83de4_c.jpg) (https://flic.kr/p/29yJ8kn)826d41466a123d5db85ec3ca92d3579f47eda1f7-1 (https://flic.kr/p/29yJ8kn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1875/43689895145_15c682c7f0_c.jpg) (https://flic.kr/p/29yJ8Ge)6c45ed2942729c321da9f3e88e151242f265028f-1 (https://flic.kr/p/29yJ8Ge) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1894/43689895855_75f912084e_c.jpg) (https://flic.kr/p/29yJ8Ut)0ed1d9083704fdcd7339bd37b8ce22c825e6db88-1 (https://flic.kr/p/29yJ8Ut) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1878/43689894355_aeca200355_c.jpg) (https://flic.kr/p/29yJ8sB)43c7b8d5b4aec5d1272087a8d1c117c890bce2a3-1 (https://flic.kr/p/29yJ8sB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1885/43689893135_edf68bbb9d_c.jpg) (https://flic.kr/p/29yJ86z)a551da9bb006500322e5fb3ee2e9b18fee79e332-1 (https://flic.kr/p/29yJ86z) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1875/44549404462_e2e68eb3b5_c.jpg) (https://flic.kr/p/2aSFkSo)f7d8445d90f324af10d92306b2b8c2db0e97d115-1 (https://flic.kr/p/2aSFkSo) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1850/44599403991_f24f5bea49_c.jpg) (https://flic.kr/p/2aX6AZe)46567955f387b3cf8846d7ca4aed30fb3ca79a6d-1 (https://flic.kr/p/2aX6AZe) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1856/44599404061_bfa1e277b8_c.jpg) (https://flic.kr/p/2aX6B1r)18614e0fec046371792f29857bb323555594f6c5-1 (https://flic.kr/p/2aX6B1r) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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dude, you're crushing it. Thanks for sharing all of this.
I actually do something very similar.
I live in Colorado but invest in TN. Have project manager on the ground to manage the rehabs, then rent them out and refinance.
Let's connect sometime!
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My advice is to clean and paint the inside of the cabinets and put in a nice cook top. No one is going to want to cook on the old one. It lowers the appeal of the entire kitchen. Depending on the condition of the microwave, I might replace it as well. All new gleaming stainless is going to get people to open their wallets.
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Damn, @Another Reader - the truth hurts.
I'll look into it - thanks for the feedback.
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Update
Property #1
Goes on the rental market next week. Refi is complete and funds dispersed to my account. Woo.
Property #2
Plumbing fix completed and the HVAC was a simple fix, both not exceeding $1000 combined, eating up the remaining misc budget.
Photo update below, appraisal is tomorrow, rehab completed, total rehab costs @ $33,405, all-in with purchase @ $120,905. I'm looking for the appraisal to come out at $157,000. We'll find out the results next week and I'll probably fly back to Houston to close this the following weekend.
@Another Reader I had the cleaners give the stove top a good scrub and it looks slightly better. That said, property management will likely replace it ($250) along with the microwave ($200) when they take it over next week. We also added a vent hood in Property #1, as I think you recommended.
Property #3
I flew to Washington State last weekend to have this closing notarized (along with property #1 closing notarized and another line of credit notarized). Paperwork received by the title office yesterday, funds wired yesterday, closing is officially today and we should have keys this evening/tomorrow. Once keys are in hand, my contractor will commence demo on Saturday.
Property #4
A good investor friend shot me a note over the weekend that he had a property in my area that he'd wholesale. I looked up the address, we worked out a price and he went back to the seller. Monday came along and we're under contract. Rough details below with some initial photos.
2300 sq ft, purchase price $115k. Rehab estimate ~$40k-ish. Haven't been able to walk through and the pictures look rough - no flooding but heavy cosmetic w/indoor smokers. That said, it's in a great location, great schools and after repair value will be around about $200k. As always, I'll try and get aggressive on that budget and see if I can shave off a bit here and there. Probably won't close on this until mid-Oct.
Photo updates below, enjoy.
Property #2 Photo Updates
(https://farm2.staticflickr.com/1941/44089194844_749d6736a8_b.jpg) (https://flic.kr/p/2ab1DzN)P1122186 (https://flic.kr/p/2ab1DzN) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1965/44089196034_d43aaf809a_b.jpg) (https://flic.kr/p/2ab1DWj)P1122187 (https://flic.kr/p/2ab1DWj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1888/44089195794_9fd6facf10_b.jpg) (https://flic.kr/p/2ab1DSb)P1122188 (https://flic.kr/p/2ab1DSb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1861/44808905341_95e8363096_b.jpg) (https://flic.kr/p/2bgBmrt)P1122189 (https://flic.kr/p/2bgBmrt) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1972/44089195534_dc9a9c4670_b.jpg) (https://flic.kr/p/2ab1DMG)P1122190 (https://flic.kr/p/2ab1DMG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1883/44089195264_b1056361d5_b.jpg) (https://flic.kr/p/2ab1DH3)P1122191 (https://flic.kr/p/2ab1DH3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1898/44808905211_669b8ef3ae_b.jpg) (https://flic.kr/p/2bgBmpe)P1122192 (https://flic.kr/p/2bgBmpe) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1980/44089195204_1b3a9e7eae_b.jpg) (https://flic.kr/p/2ab1DG1)P1122193 (https://flic.kr/p/2ab1DG1) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1844/44808905111_1d7200e1f3_b.jpg) (https://flic.kr/p/2bgBmnv)P1122195 (https://flic.kr/p/2bgBmnv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1888/44089195094_df70ddd4ef_b.jpg) (https://flic.kr/p/2ab1DE7)P1122196 (https://flic.kr/p/2ab1DE7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1953/44089194514_e8da0dd7af_b.jpg) (https://flic.kr/p/2ab1Du7)P1122197 (https://flic.kr/p/2ab1Du7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1878/44089195014_e408004b5f_b.jpg) (https://flic.kr/p/2ab1DCJ)P1122198 (https://flic.kr/p/2ab1DCJ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1904/44808904941_29fea133c7_b.jpg) (https://flic.kr/p/2bgBmjz)P1122199 (https://flic.kr/p/2bgBmjz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1861/43898801525_8497f16c1d_b.jpg) (https://flic.kr/p/29TbQhn)P1122201 (https://flic.kr/p/29TbQhn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #4 Photos
(https://farm2.staticflickr.com/1843/30937606878_126353edcc_b.jpg) (https://flic.kr/p/P8RjF9)P1122156 (https://flic.kr/p/P8RjF9) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1861/42997682160_b8c06ebbd8_b.jpg) (https://flic.kr/p/28vymTA)P1122167 (https://flic.kr/p/28vymTA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1853/42997683040_7b59601131_b.jpg) (https://flic.kr/p/28vyn9L)P1122166 (https://flic.kr/p/28vyn9L) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1893/42997682790_b7a6d3f51c_b.jpg) (https://flic.kr/p/28vyn5s)P1122168 (https://flic.kr/p/28vyn5s) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1888/42997682100_c510d8f353_b.jpg) (https://flic.kr/p/28vymSy)P1122169 (https://flic.kr/p/28vymSy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1890/42997682570_972b633843_b.jpg) (https://flic.kr/p/28vyn1E)P1122171 (https://flic.kr/p/28vyn1E) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1856/42997682070_6854f7fa69_b.jpg) (https://flic.kr/p/28vymS3)P1122172 (https://flic.kr/p/28vymS3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1938/42997682530_fce72e60be_b.jpg) (https://flic.kr/p/28vymZY)P1122173 (https://flic.kr/p/28vymZY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1864/30937605268_5aab425bf9_b.jpg) (https://flic.kr/p/P8Rjco)P1122174 (https://flic.kr/p/P8Rjco) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1884/42997682510_693430890a_b.jpg) (https://flic.kr/p/28vymZC)P1122176 (https://flic.kr/p/28vymZC) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1878/30937605148_d75fd427a7_b.jpg) (https://flic.kr/p/P8Rjaj)P1122177 (https://flic.kr/p/P8Rjaj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1843/42997682460_974dcb6f4b_b.jpg) (https://flic.kr/p/28vymYL)P1122178 (https://flic.kr/p/28vymYL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1846/30937605098_b8a8cc6b08_b.jpg) (https://flic.kr/p/P8Rj9s)P1122179 (https://flic.kr/p/P8Rj9s) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1842/30937605818_3a35abfbd7_b.jpg) (https://flic.kr/p/P8RjmS)P1122180 (https://flic.kr/p/P8RjmS) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1876/30937605048_cb9a6426f2_b.jpg) (https://flic.kr/p/P8Rj8A)P1122181 (https://flic.kr/p/P8Rj8A) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1847/30937605738_92c2eccfea_b.jpg) (https://flic.kr/p/P8Rjku)P1122182 (https://flic.kr/p/P8Rjku) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1859/42997681880_ee89c1a6bb_b.jpg) (https://flic.kr/p/28vymNL)P1122183 (https://flic.kr/p/28vymNL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1872/30937605628_120279def7_b.jpg) (https://flic.kr/p/P8RjiA)P1122184 (https://flic.kr/p/P8RjiA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1900/30937604898_9a596006a7_b.jpg) (https://flic.kr/p/P8Rj61)P1122185 (https://flic.kr/p/P8Rj61) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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#2 looks awesome @sammybiker !
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When you are a landlord, the market will tell you what is and is not acceptable. If you get objections about things like appliances either directly or indirectly from a lack of applications from qualified tenants, my experience has been it is the financially wise choice to replace whatever is causing the objections. Investing a few more dollars up front to nab the better tenant generally pays off over time.
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Thanks for your feedback @Another Reader & @tralfamadorian
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You got your work cut out for you on Property #4... A lot of rotten stuff behind the tub enclosures for starters.
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Yeah, you're right @Another Reader - they are nasty.
I'm going go full gut on those bathrooms, no other choice really. The good news is that they both are pretty decent size and will show well once done up.
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Update
Property #2 Appraisal came back this afternoon @ $131k. I was expecting $157k and am pretty disappointed. On the phone with my banker, he's also surprised, which is good. It's such a gross delta for the area, it doesn't make sense.
I have a call with the appraiser in about an hour and we'll see where we get but I've already requested another appraisal be ordered.
I had an after repair appraisal performed before purchase to confirm my comps - $157k right on the dot.
Property #3
Demo has commenced.
(https://farm2.staticflickr.com/1926/29956740167_531749d4b8_b.jpg) (https://flic.kr/p/MDb8b8)ebb145ced030ef6567510752e198a1a99f410f3e-1 (https://flic.kr/p/MDb8b8) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1971/43981223565_61ecb80742_b.jpg) (https://flic.kr/p/2a1tgu2)de26bf5a396908dd99d74c7986f81980cd11838a-1 (https://flic.kr/p/2a1tgu2) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1905/29956740697_467df0bb9f_b.jpg) (https://flic.kr/p/MDb8kg)cfabe136bf95d55771cf698fb7751fddd44edd97-1 (https://flic.kr/p/MDb8kg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1940/29956741127_db232edcc5_b.jpg) (https://flic.kr/p/MDb8sF)8951ee96f03a31b22834bb9aa8f9389ef405a574-1 (https://flic.kr/p/MDb8sF) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1933/43981224525_76594ecf91_b.jpg) (https://flic.kr/p/2a1tgLz)6bafe2da23ed4063a8d0a09e7f3ad422cbf6d00e-1 (https://flic.kr/p/2a1tgLz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1938/29956741417_e1a30dccc6_b.jpg) (https://flic.kr/p/MDb8xF)2a2f3740a415b9acd4741d116a3e95341c65505a-1 (https://flic.kr/p/MDb8xF) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Judging from the pictures, the smell of mold has to be a problem...
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I don't follow?
Judging from the pictures, the smell of mold has to be a problem...
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The insulation looks like it has been wet and there may have been mold in it and possibly on the framing. Am I wrong?
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The insulation looks like it has been wet and there may have been mold in it and possibly on the framing. Am I wrong?
We just took all the drywall down in a flip house. Some of the blown-in insulation was a pretty pink but most of it was grey, just like this stuff. Smart DH said the pink is fiberglass and the grey is cellulose. How the grey stuff got there is kind of interesting. The previous owner bought all new double pane windows (for an exorbitant price). The window company added the cellulose insulation for "free". She then raved about how much quieter the house was and how much her utility bills dropped. DH says the window company was smart to add the cellulose insulation, which was probably more responsible for the positive changes the homeowner noticed than the very overpriced windows, which BTW had nothing but shims under the trim. No foam, no nothing. Asshats.
As to the insulation, I now have 65 bags of it on our back porch, waiting for it to get cool enough to install it in our attic. We were going to give it away, but we figured it wouldn't hurt to add it to ours. I was the one who donned the Tyvek suit and masked up to collect it and then transported it home about a dozen bags at a time in the full heat of summer, so I'm all in for using it for our own benefit.
I can't tell if SammyB has a mold issue or not, just that grey doesn't automatically mean mold or moisture. I defer to AR's experience and wisdom. However for Sammy's sake, I do sincerely hope there is no mold.
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@Another Reader I read your comment re: mold smell on house #3 to have something to do with the low appraisal #2 - sorry, misread on my part.
Yes, house #3 has mold. We're going to start drying it out today and have the pre-remediation inspection with the company that will ultimately issue the remediation certificate before we can move forward with drywall, etc. Should be interesting but I'm hoping to be dried out and certified mold free in about two weeks.
@Dicey That's funny (and smart) about the window company. Speaking of, I need to add some blow-in insulation in the attic to my budget.
