5 days from closing to rented (with rehab)

20 Replies

I'm stoked about my recent success - closing on my third rental property and getting it rehabbed and rented in less than 5 days.

I closed on Friday afternoon and immediately went to work.  I pulled 16 hours a day for the next 4 days, I even convinced my mom, dad, and finance to join me.  We camped out on the floor on blow up mattresses and had an awesome "long" weekend.

By Wednesday afternoon the property was rented for $100 more than I was hoping to get!

Purchase price: 83,750

Rent: $1150

Rehab: $3,000

Here are some before and after photos:

https://drive.google.com/folderview?id=0B1YEjtrv5o...

Nice job. I'm jealous. It looks like you live in CA but invest in Chicago? How does that work? How did you find this deal?

I'm like @Mike G. Taylor, I'm jealous, and I'm in Chicago. Lol. 

Wow, what a great job you guys did in a short amount of time. 

Could you tell me how this rhab cost $3,000??

Could you spell out your purchases and the costs associated with them so it would be more clear"?

Could you tell me about the washer and dryer enclosure .  How much did the new same washer and dryer cost?  What did the moving of the w/d cost and did a plumber do it? 

How much did the bathroom upgrade cost?  The paint cost?  Are those new closet doors and what was the utility closet before yu used it to house the w/d?  Were any changes made in the kitchen?

Thanks

Thanks for the kudos everyone!

@Mike G Taylor I am currently based out of California, but the market there is too expensive.  I lived in Chicago prior to moving to California, and I've just kept up to date on market conditions there.  I know instantly when something is priced right or not so I've stuck to what I know. 

This particular property was a short sale I saw hit the market when I was in town getting my second property rented out. 

In terms of property management I've done it all myself. I'm working with condos, and yes the HOA's can be a pain sometimes but the one upside is that there's no exterior maintenance, no roof to worry about, and most of the time I can call the building management first if there is an issue. So far so good :)

@Barbara G.  That is 3k including round trip flights from California ;)

There really wasn't much to this rehab except for a lot of cleaning and paint. The major difference is in the presentation and the fantastic photography from my fiancé' she's a real estate photographer (http://www.sandiegohomephotography.com).

The biggest expense was the new washer and dryer ($1500 with a 4 year extended warranty from http://www.abt.com) which was somewhat offset by selling the old unit to another investor on craigslist! There was no plumber involved abt included free delivery and installation.

Bathroom upgrade costs where about $75.  That was for a new light bar, can of paint and a shower curtain liner :)

No new closet doors just a bit of white paint. No changes to the kitchen. The cabinets are not amazing. But since I'm following the BRRR model, I decided to make the best of them for now, and redo the kitchen and original 100 year old oak floors before selling in a few years.

Awesome job.

Wow that place looks amazing! Those are some nice pictures too. They really bring out the brightness of the unit.

Originally posted by @Kirk Berryman :

I closed on Friday afternoon and immediately went to work.  I pulled 16 hours a day for the next 4 days, I even convinced my mom, dad, and finance to join me.  

 Wow! How on earth did you get your banker to come out there as well? You must have some dirt on the guy :D

Congratulations on the quick turn-around - it is a nice feeling to have things filled quickly!

Congrats. Property looks great. Looks totally worth waiting out a short sale offer. Can you say how much the HOA fee is? I can buy condos for under $100K in CA and get $1100 rents. But the HOA fees plus taxes are a deal breaker.

@JD Martin yes that was a bit of a convenient slip up, she has become my banker lately too :D

K. marie P. HOA is $200 taxes are $1800. Which part of California are you buying condos in? My problem with most of the affordable areas of California I've looked at is that most of them are not all that desireable (I wouldn't personally live there.) It's not the best scale to go by, but I'm fairly humble and have decided to use it as my barometer.

I would much rather have a flood of applications and be super picky about my tenants than find some place that may be physically closer to me, but have to deal with vacancies, and/or shady tenants.

Originally posted by @Kirk Berryman :

@JD Martin yes that was a bit of a convenient slip up, she has become my banker lately too :D

@K. marie P. HOA is $200 taxes are $1800. Which part of California are you buying condos in? My problem with most of the affordable areas of California I've looked at is that most of them are not all that desireable (I wouldn't personally live there.) It's not the best scale to go by, but I'm fairly humble and have decided to use it as my barometer.

I would much rather have a flood of applications and be super picky about my tenants than find some place that may be physically closer to me, but have to deal with vacancies, and/or shady tenants.

