First Rehab to Rent Property

38 Replies

Hello BP,

I am going to do this thread as a thank you to all the help I have recieved from others on this site, and I am hoping it will help others to see me go through this process.

Intitial closing and lessons learned here :

Now for the rehab since I am now the owner of this 1960's 3 bed / 1.5 bath home.

( I am hoping that the picture is rightside up as it is showing upside down currently as I am typing)

This is a rough mock up of the layout of the house

And here are some initial pictures of the inside of the house.

Living room (pictures are upside down again, if you open in a new window they are right side up though)


Dinning room (opposite of kitchen)

Bedroom #1

Full bath

2nd bedroom

half bath (jack and jill to bedroom 2 and 3)

Bedroom 3 (master or at least biggest)

Dinning room to living room with partial kitchen

back of house with a shot of the covered porch.

So that's how this project started, I went out to contractors with the following SOW

This was my first experience going to to bid for contractors and I saw the range of contractors from folks that were professional to those that well were not.  I was thinking about doing most of the work on my first rental my self ( I really enjoy the process of fixing up property, and working with my hands) but after having our first baby 3 months ago, my time is better spent with my new family.  I never thought what I did as a hobby for friends would cost so much to have someone else do!!!  I got bids that were all over the place but finally selected one that quoted the labor (minus a couple of the items in the SOW for 7,800) and a 2 week time line weather permitting.

Next post will be progress on the rehab.

if you click on the pictures they are right side up :( I am not sure what to do about them on the post as I tried turning them first and then uploading them and they were still upside down.

So the scope of the project got a bit bigger after looking around and talking to some friends that are renters and I decided to switch the half bath to a full bath.

Layout of new full bath:

This takes the Jack and Jill bath and dedicates it to the master bedrrom, moves the closet (this is where the vanities will be now) and adds a shower.  Cost for labor and rough materials 3,800 and an extra week to the project.

This is a picture into the new full bath where the sink and toilet used to be with what was the closet behind it, which will be where the 2 sink vanity will be going.

Pocket door for bathroom entrance.

The original windows in front of the house were installed by someone that did not care about quality of install, no flashing, no sealer was used, and some of the windows were held in by 2 screws.  I have replaced all of the windows in the house and have increased the window size at the front of the house.

Old windows with dry wall cut back to accept the new window.

 New window installed.

In doing these windows the majority of the siding on the front of the house was also dry rotted so the front of the house is getting T1-11 siding now instead of the older style look.

I am debating on the siding above the windows (updating also to the T1-11 for consistency) but am wondering if once painted the same color it will not be as noticeable.

Flooring, Cabinets, and Appliances have been decided and ordered (thank you Black Friday). I still need to decide on the shower stall (if anyone has had luck with any certain kinds I am all ears) other wise everything has been decided just some things still need to be paid for.

Had to increase my electrical costs as we needed to add 2 circuits to the kitchen to bring it up to code with adding the dishwasher and bringing it into the 21st century.

Gutted kitchen with its new window

This will be the layout of the cabinets once installed

I had a meeting with an arborist on Friday for the massive pine tree in the back yard, unfortunately this tree will need to be removed as it is infected with bore beetles and posses not only a threat to my house but the house next door as well so it will be getting removed this next week weather permitting.  The arborist will also be trimming the palm tree out front and spraying the cherry tree out front for the bore beetles in it as well.  I hate to see trees get cut down but this tree is to much of a liability and it is not a question of will this tree fall but a matter of when.

that massive tree in the background is the ticking time bomb.

Well I think that about brings us up to speed with were the project is I will try to update early on this next week with progress.

Did you get a full written report from your arborist?  

@Thomas Vail  

I did not get a full written report, we walked the property (he had been out there once before to inspect the tree as I originally only wanted the tree trimmed and thinned out).  After he pointed out where the tree was infected and pointing out the spots where there was massive sap bleeding, I made the call to cut it down, he said he could just trim it up but the tree was going to drop at some point in the not to distant future (1-5 years was his estimate based on the damage that had already been done).  I will plant a new tree in its place or at least close to where it was in the back yard.

usually you get one from a professional licensed arb. But since you are taking it down.

What are the numbers on this deal?
(Cost, closing, repairs, arv, area rent)

@Justin C.  

Purchase price was 125k, by the time all of the rehab is done I will have put about 33k into the property.  the unit will rent for 1,300 a month as a 3 bed 2 bath.  If I wanted to sell it I could probably get in the 175-180k for it.  I don't plan on selling anytime soon, in the summer time I am planing on doing a cash out refinance to fund the next property I go after and continue to rent this one.  I will post more refined numbers once everything is said and done.

Updated renovation photos:

In process of taking out the infected Pine tree in the back yard.  These guys were extremely efficient and moved very quickly.

About ten minutes later

And then the next day:

I am amazed at how big the back yard feels now.

New picture from the front of the house, after the pine tree was removed and the palm tree trimmed.

Dry wall was getting installed today as well.  The plan is to have texture on the walls on Friday, so painting can start next week.

For those in the Sacramento area I am just glad the tree is down before the storm that is hitting us tonight/tomorrow.

This looks great! What area of Sacramento is this?

Looks fun I'm jealous. Yes it is getting pretty windy good thing you got that done.

Jason Hansen, Real Estate Agent in California (#02050529)

cool. Could you share the bids you got, maybe which contractors you did/didnt like (probably msg me)? There are some reo's up here that definately need rehab. My estimates are 50-75k. I guess i need to get off my butt & get real estimates

@Pat McGrath  I got bids that were all over the place as it seems not many folks understand  or are used to getting a full documented SOW to bid on it seems.  I used to post what I was looking for and had 5 contractors respond to come out and do quotes (I also had two other contractors in addition come out and bid).  After I sent them the SOW and walked the property with them I got quotes ranging from around 8k just for labor and some rough materials to 31k for labor and rough materials.  The most professional quote I got back was the 31k but they were way over priced for what I had as a budget and I believe they do mostly homeowner / higher end projects and so they can charge higher end prices.