But yes, there most definitely is mold. The family evacuated the house during Harvey in Aug-2017, the house took on 2-3ft of water and it just sat and manifested for 12 months.
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The insulation looks like it has been wet and there may have been mold in it and possibly on the framing. Am I wrong?
We just took all the drywall down in a flip house. Some of the blown-in insulation was a pretty pink but most of it was grey, just like this stuff. Smart DH said the pink is fiberglass and the grey is cellulose. How the grey stuff got there is kind of interesting. The previous owner bought all new double pane windows (for an exorbitant price). The window company added the cellulose insulation for "free". She then raved about how much quieter the house was and how much her utility bills dropped. DH says the window company was smart to add the cellulose insulation, which was probably more responsible for the positive changes the homeowner noticed than the very overpriced windows, which BTW had nothing but shims under the trim. No foam, no nothing. Asshats.
As to the insulation, I now have 65 bags of it on our back porch, waiting for it to get cool enough to install it in our attic. We were going to give it away, but we figured it wouldn't hurt to add it to ours. I was the one who donned the Tyvek suit and masked up to collect it and then transported it home about a dozen bags at a time in the full heat of summer, so I'm all in for using it for our own benefit.
I can't tell if SammyB has a mold issue or not, just that grey doesn't automatically mean mold or moisture. I defer to AR's experience and wisdom. However for Sammy's sake, I do sincerely hope there is no mold.
It may depend on the age of the house, but in California, all I see is fiberglass. In Arizona, all I see in older houses is cellulose. Having seen wet cellulose where there have been plumbing leaks, I figured that was a problem in this house.
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Update
Property #2 New appraisal came back at $163k. My target was $157k, so I'm happy and relieved to hear this.
The bank is putting together the closing docs now and I'll sign the papers when I'm back in Texas in October.
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It may depend on the age of the house, but in California, all I see is fiberglass. In Arizona, all I see in older houses is cellulose. Having seen wet cellulose where there have been plumbing leaks, I figured that was a problem in this house.
I think age of the house is likely a bigger factor than regional differences between Arizona and California. I've seen plenty of blown in cellulose in older California houses too.
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Update
Property #3 Demo is complete, now have (4) large fans going and (2) dehumidifiers to dry the place out.
Had the mold-inspector perform a pre-treatment inspection, review the cleaning procedure with my contractor and take initial samples.
Hope to have the cleaning process completed towards the end of this week and we'll have the mold inspector come back out, take post-remediation samples and then, pending good results, we'll have our mold free cert and can proceed with drywall.
Some early budget increases that I've applied some of the $8k misc budget to:
- HVAC. I should have known but due to the state of the property, all of the ducting had to be demo'd along with the inside unit. Outside compressor should be fine. +$2k
- Dumpsters - I budgeted for 2 but we'll need three. +$700
(https://farm2.staticflickr.com/1923/44274022824_4e342e2fc4_o.jpg) (https://flic.kr/p/2askWv7)e886609e496ae512e157e3d5f1039a14b01523a6-1 (https://flic.kr/p/2askWv7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1928/44274023004_d5c1963e00_c.jpg) (https://flic.kr/p/2askWyd)e7b937ffb971f6cde30e15c81c7ec844958777aa-1 (https://flic.kr/p/2askWyd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1944/43181353600_fa6b5b74e2.jpg) (https://flic.kr/p/28MMJ1y)cfaddd9acb0d8b0e4bf548f2d7349bb4da3e176a-1 (https://flic.kr/p/28MMJ1y) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1928/43181353890_611296f73f_c.jpg) (https://flic.kr/p/28MMJ6y)bfc63f3a9af402f9cdfab5e229ca1b2c453f0ba4-1 (https://flic.kr/p/28MMJ6y) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1965/44274023324_11ca1a5e7a_o.jpg) (https://flic.kr/p/2askWDJ)183676041a4fba8959a975a898e805f603a16215-1 (https://flic.kr/p/2askWDJ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1915/30056944237_b477a9f696_o.jpg) (https://flic.kr/p/MN2Gmv)68958c0958f50b3a6651466cf3590c16b86f9228-1 (https://flic.kr/p/MN2Gmv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1951/44274023614_874328d179_c.jpg) (https://flic.kr/p/2askWJJ)501f6703891c216e3bfbec9f8f65bafdadbd10c4-1 (https://flic.kr/p/2askWJJ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1937/30056944547_204bded0b0_o.jpg) (https://flic.kr/p/MN2GrR)0482a5e7a3263acd939f3d888da31c8fc5b1ae55-1 (https://flic.kr/p/MN2GrR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #2 On the rental market now.
Property #3 Mold remediation is complete and the property is dried out. The big day is tomorrow when the mold inspector goes through the property, takes samples and certifies the house as mold free. We'll then be able to kick-off the drywall.
Electrical has been updating boxes, some wiring and running some new wiring to support additional recessed lighting in the kitchen.
Some additional budget growth with electrical, exterior repairs and some cosmetic scope decisions of my own.
Flooring, paint, baseboard is ordered, should be arriving late next week. I'm pretty excited for the concept here, sticking with the same cathedral gray walls of property #2, white ceiling & baseboard but coupled with a wide plank, light gray laminate flooring that should pair well.
But first...we need to get our mold free certificate. We'll see what tomorrow brings.
Property #4 No real updates, the wholesaler is having some issues contacting the seller, which isn't uncommon. Maybe they got a call from another wholesaler and think they can get a better offer. We'll see. Still under contract but if the seller disappears, not much I can do.
Meanwhile, I'm continuing to make offers.
Property #3 Progress Photos Below
(https://farm2.staticflickr.com/1955/44384390924_5f93f4cb9a_c.jpg) (https://flic.kr/p/2aC6B6o)43088526_262694747716335_4245265857141276672_n (https://flic.kr/p/2aC6B6o) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1906/44384390734_6ddc7a89db_c.jpg) (https://flic.kr/p/2aC6B37)43130233_805905579584574_5241026309294915584_n (https://flic.kr/p/2aC6B37) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1924/44384391144_0c5fbc7653_c.jpg) (https://flic.kr/p/2aC6Bab)43056079_468085080355435_1206581945534775296_n (https://flic.kr/p/2aC6Bab) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1952/44384391084_80186a4762_c.jpg) (https://flic.kr/p/2aC6B99)43062083_244860416375926_8133296396393512960_n (https://flic.kr/p/2aC6B99) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1971/30167021437_c32ac38cc8_c.jpg) (https://flic.kr/p/MXKStg)43012731_186351515508798_4001361579298783232_n (https://flic.kr/p/MXKStg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1930/44384390944_17a03e3574_c.jpg) (https://flic.kr/p/2aC6B6J)43078585_255626491763535_2139248670980177920_n (https://flic.kr/p/2aC6B6J) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Looking good @sammybiker ! How is #1 doing out there on the rental market?
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@tralfamadorian A lot of interest, screening now, should have someone locked in next week.
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Great! Are rents lining up where you expected?
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@tralfamadorian Yes. I was shooting for $1800 for property #1 and that's what I listed it at. Another house in the same neighborhood just went up for rent yesterday, 200 sq ft smaller and with a smaller and less attractive backyard. I think the market would support $2,000 for my house and I'll actively bump rents next year to get closer to that figure.
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Update
Property #1 Rented at $1800/mo
Property #2 On the rental market for $1650/mo - trying to send a few folks that were interested in property #1 but didn't get their deposit in fast enough over to property #2.
Property #3 Mold remediation completed last week and samples were taken last Friday. I received the results back this week and we were given the all clear.
HVAC installation was completed as well as installation of a new garage door.
Drywall started today, paint and underlayment is waiting at Home Depot for pick-up and the flooring gets delivered early next week.
Property #3 Progress Photos Below
(https://farm2.staticflickr.com/1930/43461575600_b7862117a2_c.jpg) (https://flic.kr/p/29dxWfm)47c8f066f9c972cac1f5c6da7d9cc6e4f1185a29-1 (https://flic.kr/p/29dxWfm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1951/31401594938_ddf132de9b_c.jpg) (https://flic.kr/p/PQRoah)46f1ce11cdba0ab683050ad359086ec8fc08b8a6-1 (https://flic.kr/p/PQRoah) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1920/31401595018_93bc74fe5c_c.jpg) (https://flic.kr/p/PQRobE)5bc4d7fc7711e5c9b0055e72744d18271d92f5da-1 (https://flic.kr/p/PQRobE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1960/31401594818_fe4fbe2975_c.jpg) (https://flic.kr/p/PQRo8d)69728500b3712d877b20aa1ad172039a7cd9b021-1 (https://flic.kr/p/PQRo8d) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #1 Rented at $1800/mo
Woo hoo!
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We're under contract for our first rental property, a duplex in Michigan. We don't have as grand of plans as you (or the money or confidence) but are eagerly following your journey and learning a lot. Thanks for sharing; appreciate all the details and numbers!
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Thanks @tralfamadorian it feels good to have the first one rented and cashflowing.
Thanks @Laurel and congrats on your duplex. Michigan is a strong rental market and can provide some great cashflow opportunities and fast track you to FIRE, if you're so inclined. A large portion of my portfolio is not too far away from you, in the greater Toledo area.
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Update
Property #1 Rented at $1800/mo
Property #2 On the rental market for $1650/mo.
Property #3 Drywall moving at warp speed, these guys are fast. Kitchen will be ordered this weekend, flooring should be delivered tomorrow or Friday. Added a few more light cans in the living room, minor scope growth there. Everything else is moving along.
Loan documents submitted on Monday for the refi of this home. I submitted an updated personal financial statement but my banker called me back and said no need, they'll use my PFS from three months ago (although I told him I've taken on more debt) as well as my prior credit report. Painless and easy, gotta love commercial lending.
Continuing to make offers every week on other properties but nothing has stuck yet. But when it rains, it pours, so I'll remain patient.
Property #3 Progress Photos Below
(https://farm2.staticflickr.com/1910/45394575551_c52cc105fa_c.jpg) (https://flic.kr/p/2can4MH)6437b5862d171253864f56d88185c9e93bb13eec-1 (https://flic.kr/p/2can4MH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1979/45394575331_f4f6a8c75d_c.jpg) (https://flic.kr/p/2can4HV)7f0b30bf5eef350c83547047ae77812674509f43-1 (https://flic.kr/p/2can4HV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1920/45394575221_0fe55a52fe_c.jpg) (https://flic.kr/p/2can4G2)7ae138338559331a8ab1a52336d5ca0a090ec44d-1 (https://flic.kr/p/2can4G2) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1937/45394575051_e9a6dabd8f_c.jpg) (https://flic.kr/p/2can4D6)dc8ae732f267b5220019444a7e487741bb689a79-1 (https://flic.kr/p/2can4D6) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1942/45394575091_7fafb43edf_c.jpg) (https://flic.kr/p/2can4DM)c2a186263c12f5c524f5ebeefc3f5b461d353723-1 (https://flic.kr/p/2can4DM) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Looking really good. You are filling a need to rebuild the government can't.
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Thanks @Another Reader - the feel good factor is definitely real, bringing a neighborhood back up to speed.
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A summary update of this challenge thus far - I'll try and post this every few weeks as additional properties get through the appraisal and rental process to provide a clean and quick update.
Property #1 Equity Earned: $83,000 Monthly Cashflow: $250
Property #2 Equity Earned: $42,000 Monthly Cashflow: $375
Property #3 Equity Earned (forecast $30,000) Monthly Cashflow (forecast $350)
Property #4 Not under contract
Property #5 Not under contract
Equity Earned vs Goal (including forecast): $155,000/$200,000
Monthly Cashflow Earned vs Goal (including forecast): $975/$1625
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Update
Property #1 Rented at $1800/mo
Property #2 On the rental market for $1650/mo, applications under review. Hope to have a deposit by next week.
Property #3 Drywall texture on-going today, should be ready to start interior paint Monday. Floors arrived Tuesday, still working through kitchen layout and pricing but should be good to pull the trigger this weekend w/tentative kitchen install starting in 10-12 days. Exterior repairs completed, exterior paint to start next week, just waiting to get into town this Sunday to pick a few colors out for exterior trim.
I was really close to getting #4 under contract this week but not quite there, only $2k away on price...on paper, it looked great but being that it was located on a less desirable street/corner of town (of the good part of town), close to several multi-family properties...couldn't justify it. The search continues.
Property #3 Progress Photos Below
(https://farm2.staticflickr.com/1928/44641986775_6935909e8c_c.jpg) (https://flic.kr/p/2b1RRna)44753644_112376213007282_7492261987615768576_n (https://flic.kr/p/2b1RRna) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1902/44641986715_da39d5829a_b.jpg) (https://flic.kr/p/2b1RRm8)44759921_2452453908114526_8632597481403711488_n (https://flic.kr/p/2b1RRm8) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1975/44831062384_c92bd3b78d_c.jpg) (https://flic.kr/p/2biyUXs)2a124439d3554645d4282c73c8beed2ce2ee8f5b-1 (https://flic.kr/p/2biyUXs) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1945/44831062014_29a8929d4b_c.jpg) (https://flic.kr/p/2biyUR5)bd255990e6e6687de07eb576049727cf0dffc758-1 (https://flic.kr/p/2biyUR5) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1915/44831062244_20113c2540_c.jpg) (https://flic.kr/p/2biyUV3)90eca47397fefe67a267eb09e73420c5025e009b-1 (https://flic.kr/p/2biyUV3) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1946/44831062284_2ac8dc6ab5_c.jpg) (https://flic.kr/p/2biyUVJ)54f6f6391cb8b8901aca6255d63b34b5a9e8725c-1 (https://flic.kr/p/2biyUVJ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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@sammybiker, just wanted to say that I am really enjoying this thread! Keep the updates coming, and keep up the good work. Thanks.
