First I must say how excited I am at finally being able to make my first diary post after so much planning, prepping, research, lamenting... You get the idea. Just to give some background, I've been lurking around on BP and other sites for nearly 7 years. I had the opportunity to jump in a few years back but allowed other things to distract me. None the less, this past July I purchased my first investment property and work begins this weekend.
Deal: Property was actually found on CraigsList believe it or not, it was actually one of the best resources that I personally found. It was more up to date than almost anything else, and I founds sellers on there to be pretty motivated. Anyway, I paid 11.7k (cash) for the property with the intention of spending about 25k on rehab. The rehab cost are coming from a HML i found on BP! Im a buy and hold investor, so these units will be rented once rehab is complete.
Property: The property is located in Baltimore city, unit A: 1/1, unit B: 3/1. I've opted to knock down a wall that divides one of the bdrms from the kitchen (in Unit B) to give it some living space (odd not having any living area). Pretty quite block with a church located directly across the street from my property. One of the first things I noticed when I first looked at the property was ALL the neighbors kept their grass cut. Upon meeting the neighbor two doors over, I learned she was also keeping the lawn cut on my property (another great sign).
Rehab: This property isnt a "major" renovation. The roof will be replaced, the walls in both units currently have plaster, they will be drywalled and the ceilings need to be resurfaced. The floors currently have hardwood (that cant be saved) so I will personally be installing laminate floors. Kitchens need floors, appliances and unit 1 needs full kitchen cabinets/sink setup. I'll also be upgrading both bathroms with new floors, new sing/vainty & showers. Full paint throughout the house (also doing this myself). Front soffits along with gutters will be replaced.
ARV should be around 55k (conservative) once its done.
Work begins this weekend so fingers crossed that nothing major is found. I've already had a home inspection completed on the house, which came out pretty clean. A few leaks from pipes in the basement, roof of course and a few other small things. *Inspection was done after the purchase because the seller wouldnt allow any clauses in the all-cash deal*. My GC has gone over it pretty good so Im not too worried. It certainly hasn't been easy but I've done a lot of due diligence to know my business, the numbers and what Im getting myself into. I guess my biggest hurdle was accepting I couldnt eliminate all risk or variables; there was a certain amount of "to hell with it" i had to go into this first deal with, otherwise I would have never jumped in. I become ok with the 'worst case scenario' and then just jumped in!
I will keep this post updated at least
weekly, thanks for reading!
Originally posted by @Troy Kelly :
... there was a certain amount of "to hell with it" i had to go into this first deal with, otherwise I would have never jumped in. I become ok with the 'worst case scenario' and then just jumped in!
Troy, I had that same moment with my first property. After overthinking everything that could possibly go wrong, I had to say "to hell with it" and get in there. One of the best decisions I ever made.
Can't wait to read you future updates. The place looks nice on the outside.
Hey good luck. My buddy has been buying in Baltimore and making some great returns.
A good way to save a few bucks. My Ben more and sherwin William paint stores have oops paint. I usually don't spend more than $5 a gallon for high end paint. The only colors I ever spend for is the semi gloss trim and the ceilings white. I just scored 15 5gallon of the same grey beigh for 12.50 a 5 galling bucket. It was made for a college and they decided they wanted satin instead of flat. Every rental I have will be that color. Best of luck to you. Btw home dept has a nice laminate for $.89 easy to install .
Greetings Troy and Congrats on your first purchase. I would definitely like to see some interior photos. What area or zip code is the property located in? I am a buy and hold investor as well and most of my purchases are foreclosures under $30,000. Who are you using for your HML and your inspections? Sometimes I will get an inspection done before I even make an offer. Are you planning to rent to a Section 8 tenants? I can recommend a good company for tenant placement and property management if you need one. Good Luck.
Congrats Troy. I am learning and looking for my first buy to flip... but nothing yet.
Good luck !
Congrats. I will be following your posts. I will be looking forward to the after pictures. I am having the same problem second guessing myself. I need to jump in at some point. I am hoping to do it soon.
Thanks everyone for the support! I tell you, there's nothing like a good support system, especially when your doing things on your "own".
@Eric Hrlbock- great tip, Im going to swing by my local S.W. and see what they have available!
@Tariq Larue- You and I actually emailed a few times, you referred me to you HML guy who I ultimately used! S/O to you for that, thanks again! Im in the 21215 area. It wasnt necessarily my target area, but happened to work out pretty well. Yes, looking to go for section 8, my GC is great, he's up on all those codes and is rehabbing with that in mind.
I'll try to get more pictures up later today.
Originally posted by @Troy Kelly :
"my GC is great, he's up on all those codes and is rehabbing with that in mind."
You'll have to refer him along if all goes well!
Greetings bro, looks like West Baltimore. Good luck with the project. Good returns if you can keep some solid tenants.
As promised, here are a few pics.
Unit 2 Kitchen
Sorry about the multiple posts, I just cant quite figure out how to attach multiple pics? Anyway, here is a link to the roof that was just completed yesterday! Super excited, it looks great.