Thanks for the additional info. Your numbers are what I expected. So that $350/mo HOA/taxes isn't killing your cash flow? I sold one condo last year where the rent was $950 and I was all in for less than $40K (exceptional sub2 deal). Great area, safe, easy to rent, near the large state university. HOA was $200 and on the rise. As is the case with all condos here built more than 20 years ago. I sold it for $75K with no rehab. I just couldn't see holding it when that $200 could explode any minute when i know all the units need to be reroofed soon, the parking lot redone, the patio fences replaced, etc. Either the HOA goes up, there will be a special assessment, or it starts to turn ghetto because the HOA can't impose or collect the needed fees. I keep taking the money and running on the condos and HOA props.

K. marie P. the other risk is HOA litigation on construction defects.. its financial suicide for the owners and they don't realize it when some HOA sue happy lawyer talks them into some big suit. seen that show a few times.

Originally posted by @Jay Hinrichs :

@K. marie P. the other risk is HOA litigation on construction defects.. its financial suicide for the owners and they don't realize it when some HOA sue happy lawyer talks them into some big suit. seen that show a few times.

 Haven't seen that yet on any I've bought, but know of pending lawsuits in my farm. 

The OP states that there is no exterior maintenance or roof to deal with. Maybe not in management of the property, but the bill is coming, At $350/mo for HOA and taxes, he's already at 30% fixed expenses. That doesn't account for maintenance, repairs, vacancy, insurance. He's self managing which saves some money. But it's long distance (which does have costs, even just one plane ticket from CA and back). He's easily at 50% expenses in my book. Condos are tricky because the entry costs and rents seem more doable. I just haven't seen them work out as a long term rental. The resale of a condo only works out if you sell during the upswing or at the top. It's the hardest thing to sell in a downturn.

Originally posted by K. marie P.:
At $350/mo for HOA and taxes, he's already at 30% fixed expenses.  That doesn't account for maintenance, repairs, vacancy, insurance.  He's self managing which saves some money. But it's long distance (which does have costs, even just one plane ticket from CA and back).  He's easily at 50% expenses in my book.  Condos are tricky because the entry costs and rents seem more doable.  I just haven't seen them work out as a long term rental.  The resale of a condo only works out if you sell during the upswing or at the top. It's the hardest thing to sell in a downturn.

Yes you are correct, I'm already at 30% but that 30% also covers heat and hot water, which which means I don't have a furnace or a water heater to replace and maintain. It includes the roof and exterior maintenance which I don't have to deal with. In all honesty there is not much more maintenance left. Yes the bill is coming for a new roof or for a boiler one day, but that is what the HOA fee and reserves are for. The HOA fee just smooths out the cost over time.

I'm not saying out of sight out of mind, but seeing that I don't have to personally deal with those issues and be hit with a $10k roof expense and project to manage from afar makes long distance management much easier handle.

Flying back from California is not a hassle, in fact it's almost a benefit. I get to write off visits back home to see family as an expense on my taxes because I'm also checking in on the properties I own.

Condos are not perfect, and they are not for everyone, but I'm happy with what I've got so far - no need to rain on my parade :)

Originally posted by @Kirk Berryman :
Originally posted by @K. marie P.:
At $350/mo for HOA and taxes, he's already at 30% fixed expenses.  That doesn't account for maintenance, repairs, vacancy, insurance.  He's self managing which saves some money. But it's long distance (which does have costs, even just one plane ticket from CA and back).  He's easily at 50% expenses in my book.  Condos are tricky because the entry costs and rents seem more doable.  I just haven't seen them work out as a long term rental.  The resale of a condo only works out if you sell during the upswing or at the top. It's the hardest thing to sell in a downturn.

Yes you are correct, I'm already at 30% but that 30% also covers heat and hot water, which which means I don't have a furnace or a water heater to replace and maintain. It includes the roof and exterior maintenance which I don't have to deal with. In all honesty there is not much more maintenance left. Yes the bill is coming for a new roof or for a boiler one day, but that is what the HOA fee and reserves are for. The HOA fee just smooths out the cost over time.

I'm not saying out of sight out of mind, but seeing that I don't have to personally deal with those issues and be hit with a $10k roof expense and project to manage from afar makes long distance management much easier handle.

Flying back from California is not a hassle, in fact it's almost a benefit. I get to write off visits back home to see family as an expense on my taxes because I'm also checking in on the properties I own.

Condos are not perfect, and they are not for everyone, but I'm happy with what I've got so far - no need to rain on my parade :)

Didn't mean to rain on your parade. Good units in good areas that are easy to rent (or sell) are always a good thing. I'm just commenting on the expenses the way I see it and from my experience with HOAs. I can buy (and have bought) condo/HOA properties here CA with similar expenses and lower purchase prices. But I still I don't want them as rentals. To each his own.

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