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Thanks @frost7777
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I love the thread too, @sammybiker. I've learned a ton -- thank you.
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Piling on- these threads are 1000x better for a new investor than the guru crap that we often see newbies come around asking about. @sammybiker is awesome!
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Thanks @Trifele & @tralfamadorian I really appreciate that.
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Update
Property #1 Rented at $1800/mo
Property #2 Application & deposit received (rented at $1595, not $1650 as posted earlier - my mistake).
Property #3 Interior paint completed, electrician coming back on Saturday to add a few more light cans, install plugs/switches/covers and relocate the oven hook-up (my fault, oops). Flooring will start Monday morning in the kitchen and the kitchen cabinet install should start Tuesday.
The struggle continues with locking down property #4 &5...pretty close on (3) properties as of this morning, just have to see how they shake out. Really hoping to close on at least one before I leave Texas again in another 10 days.
Property #3 Progress Photos Below
(https://farm2.staticflickr.com/1945/31795541338_9b0cbe0b6f_z.jpg) (https://flic.kr/p/QrEsGA)Screen Shot 2018-11-01 at 11.56.05 AM (https://flic.kr/p/QrEsGA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1942/30727318227_3d7d2746e4_z.jpg) (https://flic.kr/p/NPgxbK)Screen Shot 2018-11-01 at 11.55.20 AM (https://flic.kr/p/NPgxbK) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1978/45617398772_86750d7ed2_z.jpg) (https://flic.kr/p/2cv46no)Screen Shot 2018-11-01 at 11.55.12 AM (https://flic.kr/p/2cv46no) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1957/45617398812_e3c66f2e77_q.jpg) (https://flic.kr/p/2cv46o5)Screen Shot 2018-11-01 at 11.54.57 AM (https://flic.kr/p/2cv46o5) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1922/45617403752_03c9222610_z.jpg) (https://flic.kr/p/2cv47Rf)Screen Shot 2018-11-01 at 11.55.47 AM (https://flic.kr/p/2cv47Rf) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1927/31795541468_48dd1924b7_z.jpg) (https://flic.kr/p/QrEsJQ)Screen Shot 2018-11-01 at 11.55.40 AM (https://flic.kr/p/QrEsJQ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Main flooring is nearly complete, bathroom tile starts tomorrow. Kitchen starts Wednesday. New exterior doors are on-site. No other major scope growth. Neighbors have been coming up and greeting me over the last week, all very excited for what we're doing. Progress photos below.
Property #4 Woooo! Finally got #4 under contract, trying like hell to close by the end of this week before I fly out. The contract is with the title office and they are expediting. If not this Friday, next week. It's already been demo'd and dried out, which is great - both my contractor and I are very happy not to have to deal with that process again like we did on property #3. Rough numbers and photos below:
Purchase Price: $76k
Estimated Rehab: $65k
Estimated After Repair Value: $236k ($107 sq ft)
Estimated Monthly Rent: $2000
Source: MLS
Funding: Purchasing cash via personal funds
Schedule: 4 weeks (start date approx. 15-Nov)
Property #3 Progress Photos Below
(https://farm5.staticflickr.com/4854/31869641638_2445afcfd5_z.jpg) (https://flic.kr/p/Qydf8Y)Screen Shot 2018-11-05 at 3.10.36 PM (https://flic.kr/p/Qydf8Y) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1965/30800886907_9cca9ce1c0_z.jpg) (https://flic.kr/p/NVLAAg)Screen Shot 2018-11-05 at 3.10.48 PM (https://flic.kr/p/NVLAAg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm2.staticflickr.com/1970/31869641428_215fa2c034_q.jpg) (https://flic.kr/p/Qydf5m)Screen Shot 2018-11-05 at 3.10.55 PM (https://flic.kr/p/Qydf5m) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4826/30800886767_c374576064.jpg) (https://flic.kr/p/NVLAxR)Screen Shot 2018-11-05 at 3.11.01 PM (https://flic.kr/p/NVLAxR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4804/31869641158_05edc14f56.jpg) (https://flic.kr/p/QydeZG)Screen Shot 2018-11-05 at 3.11.08 PM (https://flic.kr/p/QydeZG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4899/45741209171_fc54916f92.jpg) (https://flic.kr/p/2cFZDTr)Screen Shot 2018-11-05 at 3.11.15 PM (https://flic.kr/p/2cFZDTr) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #4 Below
(https://farm5.staticflickr.com/4883/45741280571_558336d10a.jpg) (https://flic.kr/p/2cG127t)Screen Shot 2018-11-05 at 6.41.35 PM (https://flic.kr/p/2cG127t) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4875/45690920242_92b3d762ed.jpg) (https://flic.kr/p/2cBxUJW)Screen Shot 2018-11-05 at 6.41.43 PM (https://flic.kr/p/2cBxUJW) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4904/45741280431_ae957e7d0a.jpg) (https://flic.kr/p/2cG1254)Screen Shot 2018-11-05 at 6.41.53 PM (https://flic.kr/p/2cG1254) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4827/45690920112_a3f03544b6.jpg) (https://flic.kr/p/2cBxUGG)Screen Shot 2018-11-05 at 6.42.02 PM (https://flic.kr/p/2cBxUGG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4842/45741280161_bec14fcfe2.jpg) (https://flic.kr/p/2cG11Zp)Screen Shot 2018-11-05 at 6.45.56 PM (https://flic.kr/p/2cG11Zp) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4851/45690919762_d061ace473.jpg) (https://flic.kr/p/2cBxUAE)Screen Shot 2018-11-05 at 6.46.04 PM (https://flic.kr/p/2cBxUAE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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That interior gray in Property #3 is too dark for me. You may want to lighten it up on the next house. Other than that, looks good!
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Thanks @Another Reader - it's funny you say that, I've been thinking the same thing and am shopping around for a shade or two lighter. It's not as dark as the pictures show (poor lighting) but I think it will come together better a shade or two lighter, as you pointed out.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Just wrapping up the finishing touches with baseboard paint, door knobs, etc. Both the fridge and the master double vanity were delayed 2 weeks, to be received and installed mid next week. I hope to have this turned over to property management by the end of next week.
Property #4 Closed last Friday but things slowed down since then. Still working to lock down the HVAC quote and ran into a little drama pricing out a total electrical rewire of the house - bid came back at $18,000 (lol). I went with a new electrician that was well referred as this was going to be a little bigger job than just installing new plugs and dropping a few light cans in. We were about 10-12k apart on price...so back to shopping around.
Fortunately, my local BP group has a couple of moonlighter electricians and they are out today to assemble the bid. Back-up plan is another investor's electrician from Houston - talking full rewire, 30+ light cans, plugs, everything for around $8k.
We'll see what happens with that. Insulation and drywall should start late next week, just waiting for the garage door to be installed so that we can safely store materials. The garage door width needs to be modified, so we're working on framing that up come Monday.
A little slower start than I had hoped but once we sort the electrical, the rest of the house will go quickly.
Property #5 Property #5 is now under contract. This 2400 sq ft cape cod is a time capsule, very similar to Property #2 but in better condition. I'm working to close it by the end of the year but this is the first property that I'll be performing financing on the front end for, so we'll have to see how that goes. I'm leasing it back to the owner until May 2019 prior to starting rehab.
Purchase Price: $150k
Estimated Rehab: $30k
Estimated After Repair Value: $252k ($105 sq ft)
Estimated Monthly Rent: $2000
Source: Off-market
Funding: Financing w/local credit union.
Schedule: Unknown.
Property #3 Progress Photos Below
(https://farm5.staticflickr.com/4874/32053870588_d0f4cb7dfc_z.jpg) (https://flic.kr/p/QQusZb)46373917_316893989131081_3335186777022398464_n (https://flic.kr/p/QQusZb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4899/45012656085_12c0fa1330_z.jpg) (https://flic.kr/p/2bzBCrk)46426422_256301258400298_3964151232481722368_n (https://flic.kr/p/2bzBCrk) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4885/45924889461_b4e61a5154_z.jpg) (https://flic.kr/p/2cYe4CZ)46495287_689396998098744_3325478381406912512_n (https://flic.kr/p/2cYe4CZ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4842/45012655515_2a73fcdba6_z.jpg) (https://flic.kr/p/2bzBCgv)46511265_1298480400295084_80706034674434048_n (https://flic.kr/p/2bzBCgv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4845/32053870168_2ccd926f55_z.jpg) (https://flic.kr/p/QQusRW)46458022_726562567710433_728575609025855488_n (https://flic.kr/p/QQusRW) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4858/44108925270_8fcdbc127d_z.jpg) (https://flic.kr/p/2acKLKy)46361107_498876207298690_9097153062673317888_n (https://flic.kr/p/2acKLKy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4866/30986114517_4d1c290e62_z.jpg) (https://flic.kr/p/Pd8WiK)46434967_355310805032812_1754261451972804608_n (https://flic.kr/p/Pd8WiK) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4829/44108924980_28df38ff66_z.jpg) (https://flic.kr/p/2acKLEy)46404125_360358754734952_6625600418359541760_n (https://flic.kr/p/2acKLEy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4916/45924889301_45cfc98da8_z.jpg) (https://flic.kr/p/2cYe4Ae)46519917_278148646170005_88074570761764864_n (https://flic.kr/p/2cYe4Ae) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4840/45012656235_9d5d50e845_z.jpg) (https://flic.kr/p/2bzBCtV)46395644_2157568407827312_723412169277833216_n (https://flic.kr/p/2bzBCtV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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While I was out canvassing during the election, I saw a beautifully updated house. They had a similar facade. They had taken long wood slats, stained them and mounted them horizontally with regular spacing in between. It was so simple and packed a huge punch, totally updating the look of the house. I kind of remember where it was. I'll try to find it and post a picture in the next couple of days. IIRC, they treated the garage door the same way and it looked fabulous.
And I hear you on the electrician. Our current flip was 10k, and it was done by a fully certified colleague of DH's. We used 55 cans, and it's a two-story, 2k sf house. And we paid for the materials. Oof. And that was a "deal". Funny/not funny experience. We ran a little short of supplies. Went back to HD four days later, and all the wiring (Romex CAT5, etc.) had gone up in price by $5. Ugh.
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@Dicey That's a lot of cans! But that doesn't seem too awful at $10k (labor only). Was the house stripped to the studs/no drywall or they had to snake all the new wiring through the walls?
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@Dicey That's a lot of cans! But that doesn't seem too awful at $10k (labor only). Was the house stripped to the studs/no drywall or they had to snake all the new wiring through the walls?
Walls and ceilings lovingly stripped to the studs by DH and yours truly! This obviously makes things easier and certainly more efficient. Lol, our current clown home was custom built in 2006 (not for us, we bought it on a short sale). It has over 110 cans (2600sf), so 55 seems reasonable in comparison. They're all LEDs and most of them will be on dimmers.
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@Dicey Wow, now that's a LOT of cans!
New bid today for $11k...so we're working in the right direction but aren't there yet.
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Update
Property #5 Property #5 is now under contract.
Wow, 5 properties into the contract stage or beyond. You did not slow down. Wish I could contribute more, but very impressive to watch.
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@Dicey Wow, now that's a LOT of cans!
New bid today for $11k...so we're working in the right direction but aren't there yet.
I've told this story elsewhere, but... we didn't notice the crazy number of cans when we bought the house. When our first utility bill topped $450, we freaked the fuck out. We dashed out and bought the dimmable kind of LEDs 'cause, of course, they're mostly on dimmers. It cost over a thousand bucks! Naturally, within a year, LED prices had dropped like great big rocks, boulders even. Oh, well. The utility bills did go down, so it wasn't a loss, just a much bigger expense than we anticipated.
Now we buy the whole kit at Costco for a fraction of what we paid for the bulbs.
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PTF.
How did I miss such a great thread?
Doing a great job @sammybiker
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Thanks @Bicycle_B, those last couple of properties came quick.
@Dicey Yeah, the price drop on the LEDs the last few years has been incredible. Also, do you have a link to the Costco kit, please??
Also, new electrical bids came in at around $6k.
@CowboyAndIndian Thanks for the feedback!
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Don't have a link, I just buy them in the warehouse. It's the bulb and lens kit, you still have to buy the ugly metal box at HD or L for a new installation. What's nice about them is you don't see the inside of the housing from below. I found them for 4.99/2-pack this summer. They are on sale again now, IIRC, but it's not as screaming a deal, and I have all I need, so I didn't register the current deal in my memory bank. They're by Feit, so the quality is good.
Good job on the new bids!
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Finally done, except for a couple of HVAC grills. Property management now has possession as of this weekend, appraisal was completed yesterday, I'll know the results next week. Really swinging for $150k but I need my funds back asap so...I probably won't fight a low appraisal. Final photos below.
Property #4 New garage door installed, some additional drama with the electrical that I'll share later but it's going. Drywall start won't start for another 10ish days due to electrical delays. Progress photos below.
Property #5 Title paperwork is in process. Loan paperwork to be submitted next week. Then appraisal.
Property #6 I really didn't want another property but it was hard to turn down the equity capture with this one. I'll post more details later but the core numbers are below.
Purchase Price: $65k
Estimated Rehab: $40k
Estimated After Repair Value: $150K ($86 sq ft)
Estimated Monthly Rent: $1400
Source: MLS (Fannie Mae Foreclosure)
Funding: Financing w/local credit union.
Schedule: Unknown.
Initial photos shown below.
