@Kim H. I remember you talking about this deal. Always a good feeling to see a dream become a reality.
Now it's time to earn some sweat equity.
I can really see Seths point of view. As I daily scan some of the posts on here I come away usually with the thought most of the posts are seen thru "rose colored glasses' . I also think a good portion of these stories will fail. Whats missing intodays life is the "pay your dues' step. Most think they are going to leapfrog that learning portion of life and move right to the riches. The last downturn took no prisioners and from the type of posts found on BP my guess it would have taken 9 out of 10 of them out.
I dont know the posters story so really cannot comment on this case. My observations are as a collective. The only advice I can pass is get educated. I mean hands on educated. You wont find that on BP. You better learn the nuts and bolts of a home and network with others in your area to learn. Help the GC and be on site every step of the way. If you cannot do that imo you are far better suited for the stock market of those types of investments.
Good Luck to you on your project
You have a great strategy buying a down-market property in an up-market location. You will walk into strong good revenue for your intro price, your apartment will be largely renovated and your forward maintenance costs should be low so you will generate good operating income. Strong cash flow covers up a lot of mistakes, if you made any. You are going to be fine.
The only risk I see is carrying the property during renovation and re-population, but that is probably one reason you got the place for a good price.
You guys are tough.
I got a chance to walk through all of the units today (without all of the previous tenants' junk from wall to wall) and got a good luck at everything. The seller did a great job of cleaning the units and leaving them completely empty.
I am pleasantly surprised that all of the HVAC systems are fairly new, as well as the hot water heaters. In addition, it looks like I can salvage 4 of the 9 kitchens without replacing cabinets. I could probably get by without replacing flooring in 4 units. One of the units, I only need to tile the bathroom and kitchen. Just saved myself $10K in cabinets and flooring.
The only negative surprise I found was that the irrigation system is running off the electric in one of the units. I will either need to put it on a separate meter or somehow pay the tenant for use.... or change out the timer with a solar or batter powered timer. Not a big deal either way.
All of the electric panels look new. The plumbing needs work under all of the sinks and toilets, but I was budgeting to replace all of it anyway.
The exterior is in MUCH better shape than I thought. Only need to replace roofs on 4 units. The other 5 are in good shape.
So, I am feeling better already. Thanks for all of the encouragement... and the reality check.
Congratulations Kim H! I also remember you talking about this one awhile ago so it's good to see you saw it through. I'm sure you'll experience some pain on this but be very glad you bought it in the long run. One piece of advice I'd give you is to triage the units. Take the 3-4 best ones and get them rehabbed and rented right away. Nothing like some cashflow to make things look better :) Also gives you a chance to try out a contractor without committing to them for the whole job.
Congrats, Kim. I'd be happy to take a look at it if you want another pair of eyes to evaluate rehab.
That would be great @Jon Klaus if you have time. The property is in Lewisville so it's a bit of a hike for you. Maybe I could buy you lunch for your time. PM me if you want.
@Jeff Kehl I do like your idea do getting a few ready to go quickly. Only problem is the insurance. I don't have coverage for occupied units right now and I need at least 25 - 50% occupancy (I think) to get a landlord policy in place.
it seems you deal with a much different tenant type than I do, even so....I have always followed the principle that if it isn't there, the tenant can't destroy it. Be a minimalist.
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