Diary of a Cleveland, Ohio Flip

33 Replies

I started a thread elsewhere and realized it was in the wrong spot, so I’m moving it over here.

We’re about two months into a flip we’re working on in eastern suburb of Cleveland Heights, Ohio. I’ll do my best to catch you up! The home is 3,800 sq. ft. (large third floor) and was built 100 years ago. It's been owned by the same family since it was first build (a rarity in Cleveland Heights). The property is located near the Cleveland Clinic, University Hospital, University Circle, Case Western University, museums, etc.

I fell into this property as a result of a relationship I established with a local investor. He's been my "mentor" for the last year and after seeing my success in purchasing several rental properties, he decided to let me manage two flips for him. He purchased this home two years ago with the intention of flipping, but shortly thereafter bought a large apartment complex and put all of his crews on that job, As a result, this home has been sitting vacant. He's given me extremely favorable financing terms.

Here's a look at the financials:

Purchase Price: $72,000

Rehab Expense: $126,000

Holding Expense: $7,000

Interest Expense: $10,000

Selling Expense: $23,000

Foretasted Selling Price: $289,000

Projected Profit: $50,000

Here is a shot of the exterior:

A few interior shots: 

A few more exterior shots:

Here is a summary of SOW.  We were originally about $10K higher, but were able to realize savings on interior/exterior painting. 

Windows 7,775
Kitchen 16,150
Family Room 600
Dining Room 500
Library 1,250
Sun Room 2,800
First Floor Bath 850
Master Bedroom 4,500
Master Bath 10,277
Second Floor Bath 2,300
Half Bath 200
Basement 2,800
Third Floor 900
Exterior 1,250
Electrical 9,000
Interior & Exterior Paint 10,000
Hardwood Flooring & Bedroom Doors 10,250
HVAC 23,253
Plumbing 12,000
Other Misc 9,550
Total 126,205 

Hmm...lets try that again.  

looks like you have owned it for some time.  Leaves are still on the trees.

@Brian Johnson  We started construction on Nov 1, so we're a solid 2 months into rehab. I'm playing catchup on the postings :)

Old homes in Cleveland present interesting problems, especially with the intention of flipping. One of the most common characteristics of homes built during the 1920-30’s is the lack of bedroom space. In the early 20th century, families typically spent their time together on the first floor and rarely retired to their bedrooms for anything but sleep. Living rooms and dining rooms were huge, but bedrooms and kitchens were tiny.

With that in mind a quite a bit of space to work with, we’ve decided to do a little bit of rearranging on the second floor. The home has five bedrooms and two full bathrooms on the second floor, none of which are all that big. As you can see in the architectural drawing below, we’re turning the home into a four bedroom property.

The current plan is to create a large master bedroom that makes up the entire right side of the second floor. The cost in doing so was pretty nominal (demo two closets & build two walls), but I think it adds tremendous value and appeal to the property.

Here is a shot of the new doorway and demo'd closets - looking at the ceiling you can see where the closets once separated the rooms. 

@Zoran M.  

This is great, thanks for sharing this!  I'm hoping to start my own deal diary soon.

It sound's like you've cultivated a great mentor relationship, how did you meet your mentor?  What sorts of things did you do to establish a good relationship with him?

It seems like there a lot of newbies out there trying to go it alone, and I think we could all benefit from spending some time working under experienced investors.

Can't wait to see more pictures and updates!

Originally posted by @Andrew Davis :

@Zoran M. 

This is great, thanks for sharing this!  I'm hoping to start my own deal diary soon.

It sound's like you've cultivated a great mentor relationship, how did you meet your mentor?  What sorts of things did you do to establish a good relationship with him?

It seems like there a lot of newbies out there trying to go it alone, and I think we could all benefit from spending some time working under experienced investors.

Can't wait to see more pictures and updates!

 I initially paged around bigger pockets to see if I could find a mentor, but there really weren't too many investors in my local area who I'd consider to be "very big."  Instead, I jumped on LinkedIn and looked to see who was involved in RE in my local area.  This investor also happens to own a large number of apartment buildings near me, so I always would see his signs in front of his buildings.  

I sent him a message on LinkedIn asking to meet and his response was "I'm always willing to help those who want to help themselves and will buy me lunch. When do you want to meet?" We met a week later. 

Honestly, it's probably been the best decision I've made in RE thus far.  We're more friends than anything else at this point. 