Property #3 Final Photos Below
(https://farm5.staticflickr.com/4887/46132230661_14f0e9623c_c.jpg) (https://flic.kr/p/2dhxJXg)Birch1 (https://flic.kr/p/2dhxJXg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4838/31193154637_6f879051ca_c.jpg) (https://flic.kr/p/Pwr57Z)Birch2 (https://flic.kr/p/Pwr57Z) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4882/46132230611_e5b2e58318_c.jpg) (https://flic.kr/p/2dhxJWp)Birch3 (https://flic.kr/p/2dhxJWp) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4864/31193154567_b0138c9d44_c.jpg) (https://flic.kr/p/Pwr56M)Birch4 (https://flic.kr/p/Pwr56M) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4817/46132230571_9d6c616a0f_c.jpg) (https://flic.kr/p/2dhxJVH)Birch5 (https://flic.kr/p/2dhxJVH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4899/31193154497_0b07f112e8_c.jpg) (https://flic.kr/p/Pwr55z)Birch6 (https://flic.kr/p/Pwr55z) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4903/46132230451_44b7417ba7_c.jpg) (https://flic.kr/p/2dhxJTD)Birch7 (https://flic.kr/p/2dhxJTD) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4907/31193154407_20de4bcd41_c.jpg) (https://flic.kr/p/Pwr542)Birch8 (https://flic.kr/p/Pwr542) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4874/46132230361_4ccc4a81f7_c.jpg) (https://flic.kr/p/2dhxJS6)Birch9 (https://flic.kr/p/2dhxJS6) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4871/31193154357_cc93834580_c.jpg) (https://flic.kr/p/Pwr53a)Birch10 (https://flic.kr/p/Pwr53a) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4818/46132230321_b99536ccf7_c.jpg) (https://flic.kr/p/2dhxJRp)Birch11 (https://flic.kr/p/2dhxJRp) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4915/31193154237_74ae7d0a0a_c.jpg) (https://flic.kr/p/Pwr516)Birch12 (https://flic.kr/p/Pwr516) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #4 Progress Photos Below
(https://farm5.staticflickr.com/4908/44317190590_d9c8f9ac6d_c.jpg) (https://flic.kr/p/2awabLW)93136cd60b73640e56555e8f8236d1f7c4729c95-2 (https://flic.kr/p/2awabLW) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4890/46133701041_3012da902d_c.jpg) (https://flic.kr/p/2dhFh3D)93136cd60b73640e56555e8f8236d1f7c4729c95-1 (https://flic.kr/p/2dhFh3D) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Initial Photos Below
(https://farm5.staticflickr.com/4876/45222398075_0793bc560a_c.jpg) (https://flic.kr/p/2bU9Bqx)ISibcc05k9gftq0000000000 (https://flic.kr/p/2bU9Bqx) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4898/45222398125_8504e0bb1a_c.jpg) (https://flic.kr/p/2bU9Brp)ISek492vqhaowt0000000000 (https://flic.kr/p/2bU9Brp) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4809/45222398195_f78d77092b_c.jpg) (https://flic.kr/p/2bU9BsB)ISadgujnysvuas0000000000 (https://flic.kr/p/2bU9BsB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4870/45222398155_b345fa5e51_c.jpg) (https://flic.kr/p/2bU9BrV)ISaptkiy5d52xt0000000000 (https://flic.kr/p/2bU9BrV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4851/45222398005_699f0dc202_c.jpg) (https://flic.kr/p/2bU9Bpk)ISqpkik079cpas0000000000 (https://flic.kr/p/2bU9Bpk) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4888/31194631057_98bb4c7db2_c.jpg) (https://flic.kr/p/PwyD1v)ISyrjlm4k2w4wt0000000000 (https://flic.kr/p/PwyD1v) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4894/31194631097_b47f99d37d_c.jpg) (https://flic.kr/p/PwyD2c)ISmu9u04m473bs0000000000 (https://flic.kr/p/PwyD2c) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4891/45222398035_e2ef51c45a_c.jpg) (https://flic.kr/p/2bU9BpR)ISibcwfi8kboxt0000000000 (https://flic.kr/p/2bU9BpR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #3 Appraisal came back today $165,000. I was all-in at $123k, capturing $42k in equity. I was shooting for $150,000 ($105/sq ft) and I'm obviously happy to see it come in at $115/sq ft. This project went quite a bit over budget due to a number of factors and I'll make a detailed post breaking down these cost overruns and lessons learned.
A summary update of this challenge thus far, including some forecast data points.
Property #1 Equity Earned: $83,000 Monthly Cashflow: $250
Property #2 Equity Earned: $42,000 Monthly Cashflow: $375
Property #3 Equity Earned: $42,000 Monthly Cashflow: $400
Property #4 Equity Earned: (forecast $92,000) Monthly Cashflow: (forecast $400)
Property #5 Equity Earned: (forecast $77,000) Monthly Cashflow: (forecast $400)
Property #6 Equity Earned: (forecast $40,000) Monthly Cashflow: (forecast $450)
Equity Earned vs Goal (including forecast): $376,000/$200,000
Monthly Cashflow Earned vs Goal (including forecast): $2275/$1625
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Thanks for the summary @sammybiker! Wow -- huge congrats on such a successful project. And done in 6 months. Just -- awe inspiring.
Thank you!
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Thanks @Trifele it's been a really fun ride and still a lot of work ahead of me to make those forecast numbers a reality.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Refi complete, funds disbursement today. On the rental market for $1700/mo as of this weekend.
Property #4 Electrical mostly complete, drywall started. Paint should start next week and flooring right after that. Progress photos below.
Property #5 Title paperwork clear. Bad news from my lender - his boss left the bank last month, new guy coming in is changing things up and going with a far more conservative approach. They've asked a whole lot more questions about me, my financials and this property. Still not yet approved but it's looking promising. However, after this one, I'm cut off from this credit union for about six months.
Too much, too quickly, for them. They are a very small bank and my cap was initially set at $1mm (I'm at $550k-ish after this next one). So onto engaging a new credit union.
Property #6 This one is turning into a pile of crap. Buying sight unseen is risky and my best hope is that out of 5 houses, I only get 1 really bad one and the 4 others make-up for it.
Finally got inside this one and we have two major roof leaks, errr....holes. Roof replacement was already captured in my scope of work but I need to now look at full flooring replacement as the original wood floors, which I hoped to use, are rotten in two of the bedrooms and the hallway. More drywall repair also required.
A couple pictures below that surprisingly weren't included in the listing. Estimate is still in process but I think I'll be closer to $50k on the rehab, all-in around $115k. Still making some good equity but not as much as intended and a whole lot more work involved.
Step one is to get a new roof on...pushing to get this going next week.
Property #7 Another deal that I couldn't pass up. From a local wholesaler and good friend. Great neighborhood in town, great schools. Mostly cosmetic - floors, paint, bathrooms and kitchen. Minor siding repairs.
Purchase Price: $82k
Estimated Rehab: $30k
Estimated After Repair Value: $153K ($93 sq ft)
Estimated Monthly Rent: $1600
Source: Wholesaler
Funding: Financing w/private lender then refi direct with local credit union.
Schedule: Start mid-Jan, finish early Feb.
Property #4 Progress Photos
(https://farm5.staticflickr.com/4902/46302101451_14da8734d7_c.jpg) (https://flic.kr/p/2dxynBZ)362b299a1d8a150c4a85e82918bf3da0473847a0-1 (https://flic.kr/p/2dxynBZ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4901/32430105288_2bcd183f57_c.jpg) (https://flic.kr/p/RpJLsm)05b592ccc6fe9296387651925e3e86523b00a8c9-1 (https://flic.kr/p/RpJLsm) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4915/32430105208_305da9aae8_c.jpg) (https://flic.kr/p/RpJLqY)af95c143ec0473cfa6e409eec60a49cff09402cc-1 (https://flic.kr/p/RpJLqY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4826/32430105198_caba749bcd_c.jpg) (https://flic.kr/p/RpJLqN)e07c2ea6a72994c484d362403d6955942afbfc37-1 (https://flic.kr/p/RpJLqN) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4853/46302101341_289d515393_c.jpg) (https://flic.kr/p/2dxynA6)fafc742870ef000f1dea0bed56567f44d8d135d5-1 (https://flic.kr/p/2dxynA6) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #5 Progress Photos
(https://farm5.staticflickr.com/4880/32430111398_a44c3f8b66_c.jpg) (https://flic.kr/p/RpJNgG)48218188_554726331620048_1440421255281901568_n (https://flic.kr/p/RpJNgG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4846/46302108781_e4399309d1_c.jpg) (https://flic.kr/p/2dxypNn)48064173_298441734110261_8369637812353368064_n (https://flic.kr/p/2dxypNn) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4838/32430111448_f656e07c79_c.jpg) (https://flic.kr/p/RpJNhy)47687918_2028102497282294_7733699773114351616_n (https://flic.kr/p/RpJNhy) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos Below
(https://farm5.staticflickr.com/4852/46252097792_bf313836fa_c.jpg) (https://flic.kr/p/2dt96gW)2 (https://flic.kr/p/2dt96gW) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4829/45389601685_4f6c4d4e04_c.jpg) (https://flic.kr/p/2c9Vzep)1 (https://flic.kr/p/2c9Vzep) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #7 Photos Below
(https://farm5.staticflickr.com/4832/46252031552_91692dc38d_z.jpg) (https://flic.kr/p/2dt8KzS)P1122912 (https://flic.kr/p/2dt8KzS) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4911/44485390550_3b9a3958f3_z.jpg) (https://flic.kr/p/2aM2fLf)P1122919 (https://flic.kr/p/2aM2fLf) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4894/44485390270_434d2bd135_z.jpg) (https://flic.kr/p/2aM2fFq)P1122925 (https://flic.kr/p/2aM2fFq) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4907/44485390380_5c14b86a8e_z.jpg) (https://flic.kr/p/2aM2fHj)P1122928 (https://flic.kr/p/2aM2fHj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Be careful you don't bite off more than you can chew, as Grandma used to say...
Figure out what (who) went wrong on Property 6 and don't let that happen again. Good luck with the credit union, and yeah, you need a back up lender.
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Thanks @Another Reader
#6 fault was certainly all mine. There just wasn't time to get an inspection before issuing an aggressive bid. I'm not super stressed about it as I knew there was enough margin going in if I missed some scope but just not ideal.
Back-up credit union are folks I established a relationship during July visits and I've kept them updated on my progress. The relationship is new but very promising and other investor friends in my circle have praised them highly (and offered the personal introduction back in July). But who knows until the ink is wet! We'll see.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 On the rental market for $1700/mo. Steady interest but it's a bad time of the year to find a tenant and this one may sit vacant for a few weeks as I want to screen carefully.
Property #4 Drywall complete, paint on-going, floors will start late next week. I'm working on the refi packet this week to get started with the new credit union.
Property #5 Finally got the loan approved yesterday, sigh. Appraisal to occur first week-ish of Jan. This will be my last loan with this credit union for the time being.
Property #6 The saga continues with this dog of a house. Roof replacement is complete but we had to replace a lot of rotted out framing in the process (see below pictures). Drywall repair, floor demo & paint to start first week of Jan.
I'm motivated to really make this one shine, given how rough it is and I'll need top comps to keep my equity margins.
Property #7 Closed last week using cash and the refi was approved yesterday with the new credit union, which is great. So probably 6-8 weeks out from getting my funds back on this one. Can't start until mid-Jan when the seller vacates.
Property #4 Progress Photos
(https://farm5.staticflickr.com/4915/45508198845_ace01e118d_c.jpg) (https://flic.kr/p/2ckpq32)11 (https://flic.kr/p/2ckpq32) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4899/45508198705_165d2431ba_c.jpg) (https://flic.kr/p/2ckppZB)22 (https://flic.kr/p/2ckppZB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4836/45697686074_ab69259238_c.jpg) (https://flic.kr/p/2cC9zZd)6cebecb2e8be20ab413334a54b5fef512a5a4a67-1 (https://flic.kr/p/2cC9zZd) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos Below
(https://farm8.staticflickr.com/7865/45697685694_a485499fdd_c.jpg) (https://flic.kr/p/2cC9zSE)R1 (https://flic.kr/p/2cC9zSE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4818/45697685794_c30c81f456_c.jpg) (https://flic.kr/p/2cC9zUo)65788795bf53febbe6d0e502d39b716e1f550624-1 (https://flic.kr/p/2cC9zUo) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4883/31481202697_9366987aaa_c.jpg) (https://flic.kr/p/PXToLR)d6e952bad1a62ee435f034a479f507c0969fd0c5-1 (https://flic.kr/p/PXToLR) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4820/45697685924_e75e2c4ebd_c.jpg) (https://flic.kr/p/2cC9zWC)ccf30cd197854823efb74c01d4cd4d2f20389b20-1 (https://flic.kr/p/2cC9zWC) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7920/31481202617_7506e5b88d_c.jpg) (https://flic.kr/p/PXToKt)ce9a2c3c2986ab55b8f3fa159fe8d37f7dc96767-1 (https://flic.kr/p/PXToKt) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7849/44605102090_fe1d89ed3c_c.jpg) (https://flic.kr/p/2aXANQj)fa1ecdd15cca2db90b9608ab99640b5737ad73cf-1 (https://flic.kr/p/2aXANQj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4918/45698844524_ef913d0b59_c.jpg) (https://flic.kr/p/2cCfwmu)7296de50bd92124b941eff13f4d0ee75208bfe58-1 (https://flic.kr/p/2cCfwmu) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Hi! Just gone down your rabbit hole via the "best threads of 2018" thread. I'm fascinated by what you are doing, and how different houses are in the USA to here in the UK, which your thread gives a very clear idea of.
