Remodelling to maximize properety value for refinance
We just purchased a 4-plex with a bad roof and one moldy unit for $116,500. We have a new roof scheduled to be installed in 3 weeks, but need to make some big decision on the other renovations. Each unit needs new paint, flooring and exterior doors. We're planning to put in Vinyl Plank Flooring ourselves and paint ourselves. The kitchens and bathrooms are in good condition, but they're out of date. If we leave them alone then we have the cash to remodel 3 of the units quickly and have them rented as soon as the roof is fixed. The 4th unit will take longer as we need to demo the living room, bathroom and bedrooms completely and rebuild it all. Should I worry about updating the windows, doors and kitchens or rent the units out quickly? We are concerned that we'll run out of cash and have to wait until next Spring to finish Unit #4. How much value does new windows and doors add or can this wait until Spring?
Purchase Price: $116,500 all in our own cash, no lending costs
Roof Replacement: $23,000
Flooring Replacement: $6000
Door Replacement: $4000 (all 4 units)
Interior and Exterior Paint: $750
Minor Siding Repairs: $2000
Demo Costs: $1000 (just dump charges as we're doing it ourselves)
Windows: $8000 (all 4 units)
Unit #4 Remodel: $10,000
Utility Carrying Cost: $150/mo
Insurance: $250/ quarter
Current Cash on Hand: $42,000
With 3 units rented we will have $2300 in cash flow/month to save up for Unit #4. If we skip the doors and windows then we can get Unit #4 rented this Summer increasing cash flow to $3000/mo. Would you potentially sacrifice the future appraisal of the property by not upgrading kitchens, windows and doors to get the property rented faster? We are set to refinance and take cash out in December/January of this year, but cannot do everything by then. Would you wait to refinance until everything is completely done?
The comps for this property are selling for $325,000-$350,000. We want to take back out 75% to really go after our investing. This is our first BRRRR and I welcome any advice you guys have.