My partner and I were going to look at a small bathroom remodel one day when we drove by this house. We saw some pretty extensive fire damage, and immediately did some digging to find the owners. It turns out this house had been let go, and was bank owned just outside of Providence, RI. We thought it was a great location, directly on and off the highway, walking distance to a bus line, shopping centers in close proximity, and the commuter rail to Boston minutes away. Only thing, zero off street parking which scared us, but we rolled the dice and compensated what it lacked with a very low offer. After we got inside of the house, we realized that the fire damage was extensive, but only damaged a minimal amount of structural elements of the house. There was severe smoke and water damage, and an existing sagging second floor from the weight of the water, but we knew that was able to be fixed. What we also learned upon further inspection was that there were 2 other previous fires in this house. That was our ammo for the negotiation, plus everyone else that inquired about it was scared of the fire damage. My partner and I have been in construction for some time, and could see the extent of the fire. Also, being a firefighter, I could accurately assess how specifically the fire damaged the structural elements. Long story short... $40K for this multi.
Looks like quite the project. Good luck!
We stripped the entire house down completely, changed out all of the windows, and resided and roofed it. Once we got the exterior completely cleaned up, we immediately put a for rent sign in the window, and had tons of interest. We next focused on all of our mechanicals. Every pipe was ripped out, there were tons of holes in the walls, kitchens were damaged and old, you name it. This was a full blown 5 month rehab through the winter. We had lots of interest, but no bites on units for a couple of reasons... our big fear, the not parking, smaller bedrooms, and the fact that a lot of people can not imagine layout once something is complete. They need to physically see it, but we still had a huge amount contact info for potential tenants.
We didn't let this make us nervous though, we just realized that we needed to focus on two things, the mechanicals and how the property would show upon completion. So, we separated all of the plumbing, heating, and electrical. We went higher end with each unit getting its own on demand system. Every single wire, pipe, water line, heating element, etc was replaced and was brand new. Now we knew we had to focus on the second part, a cost effective but high end finish. This is where I have to dish out the credit to my partner 100%. He is a foreman for a large commercial construction company, and does tons of lighting design work on the side for bars, high end houses, clubs, etc so he knows the trends and really just has a knack for picking out cool stuff. We knew that if we could pump out a really modern looking product at a reasonable price, we could get them rented to quality tenants and build a demand despite the parking situation, and the moderately sized bedrooms.
So after a pretty large extensive interior rehab, we took steps to make it look modern, but cut some costs. We bought a lot of material in bulk, and got some better pricing. We bought stainless steel appliances, but we scored all of them on a Black Friday sale. In the lower units, we really did very nice higher end looking bathrooms which I do not have completed pictures of for some reason. (This bath picture above is of the top floor studio unit). All new 6 panel doors, crown molding in the kitchen, and the icing on the cake that got them rented... black hardwood floors. People went insane when they saw them. Completely a chance, but it worked out. We created that modern, lofty feel in a burned out old multi. We spent the money on making it efficient, and structurally sound, but put the money to work on the finish. As a result, we were able to choose from a large pool of tenants, and were able to fill 4 additional apartments in other buildings from the showings of all of the units in this building.
Awesome Brandon glad it worked out for you!
Now that the house is completed and has been 100% rented since the beginning of the year, it generates a positive cash flow of just over $2000 per month after paying expenses. We pinched every penny and tried to put the money where it would have the most impact on the overall value of the property.
Thank you Account Closed
Incredible job .. Was the property at risk of being condemned? If so, how did you deal with that issue? Could you provide the purchase price, repair costs and ARV? Thank you,
Absolutely @Adam F. RI has very poor follow through. For a property to be condemned, it really has to be blown out. Keep in mind that New England is a very dense area. Space is limited especially in cities, and the state is honestly poorly managed fiscally. Cities want tax revenue, so you can buy what you need to buy. Only thing is it is an expensive area of the country. City inspectors become familiar with all of us over time, so them shutting down a job after we have done a number of rehabs is unlikely so long as we pull the proper permitting.
I had a relationship with this particular bank, so we were able to purchase this property for $40k. All said and done, we were into it right around $110. We owe about $80k on it after throwing a little flip money at it. It was appraised at the refi just over $190k, but I am currently in negotiation with the owner of the undersized vacant lot next door. If I can grab that and create parking for the building, it should be worth roughly $230. I can acquire the lot for $15k, but the site work and asphalt is going to be around $25K. I'd like to be into the entire lot for no more than $40k, so we will see. This lot is useless to absolutely everyone else except the owner of my property, so I can wait him out, potentially to the point where I eventually sell the property. As long as I own the lot, I do not need to build it out and can get more value selling my property even with the raw land and option to create parking.
@Brandon Ingegneri Kick A#$ job, you deserve a medal and all the profits you earned for the vast improvement you turned this eyesore into a gem for the neighborhood and community its. Well done! Persevere.
Hey @Don Harris , thank you very much, but my partner deserves most of the credit on this one. He really led this rehab.
Hi Brandon- nice work. I think I had looked at this property at one point (right off 95 in pawtucket, yes?) maybe 2012. Later we drove by and saw the fire damage, and we're glad that didn't happen to us. I'm glad someone did something nice with the place.
When I had looked up the lot next door, it was owned by a small gc who has bid on a garage I designed for a buddy in oak hill.
Gotta say- I love the small town vibe this state has!
@Eric Army haha. That is great. Yes you are dead on.
@Brandon Ingegneri great turn around. I like the strategy you used putting the for rent sign up very early on and collecting their contact information. My question is did you end up renting to one of those leads ?
Thats a good question @Ceasar Blackman . Honestly, I do not think any of the units in that building were filled that way. However, one of those leads looked at another apartment in another building we had because she called after this building was filled. She liked the other unit, but it was small for her needs. She saw how we did our build outs, and took a completely unfinished apartment in a not awesome part of town. She waited until it was ready, and she moved in on June 1. Loves it!
@Brandon Ingegneri So it paid off in the end anyway. Cant beat the cost ether.
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