Renovations as Cashflow Killer
Hi. I recently bought a triplex for $235,000. It is fully rented and each unit rents for $725. This is my first rental property and I'm not sure how rentals should look. I mean I fixed it up to where all safety issues that the home inspector found were fixed. In addition, all non-functioning items were fixed. Having said that, the cabinets are quite old and worn out and each units probably needs a renovation. I won't be surprised if it took around $6,000 to renovate each unit.
But here's my question. At $725 a month, how will I ever make this up if I spent $6,000 renovating each unit? This will kill my cash flow for several years!
Did I do it all wrong? I got conventional mortgage on this triplex. Should I have tried to fix it up first and somehow tried to get the cost of the renovation included in the mortgage? How do people do it here?
I typically hear people in the podcast buy beat-up properties and then fix it up. How do you do this when doing conventional mortgages?
Can I get a HELOC on my primary residence for this purpose? Can I fix it up and then re-finance?