I see that someone mentioned upthread the shade of grey paint you are using. The paint all looks fine to me, but I would caution against making your fixtures and fittings too grey - grey has been fashionable for a few years now but will fall out of favour sooner or later. Grey paint is easy to update, grey fixtures and fittings not so much.
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@former player thanks for the comment and thanks @Trifele for the favorite thread mention.
Agreed on keeping an eye on the overuse of grey. The last two houses that I'm trying to wrap up now will revert to a more classic look, which hopefully will fare better long term. It wasn't out of direct choice, the classic look was on sale - but all the same, something to note and monitor.
Thanks again for the feedback.
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Hi, good job. Doing reno long distance is very hard, I don't think I could trust anybody that much. But your explanation with poker risk makes sense.
A few questions:
so originally Property #2 On the rental market for $1650/mo, but it went for $1595/no, does it still make the originally planned Monthly Cashflow: $375?
How does laminate survives tenants? Especially in the bathrooms? I have seen hardwood in a few pictures, did you cover it with laminate?
Again, not my cap of tea, I cannot tolerate such a risk of having only $250/m cash flow (even $400 is too risky for me), or doing long distance rehab, but that's just me. But I can appreciate somebody else's risk tolerance.
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Thanks @ilsy
Yeah, the long distance thing rattles me some days even after five years of doing it. Unfortunately (or fortunately), with my career, I have no other choice.
I like that you picked up on the poker risk bit. Plus it gives me an excuse to play more of a game that I'm probably -ev in, ha.
I've used laminate in other rentals with reasonable results over a 3-4 year time period. I try to use vinyl or tile in bathrooms/kitchens but as you can see, I haven't always stuck to that. Hardwood is covered with laminate if I can't salvage it, yes. I don't think I've been able to salvage any hardwoods yet - 2 rooms are good but the hallway and master are beyond repair - might as well run brand new flooring throughout.
Good catch on the cashflow number for Property 2 w/less rent but same cashflow figure - I just recalculated it and I'm still seeing $375. During this time, my property management fee was dropped from 10% to 6% and I attribute maintaining the $375 figure to this drop.
Re: risk for $250/mo - I get it if you're going after one property. I don't get it if you're going after a portfolio of 5+ properties.
Your risk is distributed between several properties, most of which should work out and what's the risk? Worst case, I'll end up leaving $20,000 in a property and on $250/mo, you have a cash on cash return of 15%. On all of these, I've been able to get all of my money back out (and in some cases get $35K+ back on top).
And then you have the equity capture. Yes, equity comes and goes (although this market is historically stable - no huge swings in either direction, even during 08-12) but the numbers are still substantial and certainly make it worth the risk, to me. But I agree - if I was doing all this work for 0 equity and $250/mo, I probably wouldn't be doing it.
Either massive cashflow, massive equity (but no cashflow - I don't like this) or a mixture of both (the niche of this thread).
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Thanks for answering my questions, @sammybiker
One more for you: what insurance company you use for your rehabs? I think about switching mine, they were great a couple of years ago, but now they keep changing their rules. Don't know if there is anything better, but it's worth asking.
So, your worst case, is what? No rent for a few months, plus additional repairs? What's your exit strategy in your worst case? I usually have plan C, D, and E (very low risk tolerance, as I mentioned, at east for now). I know that a chance that on all 5 properties, you get no rent, is low, but what if? Do you sell? Do you insure for that?
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@ilsy I use USAA. It's not the cheapest but we have a relationship and they've always taken care of me.
I guess worst case, if I mismanaged my cashflow, blew reserves, had no available credit, no private lenders to float me, mismanaged rehabs and had a multiple eviction event all within the same 30-60-90 day time period, I would sell one of the properties and would be more than fine.
I don't insure for lost rent due to evictions but I do have lost rent coverage that is provided when an appropriate general home insurance claim is filed.
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Thanks @sammybiker. Again, nice job.
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Update
It’s been a crazy last few weeks, juggling some extensive business travel, a new project assignment with my W2 job, relocating from Mexico to NE Maine USA, while still making business trips back to Mexico.
I love the travel and being constantly on the go – proving that I can manage these rehabs while maintaining a heavy W2 work schedule, albeit not without mistakes, is a fun challenge.
I flew back to Texas for a couple days this weekend to check on the rehabs, understand an evolving (growing) scope of Property #6, pay contractors and catch up with some local investor friends.
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Still on the rental market for $1700/mo.
Property #4 Floors are in, kitchen is in, appliances are in. Finishing the bathrooms and cleaning the place up. Should be done-done in another two weeks. Working through the refi process now.
Property #5 Appraisal took place on Friday. Looking to close end of this month. Again, this house will be rented back to the owner until May and then I’ll take possession and start a light cosmetic rehab.
Property #6 The shit show continues with this one. After the roof was completed, I had to take down a couple of massive trees that were rotted out and were one windstorm away from coming down on the new roof. This cost $4.5k. Afterwards, as I obviously had a termite problem, I had remediation performed and during this, we started pulling back some drywall & siding to find multiple studs crumbling.
I haven’t completely nailed down the impact yet but I’m budgeting about $12k as we’ll be replacing at least some studs on every exterior wall that isn’t brick (the house is only ¼ brick).
Also, salvaging the old HVAC was a fail and I’ll run a completely new system for about $6.5k.
That said, we are moving forward with what we can. The rotted hardwoods have been demo’d out, house is dried out, and the mold has been removed. New flooring has been ordered and I’ve locked down the paint color. Granite quote came in well below estimates as I’m finally seeing some better pricing due to repeat business.
The action now is to finalize the scope growth numbers and get on the replacement of framing where required. Then treat for termites. Then insulation, drywall, exterior siding (where required), paint and floors.
Property #7 Seller was moving out this weekend, verified in person by myself. I took possession of the keys and my contractor will get in there Tuesday or Wednesday. Going to try hard to keep this rehab under $30k.
Property #4 Progress Photos
(https://farm8.staticflickr.com/7820/45721206105_96af53f772_c.jpg) (https://flic.kr/p/2cEe8EZ)update11 (https://flic.kr/p/2cEe8EZ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7820/31694616257_99e7973d69_c.jpg) (https://flic.kr/p/QhKcbZ)update12 (https://flic.kr/p/QhKcbZ) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4803/45721205625_67a124e022_c.jpg) (https://flic.kr/p/2cEe8wH)update13 (https://flic.kr/p/2cEe8wH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7836/45721205265_e0d58e1a24_c.jpg) (https://flic.kr/p/2cEe8qv)update15 (https://flic.kr/p/2cEe8qv) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7867/31694616137_dca3122bec_c.jpg) (https://flic.kr/p/QhKc9V)update14 (https://flic.kr/p/QhKc9V) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos
(https://farm5.staticflickr.com/4902/45721208925_840634426f_c.jpg) (https://flic.kr/p/2cEe9vB)update1 (https://flic.kr/p/2cEe9vB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7831/45721208535_416de9cd88_c.jpg) (https://flic.kr/p/2cEe9oT)update2 (https://flic.kr/p/2cEe9oT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4904/45721208205_4df40bfa31_c.jpg) (https://flic.kr/p/2cEe9ic)update3 (https://flic.kr/p/2cEe9ic) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7810/45721207935_56182708e8_c.jpg) (https://flic.kr/p/2cEe9dx)update4 (https://flic.kr/p/2cEe9dx) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7857/45721207635_9148ba0ec1_c.jpg) (https://flic.kr/p/2cEe98n)update5 (https://flic.kr/p/2cEe98n) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7841/45721207435_a3ba70d391_c.jpg) (https://flic.kr/p/2cEe94V)update6 (https://flic.kr/p/2cEe94V) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7887/45721206915_96553b09db_c.jpg) (https://flic.kr/p/2cEe8UX)update7 (https://flic.kr/p/2cEe8UX) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4819/45721206745_53438f0b37_c.jpg) (https://flic.kr/p/2cEe8S2)update8 (https://flic.kr/p/2cEe8S2) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7807/45721206435_6ba44553bb_c.jpg) (https://flic.kr/p/2cEe8LF)update9 (https://flic.kr/p/2cEe8LF) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7894/31694616397_33f5144ac0_c.jpg) (https://flic.kr/p/QhKcep)update10 (https://flic.kr/p/QhKcep) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Sorry about the issues with #6 @sammybiker . In hindsight, what do you think you would have done differently with this one before getting into contract or during the due diligence period?
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At the beginning I though that you put membrane on 2x4's under the durock, but then I saw a pile of pink 2x4's on the floor. Why are they pink?
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@tralfamadorian In hindsight, what do you think you would have done differently with this one before getting into contract or during the due diligence period? Run far, far away, ha! No, really, with how competitive the market is, there was no time to perform proper due diligence before getting under contract.
What I should have done was get my contractor in after it was under contract but before closing and really go through in detail (although we were unable to get access inside - I should have pushed back harder on this). We did review the property from the outside and it looked OK. I did miss a key indicator of the rotted tree in the back, obviously termites, and should have assumed I had termite damage in the house.
Even then, I've dealt with termites before but haven't seen anything this bad. This is very close to a worst case scenario in that regard.
Anyway - if I had picked up on the tree and then correctly assumed a high impact to the property (I wouldn't have), then I could have forfeited my earnest funds and moved on.
@ilsy Good question, I don't know. I used to think the pink 2x4s indicated additional fire resistance but I now understand that to be false or not necessarily the case. It may mean different things for different lumber mills and/or mean nothing at all.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Now rented for $1700/mo.
Property #4 Completing bathrooms and trying to find an in-stock rear French door that fits.
Plan is to have this one on the rental market by the end of this month.
Property #5 Appraisal came in well above what I needed, will only have to bring about $10K to close this deal. Appraisal also noted I was short about 250 sq ft short on my initial estimate (county records are also off). This equals about a $27k increase in overall value, a nice bonus to an already great deal.
Closing will be scheduled for approx. end of next week
Property #6 Exterior repairs completed, termite treatment completed, HVAC install on-going and we’ll start insulation and drywall installation this week, paint to start end of this week.
Property #7 Contractor went through Wednesday and it looks like I’ll be right about $30k all-in, perhaps a little less. Drywall repairs start this week, followed by paint, flooring and the new kitchen.
Property #4 Progress Photos
(https://farm8.staticflickr.com/7917/46015686244_f744b97f9f_c.jpg) (https://flic.kr/p/2d7fqmL)0087d14fb0510ca9eb56e42306340c420956a863-1 (https://flic.kr/p/2d7fqmL) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7860/46740350481_18d4779e6c_c.jpg) (https://flic.kr/p/2edhvMK)351f9b81d0946df75f708467dbe3476861d91364-1 (https://flic.kr/p/2edhvMK) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7861/46015686174_0734573caf_c.jpg) (https://flic.kr/p/2d7fqky)0812c56777db599aa2c13f49f4aec8fbcf7344e3-1 (https://flic.kr/p/2d7fqky) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4858/46740350391_1abbacbe5b_c.jpg) (https://flic.kr/p/2edhvLc)aa4c0861c7d515e6a37d41eb4460f361003132e4-1 (https://flic.kr/p/2edhvLc) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7825/46015686094_46a321c3e8_c.jpg) (https://flic.kr/p/2d7fqjb)b8415312629bfd2beca561589f6952e55718e84a-1 (https://flic.kr/p/2d7fqjb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7927/46015685994_5dbe5069b4_c.jpg) (https://flic.kr/p/2d7fqhs)dd60f7da275d6250ca30b847cf0e8d6d20bf1b7a-1 (https://flic.kr/p/2d7fqhs) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4888/46015685914_3c0328ddbd_c.jpg) (https://flic.kr/p/2d7fqg5)e22ec8427289eacf1b38ec78a999c9c32ee8ab46-1 (https://flic.kr/p/2d7fqg5) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4844/46015685754_8bf8b9bc75_c.jpg) (https://flic.kr/p/2d7fqdj)f60876ef9519f8c864f59ef8d042dc99d1609835-1 (https://flic.kr/p/2d7fqdj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos
(https://farm8.staticflickr.com/7863/46740350201_a9586c7666_c.jpg) (https://flic.kr/p/2edhvGV)e41b0ceb065674d80fa04a6c62fad70ef0a242de-1 (https://flic.kr/p/2edhvGV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4857/46740350731_a8dcfbb188_c.jpg) (https://flic.kr/p/2edhvS4)8f43c87e1dfe6312da250a4a675ba7ef9dba20e3-1 (https://flic.kr/p/2edhvS4) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7851/46015686384_8d8357bbfe_c.jpg) (https://flic.kr/p/2d7fqpb)5ee3769003f1de7c8b56dfaf593de9f3d27c6dd1-1 (https://flic.kr/p/2d7fqpb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7905/46015686414_31b9bd7faf_c.jpg) (https://flic.kr/p/2d7fqpG)4f3aaa3e6ce5a895c7df0a46e50a7203e21eece8-1 (https://flic.kr/p/2d7fqpG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4892/46687608062_fbee542e27_c.jpg) (https://flic.kr/p/2e8CciG)2e197426c4dd39f249398162c437a3541f10908c-1 (https://flic.kr/p/2e8CciG) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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@sammybiker, congrats on renting out #3!
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Thanks @Bicycle_B - I was very happy to rent it out during this time period.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Now rented for $1700/mo.
Property #4 Complete except for rear french doors.
Property #5 Scheduled to close next Friday. Rehab on this will not start until late May. Already rented back to the seller.