Work begins on the interior today. New walls (currently they are plaster) and resurfacing the ceilings.
Good job jumping in, definitely a lot of work to be done on the rehab, but once you get tenants in it'll feel like a great accomplishment!
Great work @Troy Kelly . Can't wait to see more pics!
Ok everyone, a quick update:
The first floor is nearly complete with drywall. We did run into a few issue's with plumbing, about 11ft of pipe had to be replaced. This pushed work back a bit because one of the pipes was leaking and still soaking into the old plaster. My GC cut me a serious deal on this one - Charged me $750 for a job that was well over 2k (from what he says).
The 2nd floor (not in any pictures just yet) is about 1/4 the way done. Spoke with my GC this morning and stressed we had to have the first phase of work done (roof, drywall on both floors) by the middle of this week so I can get my HML guy to disburse my first set of funds. I've placed the first portion of work on my AMEX and it has to be paid by the end of next week! So things are tight but were looking 'ok' so far.
So far things are going relatively well aside from the plumbing "surprises" which set back some of our progress.
After the drywall is complete, I will begin paint, and floor/bath/kitchens will get underway.
Here is a link to the reno. I'll just continue to throw new pics in there as the work progress.
It has been quite some time since my last update, in fact, I haven’t really been on BP in quite some in general. Lots of information to pass along, many many up’s and downs since my last posting so I’ll try to lay them out as concisely as possible.
To give a quick general overview, the rehab has been going well, I’m nearly at the finish line and excited about the prospect of being completed in another month or so. Im in the process of laying down the laminate floors now, I still have to change out some light fixtures, order cabinets for the 1-bdrm unit and a few minor things, but other than that, both units are nearly ready to go. If I would have to say what my biggest lesson thus far has been, I would say managing my expectations of everything (including my own level of “craftsmanship” and what I expect out of contractors). Another huge lesson is that the advice received from others on the forum is not only invaluable, but right on point in most cases. Going into it, I had read (before actually doing any rehab) that finding good, honest, reliable contractors was one of the biggest challenges- I cannot agree with that more! Nearly every single contractor I’ve used either left before the work was finished, agreed to specific requirements but failed to meet them, or quoted and agree to one price, only to up-charge upon “completion” of work. A lot of that could have been avoided but I’ll get to that a little later…
Contractors- So in my last post, I was happy with my contractor and said I would update: Well, unfortunately it didn’t work out with him. To sum it up, because I wasn’t more specific in what was written on the ‘work description’ of the invoice, I couldn’t definitively say “you are absolutely wrong” ,however, what he and I verbally discussed, as well as what was written on the invoice were in sync with what I was saying. Again, I cant say enough how specific’s (in writing) make things so much better. This was my first rehab and first time dealing with contractors on this level, so as much reading and hearing others stories on BP as I did, it just didn’t sink in. I thought because I had a previous dealings with this GC I didn’t have to do all that “extra stuff”- WRONG. The contract/invoice is to protect both you and the contractor. In short, he had two crews working for him, his more ‘robust’ crew was on another job that was no doubt his bigger money maker of the two and his skeleton crew working my job. Basically the skeleton crew (1 older gentlemen) was there just for show, so that he could say he’s ‘working’ the job but really was really functioning as a place holder. It was taking him weeks to do the most simple of things. Months had gone by with little to no work done. Each time I would confront him about it, I received the same excuse “Im working it”, “Don’t worry about it”, “My guys are on it”… Then there was the discovery that I was being charged $300/board to hand drywall! He literally tried to convince me that was the going rate, however with a quick search of Cragislist I had easily found 4 contractors that were hanging board on an average of $25/board. I told him, even if you doubled, hell, tripled that price, I would have been ok with it, but 1200% markup was outrageous!
Your probably asking yourself, why didn’t you fire him earlier? Well, again, this was my first property, I wanted to maintain the relationship and not be too hasty to fire anyone, so I just kept trying to hang in there. But finally I had reached my limit so I fired him.
Individual Contractors: After letting the GC go, I had to figure out how to get the rest of the work done. I had decided another GC was not something I wanted to do (although Im sure there are lots of good GC’s out there), I wasn’t in a place monetarily or timeline was to hire another GC. So I was looking for contractors on an individual basis.
Drywall: First thing was to get the drywall finished. I had a couple folks from Craigslist as well as Angie’s List come out and quote me. They were pretty fair in most cases. I decided on a guy, agreed to his prices, setup a start date and… Nothing. No call, no show, nothing. So I went to the second guy, nearly the same thing, except this time, he wanted me to get scaffolding, to finish the ceilings or setup some type of ladder system so he wouldn’t have to use those stilts because, and I quote “I don’t want to fall while on those stilts and have to sue you”. Needless to say, I told him “no thanks” and that decided then and there I would just do it myself. It took a lot of time, and there was a slight learning curve but eventually I got it figured out. I finished up the drywall (with the help of a buddy who knew nothing about it either) and knocked it out.
