BiggerPockets

Originally posted by Jack Srimani

Specifically I would like to know the cost of hardwood floor refinishing.

Also the heating unit is one. I would like to have a separate heating unit for the lower unit. So that needs to be worked on. So I would like to get an estamate value to do so.

I have no idea of rehab of a house. So I would appreciate some guidance. I am trying to figure it out whether doing rehab of this is a good investment should I get the house at 55k. Once again I appreciate any help.

Refinishing hardwood floors can vary greatly. The easiest way to figure that out is to call a couple of companies and see what they charge per square foot.

Splitting the heating system could be very costly, especially in an older house.

The rest of your questions aren't as easy.

Start by assuming you are going to rehab to flip. What would the duplex sell for in good condition? I mean a real selling price, not a wishful thinking price. Then apply the formula:

(ARV x 70%) - repairs = Maximum Purchase Price

ARV = After Repair Value

So you need to get a real selling price and a solid estimate on repairs.

Rehabbing to rent is a little different. You still need to have a solid estimate on repairs. If you use the 2% rule, meaning that the rental income should be at least 2% of the purchase price, you should pay no more than $60,000 INCLUDING repairs. (1200/2%)

The real red flag here is that you have absolutely no rehab experience. That being the case, remember two simple rules that will come into play every time: It will take a lot longer than you think and cost significantly more than you expect.

:cool:

Do you have any idea how much cost that one can estimate to separate heating unit in old house. Thanks

Do the hardwood floors need to be totally re-done, or can they just be sanded down and "saved" that way...relative difference on costs there.

What is the asking price relative to its value? 74000 isn't bad just at asking for a duplex...however if the house is only worth like 80-90 fixed up, then it's horrible. Even if fixing up to rent. Can't do much really without that bit here...

Separate furnace units are nice...was there ever an issue with the one furnace utilizing both units? If no, you may want to leave it as is and avoid the rehab there. (these old homes can be tough to update cost-wise sometimes)

As long as you can keep it under 100K if renting it out (purchase + repairs), you should be OK. Having one unit empty even for a little bit won't kill you, and you should get a little cash flow unit going. Again, even at 55, what's the after repaired value? (without the furnace issue, it doesn't look like you'd need to spend a ton rehabbing this initially)

Another option on the heat might be to put electric baseboard heat in the 1/1 and block off vents. You would want to block them in such a way the tenant couldn't undo them.

Do you know what kind of heat it is? I think we're all assuming forced air. A boiler would be tougher to separate. In that case, you'll need some way to measure the flow to each unit.

Never buy a property where you pay the heat. Why? Tenants are too warm. Will they turn down the furnace? No, they will open a window. Especially in that upstairs 1/1 where the heat from the lower unit will keep it pretty warm. Will they think, "hmmm, my heating bills are too high, maybe I should turn down the heat". Nope, you're paying, they could care less. So, you think, "I'll lock up the thermostat". A bag of ice hung over the thermostat will fix that. Oops, sorry, the kids bumped into the cover and knocked it loose.

If there's no way to separate, prorate it based on the square footage, people or some other factor.

Originally posted by Jack Srimani

Thanks Jon for this last bit of advise. So if separation of the heating unit is cost prohibitive then there is no choice but to pay for the heating bill of the tenants. In such situation if I factor the heating cost in the rent does that make sense. Or will it be a losing property.

I have another question if you can help me. How do I know the real price of the property after say rehab is done. Do I compare with other properties in the locality of similar kind. Thanks
Pl. let me know.

Check out some MLS listing sites that cover your local area for the comparable properties in your area. Make sure you pay attention to the details such as number of rooms, square footage, etc.

As for the rent adjustment, you'll also have to compare that to the comparable rentals in your area. If you jack up the rents too much to cover the heating cost, you'll be fighting an uphill battle against the properties with lower rents.

The posts above all assumed that the heat was forced air - is this the case, or is it possible that there are radiators?

Still could be costly to separate with radiators, but openings for ducts aren't needed, just openings for pipes; and in rentals, often these are just passing through the room without being enclosed whatsoever.

Steve I think it is a forced air heating. Whom should I contact in order to get an estimate of separation of heating unit. Jeffrey thanks for the rate you quoted you get when refinishing and old hardwood. Now I have a question for you. This property together is also about 2500 sq ft. So completing the hardwood will be about five plus thousand dollars. Does restoring hardwood bring a little more rent. Also if not so will installing new carpet cost lesser here. Finally if windows need to be replaced in each of the two duplex unit how much I am looking. I appreciate your feedback.
Thanks.

Agree with Marc regarding the HVAC contractor. In some cases, if the duplex is divided by upper-level and lower-level, then you can try to see if the HVAC equipment could be located in the attic space for the upper unit while in the basement for the lower unit. That might result in less wall and ceiling repair work. One thing that you will need to be sure of is that the return ducts are also properly divided; the return air from unit 1 should not be going to unit 2's HVAC system.

After visiting the property for second time I found out that the upper floor has kind of curvature in the bathroom area. I am wondering why there is curvature in the bathroom. Is it may be due to structure problem. There are cracks in the ceilings and looks like plastering needs to be done all along the wall. How much is the cost of plastering two units of a two bedroom duplex. The third thing is that there is no air conditioning in the building. I was told that old home of more than one hundred years old this is common. Without air whether the duplex is rent worthy or not. I appreciate any feedback
Thanks