Property #6 Drywall nearly finished, paint to start Monday.
Property #7 Minor drywall repairs completed, minor roof leaks patched, paint complete, floors nearly finished. Kitchen going in next Thurs/Friday. Detailed scope of work to follow.
Property #7 Progress Photos
(https://farm5.staticflickr.com/4814/45957684815_8e59e08441_c.jpg) (https://flic.kr/p/2d289y8)ce9df69e27c2fe7ad01b3f2b4150f6f6cc95677b-1 (https://flic.kr/p/2d289y8) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7885/46871949051_6fef93033c_c.jpg) (https://flic.kr/p/2epUZsB)a9e0ca6fd1f7e9cc11f02f1ab034144cb9462d44-1 (https://flic.kr/p/2epUZsB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7901/45957684945_99e6cd5f2e_c.jpg) (https://flic.kr/p/2d289An)4484b0c1611106425d273f5cdff2dee329778c3f-1 (https://flic.kr/p/2d289An) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4841/46871949241_1c8f5f50a9_c.jpg) (https://flic.kr/p/2epUZvT)6d1e9e7f43e3de7846561d1150d25beae30551e2-1 (https://flic.kr/p/2epUZvT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4807/45957685125_8df98c31a5_c.jpg) (https://flic.kr/p/2d289Dt)9e9b879c51184fdd65fc2ecf1add5728588f123f-1 (https://flic.kr/p/2d289Dt) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Property #7 Scope of Work Details
Complete interior paint inside, baseboards, new flooring throughout entire home, brand new kitchen cabinets & granite. Bathrooms - new vanities, tub/shower refresh, new flooring, new toilet. HVAC minor repairs, going to try and keep this going for a couple more years. Minor plumbing and electrical (lighting, fans). Minor roof repairs.
Paint all-in @ 4000 (labor & materials)
Flooring Install all-in @ 5000 (labor & materials)
Floor Baseboard all-in @ 1200 (labor & materials)
Kitchen Cabinets + Granite all-in @ 5300 (labor & materials)
Kitchen Sink/Faucet all-in @ 300 (labor & materials)
Bathroom Rehab x2 Cosmetic all-in @ 3200 (labor & materials)
New Lighting Interior/Exterior all-in @ 2500 (labor & materials)
Exterior Siding Repairs - minor all-in @ $2000 (labor & materials)
Minor HVAC Repairs all-in @ $2000 (labor & materials)
Minor Plumbing all-in @ $1800 (labor & materials)
Minor Roofing Repairs all-in @ 700 (labor & materials)
Misc all-in @ 2000
TOTAL @ 30,000
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Nice work.
Great thread. Inspiring and useful.
I'm just about done with my first flip near the Seattle airport. I put way too much money into it. Should have painted the existing cabinets, for example. Would you ever tear out existing undamaged cabinets? Any other thoughts on finding that line between a frugal remodel and too frugal? For example, I think we made the right decision to blow out the kitchen walls to open up the kitchen to the dining and living rooms, but I don't really know.
Thanks.
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PTF this great thread.
What's a property wholesaler? Is that an individual or a company? Where do they find deals and what's a normal profit margin for them? If it's so profitable to rehab and sell or rent a house, why don't wholesalers do it themselves?
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Thanks @getting there pnw
Congrats on completing your flip. I imagine for a flip, you would want a brand new kitchen. As my properties are rentals, I will try and salvage the cabinets and paint over, install granite and new hardware vs brand new kitchen.
What are the numbers on your flip? Best of luck on the sale side. I'm from WA originally, lot of family on the West side and also on the East side, Spokane area. Texas can't compare.
@Padonak Thanks. A wholesaler is an individual (or a company) that will market for sellers directly, based upon various lists they can pay for or pull manually from city/county records. Lists such as probate, foreclosures, etc.
They'll contact these people directly and attempt to negotiate a quick cash deal. Once they have that deal under contract, they'll add their mark-up and go market that deal to their investors - guys like me. When I close on the property, they make their money and hopefully everyone walks away happy.
Normal profit margin varies. I've seen some make only $3K but more recently I see them make quite a bit more. I think on property #7, the wholesaler made $10k. Pretty impressive for what was probably less than a few hours of work and very little risk on his end.
Going back to the wholesaler of property #7 - he's a good friend of mine so we share details of our business to each other. He buys only in certain areas, not this area, hence he didn't want the deal himself. In addition, he's going after 20+ unit multi-fam and not single family homes, even if they have a $40k+ spread on them.
I should note, there are marketing expenses for the wholesaler, of course. I don't know exactly what his expenses are but I imagine he's spending at least $8k a year on letter mailing/direct marketing. But obviously, 1 deal more than makes up for that and anything more is his profit.
In addition, when he comes across deals in his farming area, he'll cherry pick and perform a full flip on it.
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My numbers are embarrassing (I spent too much for the neighborhood), but I'll try to post anyway. Bought for $374k. Put like $90k into rehab, including $13k to a "handyman" that I work with every weekend, plus $20k for a GC and team to install all the cabinets (thought I was going to do that myself) and also to do all the drywall. I do most of the work myself on weekends while keeping my day job.
Held it for 16 months. Transaction and carrying costs combined will come to about $60k. Those numbers are rough, but close. I had a hard money loan to buy at auction with 2% up front and 1% per month for two months. All that said, break even will be about $520k. Gonna put it up in a week or two. Need to do some landscaping still. In fact, still trying to decide whether to attempt that this weekend or pay to have it done.
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Yah, Washington state is gorgeous. Do you think you could do what you do in the Seattle area? Maybe Tacoma are? Spokane?
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Good luck with your flip @getting there pnw ! Starting out is tough, particularly in the flipping side of the business. What are you planning on listing for?
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I'm curious as to what your target exit price is @getting there pnw
That's a long hold time and some big numbers for a single family. Must make my $50k purchase price here look like a joke.
I purchased one of my first houses in Ohio for $11k in very early 2014. An amazing 2br/1ba cottage style stucco home with beautiful hardwoods throughout, a small but functional and cute kitchen and two perfect bedrooms. I think I put $5.5k into the rehab and it's rented consistently for $700-750 ever since. That same home, in the right location, would be an easy $600k+ home in Capital Hill or elsewhere.
Everything is relative. Anyway - hope your exit price works out well.
**And no, I don't think I could do what I do in Seattle, Tacoma or Spokane. I looked at Spokane real hard and was making offers in the area...but the rents are just too low for the purchase price. But especially around Perry District on South Hill...just a wonderful area to live in/own in.
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My numbers are embarrassing (I spent too much for the neighborhood), but I'll try to post anyway. Bought for $374k. Put like $90k into rehab, including $13k to a "handyman" that I work with every weekend, plus $20k for a GC and team to install all the cabinets (thought I was going to do that myself) and also to do all the drywall. I do most of the work myself on weekends while keeping my day job.
Held it for 16 months. Transaction and carrying costs combined will come to about $60k. Those numbers are rough, but close. I had a hard money loan to buy at auction with 2% up front and 1% per month for two months. All that said, break even will be about $520k. Gonna put it up in a week or two. Need to do some landscaping still. In fact, still trying to decide whether to attempt that this weekend or pay to have it done.
Wow, that sounds like you signed up for an extended course of study at the School of Hard Lessons. I hope you gained some valuable insights and can still manage to eke out a small profit. Ouch.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Now rented for $1700/mo.
Property #4 Complete except for rear french doors. The refi is verbally approved, just waiting for the appraisal that should be coming next week (week of 11-Feb). A little bit of drama with the new bank and getting everything together to make them happy. This is my 2nd refi with them and it definitely has me missing the relationship I had with my first bank.
Property #5 I signed closing papers and 2 of the 3 sellers have signed, the 3rd one is a mail away. Rehab on this will not start until late May. Already rented back to the seller.
Property #6 Paint mostly complete, kitchen paint is just about done, just need to start reinstalling the kitchen cabinet doors and then install new hardware. Flooring should start end of this week. I feel a lot better about this property after walking it yesterday with my contractor. The opened up kitchen to the now enclosed former porch, now dining room, looks fantastic. Once we finish with the light cans, flooring, granite throughout including the huge kitchen island, the property will look great. I dropped off the vanities this morning as well as toilets, sinks, mirrors and some other misc bits and pieces.
Went over budget a bit with my electrician. I need to replace him as he continues to go up in price and he’s pulled a couple shady moved in the past. That said, at this point, he shows up promptly and gets the job done asap, so I’ll ride it out for these last two properties. Updated photos shown below.
Property #7 Kitchen is in, waiting on granite. Finishing up bathrooms. The paint and floors look fantastic, I think I finally nailed on the perfect grey (Repose Grey Sherwin Williams #7015 if anyone is interested). It’s light enough that it goes well with the dark floors but can also be used with lighter grey floors. I love it.
Updated photos shown below.
https://www.sherwin-williams.com/homeowners/products/SW7015-reposegray/7015#/7015/?s=coordinatingColors&p=PS0
Property #7 Progress Photos
(https://farm8.staticflickr.com/7806/40007046183_d072f3f5c0_z.jpg) (https://flic.kr/p/23Xhz1k)761BF1F0-A8B6-4748-80AD-7B35E408BC0E (https://flic.kr/p/23Xhz1k) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7855/46057881495_deab4e7d47_z.jpg) (https://flic.kr/p/2daYFx6)EC99C305-1A4A-40A8-9203-D018F8D6434D (https://flic.kr/p/2daYFx6) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4848/46247249204_3b35efa906_z.jpg) (https://flic.kr/p/2dsHeXA)7201B307-4FE6-4640-A459-1927AF03ABC8 (https://flic.kr/p/2dsHeXA) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4844/46057881565_db04cd504c_z.jpg) (https://flic.kr/p/2daYFyi)BE6DC7D7-2404-4DA6-9EC0-ACFAF3A1BA13 (https://flic.kr/p/2daYFyi) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4831/40007045863_0e2f59f0cb_z.jpg) (https://flic.kr/p/23XhyUP)C92CA13D-2E4F-4C69-A5C5-AFA308520B33 (https://flic.kr/p/23XhyUP) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4872/40007045693_a872416669_z.jpg) (https://flic.kr/p/23XhyRT)FD0702C6-6CB7-4155-AC0B-136B47EAF8D1 (https://flic.kr/p/23XhyRT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos
(https://farm8.staticflickr.com/7900/46057881825_9302270a18_z.jpg) (https://flic.kr/p/2daYFCM)30DEA8CC-F5E8-4157-BFDD-1EE57BB9D59A (https://flic.kr/p/2daYFCM) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm5.staticflickr.com/4899/46247249324_7bfd59463c_z.jpg) (https://flic.kr/p/2dsHeZE)0DFCC7FA-0EFA-4E26-A1D8-CC2A3D53C474 (https://flic.kr/p/2dsHeZE) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7893/40007046313_b5b8249681_z.jpg) (https://flic.kr/p/23Xhz3z)7F840D4C-1B4C-4023-B4FF-CE9C1EAB3102 (https://flic.kr/p/23Xhz3z) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7819/46247249234_12a124db74_z.jpg) (https://flic.kr/p/2dsHeY7)8D7340A3-3FEC-4B8E-A2CF-55FA632A0CA7 (https://flic.kr/p/2dsHeY7) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Rented at $1700/mo.
Property #4 Rehab is complete. Appraisal is this Thursday and I'm shooting hard for $232,000 aka $105/sq ft.
Professional photos to follow and this will be on the rental market sometime next week.
Property #5 I formally closed on this last week and it's rented back to the sellers until May when I can get in and perform a cosmetic rehab.
Property #6 Flooring has started. Porch enclosure is now complete, increasing the sq ft by ~320. Granite will go in late next week once flooring has wrapped up.
Property #7 Rehab is complete with the exception of some minor exterior repairs that I'm bidding out. I'll update later this week/next with final value numbers and rent rates. Professional photos to follow and this one is now on the rental market.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Rented at $1700/mo.
Property #4 Appraisal came back today at $236,000 or $107/sq ft -woooooo! My all-in costs were just shy of $142k, so I'm capturing $94k worth of equity on this one, making it the best so far. This is great, considering it's not my favorite rehab - I cut some corners by leaving parts of the existing bathrooms in place, leaving the tile floors (ugly color, don't match the rest of the house), not doing any work to the exterior or replacing the windows. That said, it's a rental and it appraised, so I'm happy.
The final professional photos are below.
Property #5 It's rented back to the sellers until May when I can get in and perform a cosmetic rehab. No change.
Property #6 Flooring is just about finished, baseboard starting today. Granite will go in Thursday. Progress photos are below.
Property #7 Complete (appliances purchased, awaiting delivery). No appraisal as I refinanced this one already at tax value (only pulling about 50% equity out). I did pull recently sold comps and I'm coming up with $91/sq ft. At 1648 sq ft *$91/sq ft = $150,000.
I'm all-in at $112k, capturing $38k in equity. The home is still on the rental market. The final professional photos are below.
