This is my second rehabbed property, which was just completed today (and listed today). So, the jury is still out on whether or not this can officially be considered a success story. Let me know what you think.
I purchased this duplex in mid-September in a historic district in Harrisburg, PA. Unit #1 was a very large 1 Bed / 1 Bath which the owner just rented out for $775. Unit #2 was a very large (2 floors) 3 bed / 1 bath, which was vacant and needed some work. Current owner was looking to try to get $1,000 for unit #2 if he kept the house. I purchased the house for $119,000.00 with $3,000.00 seller help to offset some closing costs.
I completely updated Unit #2. Also I added an additional bath to make it a 3 Bed / 2 Bath. Each floor in unit #2 has its own bath and very large bedroom.
I am out of pocket $27,000 in rehab costs. Most of that money went to Unit #2, however, some went to exterior common maintenance. I just listed Unit #2 for $1,330.00. So, what do the numbers look like?:
Purchase Price: $119,000.00 ($3,000.00 went to seller assist)
[Potential] Gross Rent Revenue: $2,105.00
I don't do rehabs, so I know very little about this, but it SOUNDS great to me. :-D I also love what you did with the property. Well done and good luck!
@Jody Schnurrenberger thanks!
I forgot to add, EXCELLENT call in adding another bathroom to your 3 bedroom/1 bath. I had a neighbor with a 3/1 and they couldn't sell for the longest time. They put in another bathroom in the basement (there just wasn't a good place upstairs) and I thought it was a waste because there wasn't really anything down there except a family room and storage, but they sold their house fairly quickly after that. Huh. Anyway, I knew I wouldn't buy a 3/1, but apparently I'm not the only one. Great call with that addition!
@Jody Schnurrenberger that was my thought process in adding a second bathroom. Now each floor has a very large bedroom and it's own bathroom. I thought it would help increase the rent and getting roommates to split the cost. Cost of adding a second bath was about $5,000. Assuming that helps me get an additIonal $100 / month in rent, that would be a 24% ROI.
Whereally exactly is your property in Harrisburg? That rent sounds a bit high for downtown apartment but the rehab loons great. Good luck and hopefully you can get it rent out quickly.
@Brenton Way Old Uptown Historic District. It's the area that has seen a revitalization over the past 10 years. There is a ton of space--the tenant is basically getting a whole house.
I just looked on Zillow and your place is close in price to some of the other 3 bed 2 bath places but honestly I didn't compare where each was located.
Where is your first property? I have two SFH but neither are right downtown.
Beautiful rehab! Hope you get it rented out quickly!
@Brenton Way I should be in the right range, just on the high side (But, I consider mine to be on the nicer end). First property is in Catonsville, Maryland (suburbs of Baltimore). I rehabbed that one too and got top dollar for rent and awesome tenants. Here's the kitchen from that one.
I wish that kitchen was in my house.
Great Job Cory! Those numbers are great! I’m in Pittsburgh trying to get my first and it’s been a roller coaster ride! What type of financing did you go with?
@Cory Iannacone the place looks fantastic, and you got that all done in short order for $27k. That looks like a place I'd want to live if I were in that market. Nicely done! Best of luck with the next phase.
I'd be interested to know how you financed it and more color on your rehab experience (e.g. what you did yourself vs. contracted out, what challenges you faced and how you overcame them, etc).
@Brenton Way So do I. It's nicer than my kitchen.
@Cliff F. and @Chris Jensen - I used a conventional loan. However, I did end up going with a 10/1 Arm (through portfolio lending) which allowed me to put down only 20% instead of the 25% required by Fannie Mae and Freddie Mac standards.
@Chris Jensen - I hired a contractor for all the work. Local guy with a handful of workers. Gave me a great price and was one hell of a worker. As far as my experience goes, this is only my second rehab. My first one took me about 7 months. This one I was able to knock out in a month because I learned a lot from my last one. I would say no major problems with this one. Largest challenge was the amount of time spent going to Home Depot to exchange materials and pick up new ones. Trying to become more efficient.
@Cory iannacone are you self managing the property in Harrisburg or are you using a PM?
@Brenton Way self managing for now. The whole property has been updated (so hopefully no true maintenance issues and there’s not much to do assuming I get a good tenant). But I budgeted for PM when running numbers.
Nice work! Looks fantastic.
Really nice man!! Looks like you did a great job putting your rehab money into the right places! Did you do the work yourself or hire out?
Congrats @Cory Iannacone . Great job!
Yes this rehab is awesome!
@Cory Iannacone Could you breakdown what you were able to get done with the 27k. I am trying to get an idea of rehab cost. I know it will vary from state to state and job to job but estimates would help.
Thanks and Congrats!
Thanks @LaShelle Stewart Here are my rough numbers:
Interior ($6,000.00), includes:
- electrical (replace all outlets/switches, fixtures, etc)
- plumbing (replace toilet, faucets, etc)
- repair damaged doors and carpentry
Exterior Paint ($4,000.00)
13 Windows Replaced ($4,000)
Carpentry (wood repair) - $2,000.00
Install additional bath $4,000 labor
Install vinyl plank flooring ($1,000.00)
Re-pour concrete pathway - $2,600
Keep in mind, this is the amount I am out of pocket. I financed materials through no interest deals, which I will pay off within 2 years. This includes:
Appliances - $1,700.00
Granite Counter - $1,300
Materials - $5,000
@Cory Iannacone , you said this rehab went so much faster because you learned so much from the first one. Would you mind making a post on what all you learned...and tagging me? ;-) We can all benefit from your experience!
You did a FANTASTIC JOB! Part of it is just how beautifully you designed it. What I THINK will look nice doesn't always...and that's just with my clothes. Hahaha I'm scared of trying to coordinate flooring with counters and walls and appliances and backsplashes...lol I mostly stick with post-rehabbed stuff or something that only needs one change. But hey, without customers who want to buy post-rehabbed stuff, you'd never make a dime doing the rehab. ;-)
Updated over 1 year ago
If you start a thread about all you learned, you can post a link to it in this thread so we can all go check it out! :-D
Great Job!! Did you get multiple bids for the work or did you work with this particular contractor from your last rehab?
I'd also love to hear all you learned from your first one to this one that helped save a lot of time and headaches. Congrats on your 2nd flip and keep up the work!
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