The concept of asking folks to put a bid together for labor and materials for different items seemed to be a foreign concept to some of them while others understood.  My advice is to get bids from a few different contractors and attempt to get them to bid on the same thing and even set up a template for them to fill out (this is the only thing I can think of after my experience) so that you can easily compare the quotes.  I had to take each quote and dissect them to see which one was better as some included some items in their quote while others omitted them and I wanted to make sure I was comparing apples to apples instead of apples to squash.

@Chris Vail  Sounds like you really did your homework. Thanks for sharing because this information is very valuable. 

Thanks @Embert Madison jr  I am an analyst by nature with a devil's advocate view point. Which generally means I spend a lot of time trying to see the other side of whatever it is I am looking at to see if there might be a surprise waiting for me on the other side. But even with that I am still hitting small bumps in the road as I move through this process. You just need to have the mentality that they are only bumps and they can be overtaken and will pass.


Over the weekend I built all of the the cabinets for the house which I ordered from (got a great Black Friday price) and I am pleased with the quality of the cabinets, once they are installed I will post pictures of them.  Progress on the inside of the house has been slower than what I would like which is frustrating.  Mud for the dry wall was the first sticking point as it took much longer to dry than expected due to all of the humidity we have had lately with the rain.  Painting has also taken a lot longer than expected for the same reasoning.  Flooring should start on Friday and I am expecting at least the kitchen cabinets to be installed on Saturday / Monday as I currently have the counter top contractor coming out to make final measurements on the counters for the kitchen.

Lessons for the last few weeks:

When setting up your agreement with your contractor talk about the time line and don't take what their time line is for their word with out having some sort of clause that has contingency's of what happens when they fail to meet the time line they have given you.  This has been the most frustrating part of this journey for me so far.  I am some one that if I tell you something will be done in xx time frame  I will do everything in my power to make sure it is done in xx time frame and if I can't make that time frame I will update you with a new deadline with reasoning behind why the time line has slipped.  This has been like pulling teeth with my current Contractor.  I have accepted the fact that this unit will not be ready for Jan 1st like I was aiming (originally I expected the house to be done by Friday Dec 26th, which is 1 week longer than was originally quoted by my contractor).  This would have allowed me a few days to clean and market the property for this week (while final items were being completed) and place someone hopefully next week.  Since this is not the case anymore I am going to use the time in January to really take my time in looking for a tenant and possibly have a slightly larger pool of applicants for a Feb 1st move in date. 

How have other investors dealt with contractor time lines slipping (if you didn't have this in your agreement)?

I will try to take pictures on Friday or Saturday so I can post some new upside down pictures :).


The time line is taking longer than quoted but I feel like I am on the downward side of this hill :). Flooring is in except for the bathrooms, Painting is done except for some touch up and trim. Cabinets are installed except for the bathrooms, and counter tops will be installed tomorrow.  I switched to using my GoPro for pictures so hopefully they will show up right side up, I also like the wide angle shots it allows.

Kitchen Shot

One of the bedrooms which shows the flooring which runs through out the house except in the bathrooms.

Living room

Looks great! I like the grey you chose for the walls.

On contractor's timelines... I've found that anytime a contractor gives you an estimate on how long something will take, you should double it. (Mentally of course. Don't tell them you're giving them twice the time.) Even for my best and most trusted contractors. There's always SOMETHING that will slow the project down, whether it's the weather, an incorrect material showing up, dealing with the city building dept, or just plain old contractor incompetence. 

In my line of work, there is no extension of the timeline. The job HAS to be done on our schedule. If doubling the estimated time puts us over the "time budget" then we'll have a discussion on how to scale down the project (by simplifying the design, changing the size of a particular build, or switching to a faster-to-install material). I think building in a contingency for going over schedule in the contract would likely lead to more stress and unnecessary tension between you and the contractor. Just plan on twice the time, and if they actually finish when they say they will, you get to get that house on the market early!

Glad to see u purchased a property! The secret to make $$$ in California real estate  is to buy some.

Thank you Chris for documenting this rental rehab. I will probably be doing some minor rehabs as well once my tenants move out at the end of Feb. 

I have already learned a lot already from your post.

so whats the latest? Whats the amount spent so far & how far off original timeline ? :)

A house here got reo sold 12/26, completely rehabbed and just listed on the market. They are listing $80k more than what they paid so they must have spent less on the rehab than what i thought. Of course i assume 10% of selling costs go to the two realtors, closing costs, and concessions

Sorry about the gap in posting :( @Pat McGrath  I have taken over watching our new son and my focus has shifted slightly to getting our routine down :).  

Let see... My contractor has continued to blow timelines he has given me so Last week I filed a formal complaint with the California State Licensing Board (CSLB).  From what I can tell this will not be a quick process :(. However I thought it was necessary to go through these steps to hopefully insure this contractor does not do this to someone else in the future.  I will be driving by the property later today and will snap some pictures to post on here.  I will also be out at the house tomorrow afternoon to hopefully be putting on some final touches and doing cleaning so I can take pictures to post the unit to get a renter in (which I will not rush through).  On the next one I will be doing a lot more due diligence on the contractor I chose, as I have discovered that just because they have a license and are bonded does not mean they are qualified to do the work correctly or will do a quality job.    

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