Property #4 Final Photos Below
(https://farm8.staticflickr.com/7867/46233379905_43d7a1d198_c.jpg) (https://flic.kr/p/2drua6K)P1133408 (1) (https://flic.kr/p/2drua6K) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7824/46424140844_8e0bb33e2d_c.jpg) (https://flic.kr/p/2dJkRFs)P1133397 (https://flic.kr/p/2dJkRFs) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7805/40182633353_afa4633606_c.jpg) (https://flic.kr/p/24dNuXk)P1133398 (https://flic.kr/p/24dNuXk) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7914/46424140894_d63d73c0da_c.jpg) (https://flic.kr/p/2dJkRGj)P1133396 (https://flic.kr/p/2dJkRGj) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7862/40182633783_9193830720_c.jpg) (https://flic.kr/p/24dNv5K)P1133394 (https://flic.kr/p/24dNv5K) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7825/40182634083_cc09bcbaac_c.jpg) (https://flic.kr/p/24dNvaV)P1133391 (https://flic.kr/p/24dNvaV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7880/40182635693_be0dd7c9b9_c.jpg) (https://flic.kr/p/24dNvDF)P1133390 (https://flic.kr/p/24dNvDF) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7812/40182632473_abb1815235_c.jpg) (https://flic.kr/p/24dNuGa)P1133405 (https://flic.kr/p/24dNuGa) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7873/40182632863_45b217c942_c.jpg) (https://flic.kr/p/24dNuNT)P1133402 (https://flic.kr/p/24dNuNT) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7800/46233380625_44103548ac_c.jpg) (https://flic.kr/p/2druaja)P1133404 (https://flic.kr/p/2druaja) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7916/33272410498_ace5eec1f4_c.jpg) (https://flic.kr/p/SGaNrY)P1133389 (https://flic.kr/p/SGaNrY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7876/32205690127_6a2466e267_c.jpg) (https://flic.kr/p/R4UzDr)P1133388 (https://flic.kr/p/R4UzDr) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #6 Progress Photos Below
(https://farm8.staticflickr.com/7905/32207446897_af0013e7ed_c.jpg) (https://flic.kr/p/R54zSz)35645fd6076c68fcb7156eeb815cb9b183c3d8cf-1 (https://flic.kr/p/R54zSz) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7866/47149382571_c8a8689b73_c.jpg) (https://flic.kr/p/2eQqUMa)f9202ba2bf265df22c1b211cb8f00f401c94d392-1 (https://flic.kr/p/2eQqUMa) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7814/32207446737_00216d24b7_c.jpg) (https://flic.kr/p/R54zPP)8a1b02267f15a0c15186dedb1df76496ffb6da2c-1 (https://flic.kr/p/R54zPP) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7913/32207446647_27e7c44cca_c.jpg) (https://flic.kr/p/R54zNg)f5e4a0c80e2b757748bf13382054e2e03a67f70a-1 (https://flic.kr/p/R54zNg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7856/32207446717_18dcb313a6_c.jpg) (https://flic.kr/p/R54zPt)77a12592724b4d4d313a16f51b0fe06eca901246-1 (https://flic.kr/p/R54zPt) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7874/47149382401_112b3ae5ca_c.jpg) (https://flic.kr/p/2eQqUJe)fee3b0c54549ecfec40b81dd7018560e8ea184e2-1 (https://flic.kr/p/2eQqUJe) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
Property #7 Final Photos Below
(https://farm8.staticflickr.com/7867/46424112114_728a9f4098_c.jpg) (https://flic.kr/p/2dJkH97)P1133409 (https://flic.kr/p/2dJkH97) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7832/40182605703_75191f225d_c.jpg) (https://flic.kr/p/24dNmJB)P1133412 (https://flic.kr/p/24dNmJB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7860/47095341472_3c64723d3a_c.jpg) (https://flic.kr/p/2eKDWf5)P1133410 (https://flic.kr/p/2eKDWf5) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7870/40182605853_230b168a6d_c.jpg) (https://flic.kr/p/24dNmMc)P1133411 (https://flic.kr/p/24dNmMc) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7925/46424101754_534a1364d6_c.jpg) (https://flic.kr/p/2dJkE4u)P1133414 (https://flic.kr/p/2dJkE4u) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7855/40182605363_cd91f9b9a5_c.jpg) (https://flic.kr/p/24dNmCK)P1133416 (https://flic.kr/p/24dNmCK) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7828/47095333462_b29c34ca72_c.jpg) (https://flic.kr/p/2eKDTRY)P1133417 (https://flic.kr/p/2eKDTRY) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7896/46424102584_eabe8dc679_c.jpg) (https://flic.kr/p/2dJkEiN)P1133420 (https://flic.kr/p/2dJkEiN) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7869/40182604793_f99aabb2b9_c.jpg) (https://flic.kr/p/24dNmsV)P1133423 (https://flic.kr/p/24dNmsV) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7889/46424101504_76b788a57d_c.jpg) (https://flic.kr/p/2dJkDZb)P1133424 (https://flic.kr/p/2dJkDZb) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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PTF
This thread makes me feel like I am doing something wrong with my life! Congrats on your success.
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#4 at 94k equity gain, wow!
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Awesome progress! I love your updates. Erm, is it just an optical illusion in photo 1133405? That toilet access looks really, really tight.
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Awesome progress! I love your updates. Erm, is it just an optical illusion in photo 1133405? That toilet access looks really, really tight.
Yeah, my thought as well. Not sure there is code for toilet access, but it could be a problem for prospective tenants with any mobility issues.
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@Steeze Thank you.
@Bicycle_B Thanks, it was a great deal. Cashflow on this from a rental stand point will suffer, however (I'm taking out the full 80% of appraisal value).
@Dicey Thanks and you're right, it's tight. Property management will look at it - worst case, we're swapping out the vanity for something smaller to allow access.
@Another Reader Thanks AR, agreed. We rebuilt the bathroom as it was before (toilet and shower location left unaltered) but I think the vanity is encroaching, making it a tight fit.
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Forgive me if you mentioned it already and I missed it, but can you share how you structure your payment to the project manager/boots on the ground point person? Does he get a percentage of the ARV, a payment per project, or payment by day/week? Obviously you're working well together as a team, but just curious how you've structured his portion and if there are any financial incentives for him (or the construction team) to finish on time (or bonuses for finishing early)?
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@NonprofitER I used a PM/coordinator for the first two projects and for each project, he earned $1800 split between a 50% kick-off payment ($900) and a 50% completion payment ($900). We had an agreed upon schedule and budget and his job was to manage it to the best of his abilities. There were no further incentives or milestones associated with his scope.
After seeing how well the first two went, I dropped the PM/coordinator and worked directly with the contractor with no local PM/coordinator. Back-up plan would be to reengage the PM/coordinator if things went sideways.
The contractor and I work as follows:
- Roughly on a 33% milestone payout - on a drywall/paint/flooring/exterior job, I'll make 1 payment after drywall & paint is complete, 1 payment after flooring is complete and the final payment after exterior is complete, for example.
- No upfront payment, he works first, then gets paid.
- I supply bulk materials, he will supply consumables and occasionally some bulks that I missed/wasn't able to get. All materials he supplies are reimbursed upon proof of receipt + 10% handling charge for his time.
- Some subcontractors (plumber, roofers, etc) are paid by my prime contractor and I reimburse him. No identified mark-up. There is a risk that my prime contractor marks up their prices, of course, and I do anticipate this happens occasionally. Do I care? Not really. His referenced subs have been good, show-up on time and knock the work out.
- Other subcontractors operate separate of my prime contractor and I pay them directly (HVAC, garage door folks, mold inspections, etc). But at this point, everyone knows each other and communicates without me having to get too involved, generally.
Hope this helps.
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Super helpful, thanks.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Rented at $1700/mo.
Property #4 On the rental market for $2200/mo. I feel slightly uncomfortable asking this much but I'm going to try. Feeling of discomfort isn't validated by fact, just emotional discomfort...never had a house rent for so much. Will drop to $2000/mo if we don't get any bites over the next couple of weeks.
Meanwhile, I'm waiting for the $189k refi to hit my account.
Property #5 It's rented back to the sellers until May when I can get in and perform a cosmetic rehab. No change.
Property #6 Flooring is finished, granite is in. This nightmare rehab is slowly coming to an end. My plumber that has worked on all of my other properties is tied up for the next two weeks, so I had to bring in someone new, a good friend's contractor. He's been doing great work this week doing odds and ends. I'm very thankful for my local network.
Updated progress photos showing the granite are below.
Property #7 Now rented for $1600/mo.
Property #6 Progress Photos
(https://farm8.staticflickr.com/7847/47229198091_e9d5c3a0f3_c.jpg) (https://flic.kr/p/2eXtZ9P)59ede852da19757781808783a6930668d6b5bcc5-1 (https://flic.kr/p/2eXtZ9P) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7889/47229198011_8fafb51e25_c.jpg) (https://flic.kr/p/2eXtZ8r)81ad8ffa3eeb648e55a6fdd4c9c2971ae7e3b4ea-1 (https://flic.kr/p/2eXtZ8r) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://farm8.staticflickr.com/7927/47229198121_0b1c3ae8b8_c.jpg) (https://flic.kr/p/2eXtZak)2c6bf959dbf09304686f7d852e282b8261d6932c-1 (https://flic.kr/p/2eXtZak) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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A summary update of this challenge thus far, including some forecast data points.
*You'll see Property #6 forecast equity has dropped dramatically as that scope of work grew and grew with the problems that continued to crop up. The scope on this project grew from approx. $30k to $65k.
**You'll also see monthly cashflow for Property #5 & #7 grow dramatically - this is because I only refinanced about 40-50% LTV, leaving a ton of equity in the properties (reducing my mortgage payment) while still commanding top rent.
Property #1 Equity Earned: $83,000 Monthly Cashflow: $250
Property #2 Equity Earned: $42,000 Monthly Cashflow: $375
Property #3 Equity Earned: $42,000 Monthly Cashflow: $400
Property #4 Equity Earned: $94,000 Monthly Cashflow: $200
Property #5 Equity Earned: (forecast $77,000) Monthly Cashflow: (forecast $800)
Property #6 Equity Earned: (forecast $15,000) Monthly Cashflow: (forecast $350)
Property #7 Equity Earned: $38,000 Monthly Cashflow: $650
Equity Earned vs Goal (including forecast): $391,000/$200,000
Monthly Cashflow Earned vs Goal (including forecast): $3025/$1625
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My guess is once you subtract out depreciation, this cash flow will add very little to your taxable income. Double win!
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@sammybiker, are these cash flow estimates before or after estimated costs for ongoing maintenance?
Do you include any allowance for vacancy, or is this the cashflow assuming 100% occupancy?
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My guess is once you subtract out depreciation, this cash flow will add very little to your taxable income. Double win!
@Another Reader That's my hope!
@Bicycle_B Cashflow estimates include a small on-going maintenance % but I've kept it smaller than a lot of my other portfolio as these were freshly renovated. Vacancy is included.
I owe the thread a breakdown of my fixed & projected expenses and how I come up with my cashflow numbers. I'll put this together and post it up eventually.
Property #7 for example (rented for $1600) - my mortgage is $430/mo. Insurance is dirt cheap ($35/mo? I'll have to double check this), taxes $160/mo, repairs & vacancy $160/mo, throw another $50/mo towards capex and $100/mo for property management.
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@Bicycle_B Cashflow estimates include a small on-going maintenance % but I've kept it smaller than a lot of my other portfolio as these were freshly renovated. Vacancy is included.
I owe the thread a breakdown of my fixed & projected expenses and how I come up with my cashflow numbers. I'll put this together and post it up eventually.
Property #7 for example (rented for $1600) - my mortgage is $430/mo. Insurance is dirt cheap ($35/mo? I'll have to double check this), taxes $160/mo, repairs & vacancy $160/mo, throw another $50/mo towards capex and $100/mo for property management.
Thanks!
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A summary update of this challenge thus far, including some forecast data points.
*You'll see Property #6 forecast equity has dropped dramatically as that scope of work grew and grew with the problems that continued to crop up. The scope on this project grew from approx. $30k to $65k.
**You'll also see monthly cashflow for Property #5 & #7 grow dramatically - this is because I only refinanced about 40-50% LTV, leaving a ton of equity in the properties (reducing my mortgage payment) while still commanding top rent.
Property #1 Equity Earned: $83,000 Monthly Cashflow: $250
Property #2 Equity Earned: $42,000 Monthly Cashflow: $375
Property #3 Equity Earned: $42,000 Monthly Cashflow: $400
Property #4 Equity Earned: $94,000 Monthly Cashflow: $200
Property #5 Equity Earned: (forecast $77,000) Monthly Cashflow: (forecast $800)
Property #6 Equity Earned: (forecast $15,000) Monthly Cashflow: (forecast $350)
Property #7 Equity Earned: $38,000 Monthly Cashflow: $650
Equity Earned vs Goal (including forecast): $391,000/$200,000
Monthly Cashflow Earned vs Goal (including forecast): $3025/$1625
Great summary update @sammybiker ! I think your threads are some of the most useful in demonstrating how powerful a wealth builder properly chosen real estate can be.
Question now that you've done several of these in a row- what have become your favorite sources for materials? Paint, LVP, cabinets, appliances, etc?
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Are you factoring in the cost for your time into these calculations.....
or are you working for free?????
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@tralfamadorian Thanks, I appreciate that. Agreed, RE can/is a real wealth builder.
Re: materials, I used HomeDepot for the most part just because it's hard to beat their prices and they are always there to go get more if I bust my material take-off. Cabinets are from a local company and they started pretty high but the last few projects, really came down in prices (30% drop), paint is all from Sherwin Williams. Appliances are from Sears and I try to wait until they have sales.
@pmac No, I haven't calculated my time into these numbers. That said, I'm not swinging the hammer (although I have drilled a couple screws) and I most certainly have spent more time updating and interacting with this thread than truly working on the project. After all, I've been either outside the country or 2,000 miles away for the duration, so.
If you're looking for cracks in my numbers, I would focus on lack of reported holding costs (insurance, utilities, lawn care) as well as financing costs. These round up to about $20k cumulative for all (7) properties. You could get real gritty and ask about flights to the projects, rental cars, etc. I'm fortunate that these are provided by my day job, so I'm not sure how to account for them (I don't).