Plumbing: This is actually a bright spot in the story. Doing my normal search I came across this guy on CL. Saw some of his work, liked the vibe when I met him so I went with him. Because of all the bad experiences, I had contracted him to just do the upper unit bath remodel to see how things went. He was extremely thorough but a little slow. During the nearly two months it took him to complete the upper bath, a friend had referred me to another plumber who was “really good and super fast”. I met the guy (right around Christmas), agreed to a price and had him start the work. He literally knocked the work out in about 3 days. I was super excited. However, he was supposed to return to complete the finishing work after I had laid floors and reinstalled the tub. Unfortunately I paid him the full amount (seeing as how all he need to do was reinstall the toiled, connect the sink back up and install shower head), well, he never came back wouldn’t return my calls and I haven’t heard from him since. Lesson learned, no matter how close to finish they are, DO NOT pay for the entire job, until the ENTIRE job is finished. Well, plumber 1, he’s still working away at the upper bath, going slow but extremely thorough and detailed. Doing everything I asked. He finally finished the upper bath (after nearly 3 months). Because plumber 2 took off, I ended up contracting him (plumber 1) to finish the other plumbers work (which is still in progress).
Paint: Paint is completely finished. This again was another.. learning opportunity we’ll call it. In my desire to make the house as “perfect” as possible, earlier on, I decided to try to strip the paint from all the casing on the upper unit (note pictures of pink casing), this turned out to be a TERRIBLE idea. Because there was nearly 100yrs of paint layers on the casings, it took multiple coats and of stripper to even penetrate. Once it did penetrate, it didn’t just “wipe off” as the stripper advertised (CitriStipper). It had to literally be scrapped and sanded off. Additionally, because so much stripper was used, it made the wood extremely soft, so when any type of chisel or sander that was applied, would cut deeply into the wood… It was literally a nightmare! At that point, I knew I couldn’t do it alone or at all, so I found a paint contractor, hired him by the hour to help prep the walls and casing for paint. Seeing as how this was going to take a massive amount of time, I inquired how much he would charge to prep and subsequently paint the entire house (including finishing the casing). His quote was 1300+materials. I agreed. He was fast, efficient and handled business. This is where the expectations came into play. Because it was a house with plaster, and some wall were decent enough not to have to drywall over, we agreed to just smooth them out with some mud. Again, because my lack of documenting exactly what I wanted, I came in the house one day to find he had painted, but didn’t smooth out many of the very rough spots we had specifically spoken about. He assured me he would smooth the spots out and that he painted to see where the really rough spot where but would absolutely take care of them. Well, he finished painting the entire interior, including getting the casing as smooth as humanly possible but didn’t paint the bathrooms. He asked for $1200 before completing the work because he needed some type of payment. Because I’ve seen that show before, I paid him 1k with the final payment upon completion- After he received his payment, he never returned my calls or returned.
Lessons Learned- There are so many invaluable lesson's, the biggest is that all could have been learned by just following the advice that others have given on the site. Even if it seems unnecessary or burdensome, it's really in your best interest to read as much as possible and avoid the pitfalls others have detailed on the forum. Always get an itemized, detailed description of work- Always, no matter how small the job. That way, there is no misinterpretation of either side. Don't be afraid to try and do work yourself. At worst, you can always have a pro come in and correct it. There were so many things that needed to be done with this house, that I frankly couldn't afford to have done by a pro because of budget constraints etc.. Because I ‘had' to do it myself, it forced me to face things that I wouldn't have if I had the money to pay someone else. I just recently finished Damon Johns book "The Power Of Broke" and it couldn't have been more timely, I highly recommend it. I had no idea I would be so good at drywall, laying tile etc., I would have never figured that out if I had the money to pay someone, but because I had no other choice, I figured out things out and made it happen. Another thing I would do differently is not getting a HML if at all possible. It certainly has helped, but overall, waiting for funds to be released and having to get someone else to ‘ok' my work progress before getting the money I need to keep going is a real hang-up. Next time, I will likely try for a personal loan.
Overall- Most major items are completed, painting is done (I completed the bathrooms and some of the finishing’s), major plumbing is done, all roof leaks have been patched. The floor in the upper unit was sagging, I pulled up the sub-floor, leveled and installed laminate flooring. I have tiled both bathrooms floors and walls, tiled the shared entrance and completed the flooring in the upper unit. Still to be completed is the flooring in lower unit, cabinets in lower unit and light fixtures in each room. Still need to complete a few finishing in the upper unit to have it ready. The good news, I have prospective renters for both units.
Im likely leaving out a ton of information, and trying to bang this out as fast as possible as not to push it off any longer. Please forgive any grammatical errors or non-coherent thoughts. If you have any questions or suggestions, I'm an open book, please feel free to ask or comment. I've learned my lesson about not listening to the many thoughts/idea's from my fellow BP members.
thanks for reading this extremely long post and I look forward to the any suggestions. Check out the pics!
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