Here is a another view of the master bedroom in our Cleveland Flip.   Note that this view would have been obstructed by the closets that previously separatedthe two rooms. You can see we added a master closet! En-suite bathroom to the left. 

Demo is largely completed at our Cleveland flip and we're slowly starting to put it all back together! 

Demo’d butler stairwell in the kitchen and closed off access. Increased size of the kitchen dramatically!

Cabinets gone. Drywall gone. New electrical being installed. Oh, and 10 foot ceilings!

New can lighting being installed in the living room. We removed numerous sconces throughout the room in favor of overhead lighting.

This used to be a four seasons room which was enclosed at a later date, but some of the exterior aspects remained. We removed / closed off some of the windows and framed over a door which was an awkward second entry to the first floor bath.

Kid’s bathroom. Drywall removed in preparation for new plumbing. Window over tub closed so we can have a full wall of tile! The cast iron tub is almost 350 pounds!

Last week we passed our plumbing and electrical inspection.  We had all new plumbing installed in the house.  We also ran all new electrical (incl. new panel) for the kitchen, living room and most of the bedrooms.  We also had new light fixtures installed in all of the bedrooms, which were previously lighted by wall sconces.  All of those wall sconces were removed. 

With plumbing and electrical done, we have the go-ahead to start installing tile.  We started with the kids bathroom.  Look back at my previous post - it was the bathroom with the clawfoot tub and window! 

We are using Implerial Gris Gloss 4x8 tile from The TileShop.  The advertised price is $7.99/sq, but with our discount we were able to get it for $5.98/sq.  I know the tub looks small, but its 5ft across.  We have 9.5 foot ceilings :-) 

Wow, @Zoran M.  

What great fun!  Thanks for letting us share in watching the place come to life.  I wish I had documented my first rehab last summer like this.  I did before and after videos, but this level simple detail is much better.

Thanks for sharing!

-Mark

Looking great, thanks for the photos.

Drywall starts today! We should have most of the patchwork done by the end of the week.  

After a walk-through with my wife and our Realtor this weekend, we've decided to make a few design changes in the master bedroom. 

Foremost, we've decided to add an inset electric fireplace in the small bumpout pictured below.  The chimney for the first floor fireplace used to run through the closets, but since we removed those to create a large master bedroom it became a bit of an eyesore.  My plan was to drywall over and be done with it, but of course my wife wanted a "wow factor" for the bedroom. 

Here's what it looks like currently:

We will be installing a TBD stone veneer from The Tile Shop. The fireplace we're using is the Dimplex Lacey...about $400. All told, this change order is setting me back about $1,000 in material. This is the look we are going for: 

Looks like you have done everything possible to make this house beautiful. Great job.

The second design change my Realtor and wife requested in our Cleveland, Ohio flip was to the master closet. It's currently about 3.5 feet deep, which is a decent size but given the window placement it does not provide much space for shelving. What's more, my wife griped that the areathe new closet is "dead space." I thought of it as a sitting area, but alas my wife scoffed at that option. While I pushed back on increasing the size of the closet as drywall started today, ultimately she prevailed. Overall, I do agree – the larger closet will definitely be a selling point.

The plan is to move the wall from behind the side window, to just in front of it. We’ll keep the HVAC where it currently is and move the electrical accordingly. 

Total cost is just a few hours of labor – about $150. 

The second design change my Realtor and wife requested in our Cleveland, Ohio flip was to the master closet. It's currently about 3.5 feet deep, which is a decent size but given the window placement it does not provide much space for shelving. What's more, my wife griped that the areathe new closet is "dead space." I thought of it as a sitting area, but alas my wife scoffed at that option. While I pushed back on increasing the size of the closet as drywall started today, ultimately she prevailed. Overall, I do agree – the larger closet will definitely be a selling point.

The plan is to move the wall from behind the side window, to just in front of it. We’ll keep the HVAC where it currently is and move the electrical accordingly. 

Total cost is just a few hours of labor – about $150. 

Thanks @Engelo Rumora  - that's what happens when a house sits vacant for two years! 

It's everywhere - the floors, the walls, hand rails, etc. 

Suffice it to say my painter is thrilled about all the work.  Ha! 

We buy them pretty, don't we? 

I realized I didn't list a few items:

  • Bedrooms: Four, with option for a first floor master (so possibly 5) 
  • Bathrooms: Three full, one half 
  • Sq. Ft: 4,200 incl. finished third floor. 
  • Stairwells: There were two (master & butler), but we removed the butler stairwell
  • Garage: Detached two story 

Am I missing anything? 

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