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Rented at $1700/mo.
Property #4 This had been on the rental market for $2200/mo for a couple of weeks with only one bite. Dropped the rental price to $1950/mo on Thursday last week and the response was strong. Then we got a (good) call from an insurance company on Friday.
A family had lost their home to a fire last week. They had quality insurance coverage and my property was about the only one on the rental market that would keep the kids in the great local school and had the 4 bedrooms they needed. The insurance company offered $2300/mo for a six month lease, month to month afterwards at the $2300/mo rate.
Done. We're scrambling now to wrap up a few make ready items. The family came in with a deposit on Friday afternoon, moving in on Tuesday. My hope is to negotiate a lease extension after the six months but we'll see what happens.
Deposit and rents are paid for by the insurance company, direct deposit every month. Love it.
Still waiting for the $189k refi to hit my account.
Property #5 It's rented back to the sellers until May when I can get in and perform a cosmetic rehab. No change.
Property #6 Property has been turned over to property management. We have a solid make ready punchlist but overall the property looks great. No updated photos but I'll have the final pro pictures ready in a couple of weeks.
Thinking this will rent for $1500/mo. Will be on the rental market in another week.
Property #7 Rented at $1600/mo.
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Awesome on the insurance rental.
It's the first time in awhile that you haven't had some properties in the pipeline. Are you taking a break and letting things settle? Or is the inventory of flood distressed properties slowing down?
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Thanks @tralfamadorian
Correct, the pipeline isn't what it was a few months ago and I'm ready for a break on the buying/rehabbing. My immediate game plan is to stabilize the portfolio, eliminate any remaining short term debt and really try and get the first one, maybe two, properties paid off by end of 2019 (super aggressive). A couple project ideas are on the back burner and I hope to kick one of them off later this year, but all of the above needs to happen first.
This thread has been a lot of fun for me and I'll start another one if/when I move in another direction. Really thinking of going after some flips and trying to flip my way to mortgage pay-off, tracking as I go. Something nuts such as paying off (5) properties in 18mo using flip profits. We'll see.
I have the team established and I want to leverage that before I lose them.
The inventory of flooded properties has slowed a bit but there are still properties hitting the market. The local investors think there is a second wave coming soon as banks that have just now completed the foreclosure process of Harvey properties turn around and place these on the market.
Of course, these would be the worst properties, assuming they'e never been gutted - but maybe the banks will do some gut work, like how they would go put new roofs on properties (and other such improvements) during the '08 crisis to motivate foreclosure buyers.
We'll see!
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Congrats on the insurance deal on Property #4 @sammybiker -- that is fantastic.
A question for you -- apologies if I missed a discussion of this somewhere in your awesome thread. Did Houston or other towns in Harvey's path do any kind of future flood forecasting, to decide whether some flood-damaged properties should not be rehabbed, but rather destroyed? If the state or cities didn't do that, you would at least think that the insurance companies would do their own risk analysis and set their rates accordingly. But judging from the reasonable insurance rates you are getting, it looks like the insurers think future flood damage is unlikely?
In my hometown (midwest) there was a serious flood about 10 years ago, and city acquired/condemned a bunch of properties and forbade rehab or rebuilding in certain areas.
Thanks!
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Thanks @Trifele
Short answer to your question is yes. Specifically in my market, not far from a lot of my properties, there is a small town (same county I invest in), great school district, awesome neighborhood, that was just too low. Some of the neighborhood is X-flood zone (aka non-flood zone), others are zone A or AE, which are true flood zones and the ones that insurance companies jack up the rates for.
My insurance will write a policy if 1) property is in X-Flood zone (aka non-flood zone) and 2) if it's only had one claim in the last 10 years (Harvey)
In this small town, there are some properties that were deemed rebuild restricted unless you go and raise the property. And some people have done it! They love the area and they've jacked up these beautiful single family properties to get over whatever flood threshold.
To compound things further, this city was annexed from a good school district to the best local school district shortly after Harvey. So buyers are still going nuts in this area and there are some flippers that are flipping and for solid margins. And I guess as long as you're in an x-flood zone, you're OK. Until fema rezones....then I imagine selling might be an issue. But folks here would likely still buy...flooding every few years seems almost accepted (this small town has gone through 3 or 4 flooding events since the early 90s but nothing on the scale of Harvey).
A couple youtube vids of this specific town...
https://www.youtube.com/watch?v=I4jCYBWyc_A
https://www.youtube.com/watch?v=fkNXv3Gi5BQ
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Thanks @sammybiker -- very interesting.
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Update
Property #1 Rented at $1800/mo
Property #2 Rented at $1595/mo
Property #3 Rented at $1700/mo.
Property #4 Rented at $2300/mo. Refi cleared in early April.
Property #5 It's rented back to the sellers until the end of this month when I can get in and perform a cosmetic rehab. No change.
Property #6 Punchlist activities dragged out, now complete and on the market at $1500/mo. Final photos are below.
Property #7 Rented at $1600/mo.
Property #6 Final Photos Below
(https://live.staticflickr.com/65535/46833960445_690dfdc0ac_c.jpg) (https://flic.kr/p/2emyhLD)P1066687 (https://flic.kr/p/2emyhLD) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/46833960095_f9f552a18e_c.jpg) (https://flic.kr/p/2emyhEB)P1066686 (https://flic.kr/p/2emyhEB) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/47750542921_f6a3905c65_c.jpg) (https://flic.kr/p/2fKy1NM)P1066692 (https://flic.kr/p/2fKy1NM) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/32807117487_b46d839751_c.jpg) (https://flic.kr/p/RZ443F)P1066693 (https://flic.kr/p/RZ443F) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/47750542601_ab4f5ebb74_c.jpg) (https://flic.kr/p/2fKy1Hg)P1066697 (https://flic.kr/p/2fKy1Hg) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/47750542781_61113d240a_c.jpg) (https://flic.kr/p/2fKy1Ln)P1066698 (https://flic.kr/p/2fKy1Ln) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/32807117257_c363744539_c.jpg) (https://flic.kr/p/RZ43YH)P1066702 (https://flic.kr/p/RZ43YH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/47750542691_5fae672d81_c.jpg) (https://flic.kr/p/2fKy1JP)P1066703 (https://flic.kr/p/2fKy1JP) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
(https://live.staticflickr.com/65535/46833959985_6d9b11d404_c.jpg) (https://flic.kr/p/2emyhCH)P1066704 (https://flic.kr/p/2emyhCH) by sam burn (https://www.flickr.com/photos/155158914@N08/), on Flickr
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I'm concluding the challenge at this time. Huge thanks to MMM and everyone that posted in this thread with advice/input and encouragement. I've learned a lot over the last 10ish months and it's been a heck of a lot of fun.
Updated summary of this challenge, including some forecast data points.
Property #1 Equity Earned: $83,000 Monthly Cashflow: $250
Property #2 Equity Earned: $42,000 Monthly Cashflow: $375
Property #3 Equity Earned: $42,000 Monthly Cashflow: $400
Property #4 Equity Earned: $94,000 Monthly Cashflow: $200
Property #5 Equity Earned: (forecast $77,000) Monthly Cashflow: (forecast $800)
Property #6 Equity Earned: $10,000 Monthly Cashflow: (forecast $850) *Increase in monthly cashflow due to not refinancing this property, it's paid off. Decrease in equity earned due to blown estimate/massive scope growth.
Property #7 Equity Earned: $38,000 Monthly Cashflow: $650
Equity Earned vs Goal (including forecast): $386,000/$200,000
Monthly Cashflow Earned vs Goal (including forecast): $3525/$1625
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Congrats, and well done! Thanks for posting the wrapup.
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Great job and great thread. $3,500 a month in cash flow is enough (or nearly enough) for many here to retire, and you accomplished it in under a year.
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Congrats @sammybiker and thanks for this great thread! I learned a lot.
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Wow, you've done seven in the time it's taken us to do one! Congratulations, SB, and thanks for taking us along for the ride.
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Great summary and congratulations on the achievement @sammybiker !
I'm sure that many reading are impressed by your success and would like to do some (or more) real estate of their own one day. Do you have any lessons learned? Things that you wish you knew starting out?
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This has been a great journey to follow along with. Are you the sole owner of these properties now, with only bank financing? $3500/mo in cashflow is great, I'm very impressed with your process and results.
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As someone who is looking for self employment venues and has friends in the home remodel business-this is awesome to see. I'd love to schedule a phone call or such and pick your brain. I have friends in san antonio and have considered entering the rental market down there.
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PTF
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@Bicycle_B Thank you, I appreciate that.
@Spitfire Thanks and I agree, for a MMM types, it's a liberating income level, absolutely.
@Trifele Thank you!
@Dicey Hey, thank you, hope you've been well. Pretty sure your one house still has more light cans vs all mine...combined.
@tralfamadorian Thank you and good call on the lessons learned.
- Try and get more inspections done when possible. It's not always possible and because of this, I largely stopped doing them all together. But I should still strive to perform an inspection to weed out the nightmare projects like #6.
- Continue to seek bids from other contractors. I had declined to work with a couple other folks as I had a good thing going with my contractor but in reality, I probably could have saved a lot more money, especially on the last couple of projects, by going elsewhere. I got lazy and comfortable.
- Establish a schedule and track it religiously. I did this on the first couple of projects but again got lazy and comfortable. It's real dollars that are lost every day a property isn't occupied or is waiting on utilities turn on because I forgot, etc.
- Be more selective and stick to the original goal. The last two properties I really didn't need and the funding and rehab for these caused some stress that if I could do it over again, I probably would have just passed. It's hard to say no to another $1500/mo in cashflow and $48k in equity (originally planned for closer to $80k) but it was stressful.
These are the key lessons learned that come to mind.
@theoverlook Thank you. Correct, sole owner. Bank leverage is as follows and you'll see that the amount correlates closely to the monthly cashflow:
Property #1: $178k mortgage balance
Property #2: $129k mortgage balance
Property #3: $115k mortgage balance
Property #4: $189k mortgage balance
Property #5: $115k mortgage balance
Property #6: No mortgage
Property #7: $79k mortgage balance
@zoochadookdook Thanks and sounds good. Shoot me a PM, always happy to chat RE.
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I've had nothing useful to add, but I've really enjoyed following your successful journey @sammybiker . Many congratulations!
Can I ask what the plan is now? I suppose what I really want to know is whether you've enjoyed it so much that you're going to continue mostly because it's fun, rather than just to make money out of it (or was it just a means to an end?)
I guess there are parallels with 'one more year syndrome' vs. 'being liberated from having to work for money but continuing to work because it's fun.' I'd appreciate your thoughts on how you feel about the process.
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Thanks @Chuck Ditallin
Rough plan now is to focus on stabilizing these new properties and debt paydown on at least the lower leveraged properties with a goal to get to a more comfortable portfolio debt to income ratio. I don't necessarily want to pay off everything but getting a few more free and clear properties is the near term goal.
Further to that, I want to go back into private lending - lending out 60-70% LTV on projects that investors in my circle are working on, namely single family flips. I keep first position lien on the property and get to pick and choose my projects. I was doing a little bit of private lending in 2017 before Hurricane Harvey and have done a couple deals already this year. Getting more involved with lending and being more passive all while still being involved at a high level in projects and the market is fun.
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@sammybiker any chance you would want to start a thread like this and document some private lending adventures? That's an interesting topic to me and likely to others as well. Seems like a reasonably secure investment with good returns.
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@Spitfire Sure thing, that sounds fun. It would probably be later this year.
@sammybiker any chance you would want to start a thread like this and document some private lending adventures? That's an interesting topic to me and likely to others as well. Seems like a reasonably secure investment with good returns.
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Hey@sammybiker, it's been almost a year. Seems like a goood time for an update. I loved following along, and I'm hoping your efforts have been richly rewarded. What have you been up to in the interim and is this pandemic having an effect on your properties?
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Can't believe it has already been a year!
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Thanks @Dicey & @Steeze
High level, things have been good. No issues from the pandemic to my Texas portfolio, I think we suffered one late payment in April but they caught up and that was all, thankfully. My Ohio portfolio just suffered its first tenant loss but they were questionable even before the pandemic, so I'm not stressed/probably a good thing.
I still wish I had not done properties 6 & 7 as it spread my cash reserves very thin and as I never refinanced property #6 and only refinanced property #7 about 50%, I left a ton of cash in the properties, more than $160k+. I've taken on short term debt in the mean time while allowing cash reserves to come back up. To me, the extra equity and additional cashflow wasn't worth being spread so thin and running with low cash reserves for so long, not to mention the additional stress of the renovations, #6 going way over budget, etc.
I'm happy to say now that cash reserves are back up just shy of $90k and that continues to grow. This summer I'll begin the pivot to eliminate outstanding shorter term debt and probably refinance #6 and possibly #7 to lock in additional long term, low interest debt and bump cash reserves even higher.
I've not pursued any further private lending after closing out a couple successful loans at the end of last summer. I think I would still like to move in that direction eventually but this pandemic has me more motivated to increase cash reserves and rethink my debt load. Personally, I'm thankful to still have strong W2 income and I'm fighting some lifestyle inflation, as mentioned in our PM but working those issues out.
All good, thanks for checking! I sure hope to have another journal here soon as it kept me accountable, focused and motivated.
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Love the honesty in the update. Congrats on staying stable financially and moving towards your chosen cash level. Good luck on lifestyle inflation!
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Thanks for the update @sammybiker! Glad you are doing well.