that’s awesome. Do you find flipping the multi families more difficult than the SFHs? Obviously you are having success or else you wouldn’t continue focusing on that target market. If you ever want to partner on something let me know!
@Pat McCandless We have a solid infrastructure in place to deal with the tenants and the unique kinds of maintenance issues that come up with a multi family house as opposed to a single family so we do not find them any more difficult than a single family.
New Britain, CT 3-Family Rehab Update
- Below are pictures of the painting we did on the 3rd floor unit which is completely painted. Tomorrow painting will start on the common area. We used our typical painting scheme that will stay the same for the entire project: navajo white from Sherwin Williams on the walls and white trim and ceiling paint from Sherwin Williams also.
On tap for next week:
- the electric baseboard heat for the 3rd floor will be installed
- bathroom flooring in the 3rd floor will be installed
- later next week or early the week after we will finish the existing hardwood flooring in the living area and bedroom
Hi Michael, great post, thanks for doing this. Would you mind elaborating a little on the infrastructure you have in place for managing tenants, and what kind of unique things you're seeing for maintenance?
@Michael Noto This is great! I love seeing how it all comes together. Love that paint color, I've heard others talk about it on BP before. You guys have a great system going!
@Carrie Angyal Thanks, Carrie! We have never had a tenant or buyer tell us they don't like that paint scheme so we keep using it.
@Pat Kelley My business partner and I manage 25 units of our own and plus my partner runs a full time property management company with 100 units under management. I mostly do all of the sales related aspects of the business for his PM business, primarily the filling of vacant apartment units.
Although it is good to be busy we are constantly trying to figure out better ways to manage our time and focus our efforts on high value tasks. To be honest, it gets hectic no matter how hard you try to systematize things, but we do our best to manage things that come up and figure out a way to handle the situation in a more time effective manner the next time it comes up.
Some of the infrastructure pieces we have in place that help us a lot are as follows:
- Background check software. We use rentscreener.com. The website allows the applicant to access the application through our website, upload their application docs (proof of income, copy of ID, etc) through the portal, and pay through the portal as well. These features may seem minor, but when we are filling 10 units a month it is nice to not have to chase around app fees and docs all over the place.
- Property management software. We use Buildium for our PM software to track income/expenses for flip projects, manage tenant info, track bills/invoices, and to track the bank accounts associated with our businesses and the PM business. Buildium has a lot of other cool features we take advantage of, but that could be a whole separate post to be honest. We have had a very good experience with them.
- Forms. We have templates for virtually every situation that could come up in the landlord/PM/realtor world. Some examples are: lease/lease addendum docs, deposit to hold form, Move-in instructions that a tenant gets when they receive their lease documents, a form for when we deny applicants, move out instructions, etc. Again we have a lot of forms, but those are the major ones.
- Docusign. We sign documents electronically through Docusign. Again this saves us a ton of time. Lease docs, contract docs for when our clients buy/sell houses, anything we need signed is done through there.
- Giving tenants the ability to pay online or with a card. This has changed our business for the better for sure. We accept rent payments or deposit to hold payments through our website or we can manually run payments on a card if tenants would rather call it in. Chasing payments is the worst. 70% of the people we deal with take advantage of this.
- Our office staff. We have 2 people who work for us in our office that are great and take a lot of the time intensive tasks off of our plate. Some of those include: bank deposits, checking the PO box, lease generation, writing of contracts, answering the phone when tenants call the office, and much much more. They manage the day to day logistics and do it very well.
- Our maintenance staff. These guys are great also. They work on our flips and they also handle the day to day maintenance issues that come up in the PM business.
None of this stuff I mentioned is really unique at all, but are all vital for us to keep growing.
@Michael Noto you are doing a great job along with your partner. Keep us posted!
@Michael Noto Thank you very much for such a detailed answer, I really appreciate it. Sounds like you have a great system going there.
@Pat Kelley Like any system, it is good until it isn’t. Haha.
Mike, did you have your attorney develop your forms or were they templates that you revised for your own use?
@Joseph Ambrose Documents like our deposit to hold form, lease and any lease addenda we ran by our attorney to get his feedback. A lot of our forms are just to keep us organized and save us time and are not legal in any way.
Just a quick update:
- The electric baseboard heat is being installed in the 3rd floor this upcoming Wednesday. Our electrician's estimate came in a couple hundred dollars less than what we budgeted for so that worked out well. It is not like we went in totally blind, we had a good idea of what the cost would be based on previous projects we had done with him. He is a very good electrician, if anyone needs a referral feel free to PM me.
- The rest of the 3rd floor apartment is pretty much all set outside of a stove we need to buy.
- The common area painting was started on this week also
- Overall we are finishing up another 2-family rehab which should be wrapped up this upcoming week and then from there our full crew will be dedicated to this project. Right now our focus is getting the 3rd floor and common area squared away so we can put it up for rent. Since the rehab is minimal we figured that was the best course of action until our guys can be there full time and at that time they can focus on the 1st and second floor rehabs.
Looks like this is coming out great!
@Michael Noto , Looks like you guys are making good progress.
If you were keeping this property, who would you use to refinance?
I assume it hasnt been 6months so the seasoning period isnt over.
Thank you @Cody DeLong
@James Denon On properties we have BRRRR'd in the past we have always found somewhere to refinance within the 6 month seasoning period, but it isn't easy especially if you are trying to refi into a LLC which we always do.
When we did our first BRRRR about 5-6 years ago now it took me about a month of calling most of the banks in CT in order to line up a lender that was open minded to what we were doing. Since then, we have worked with 2 lenders in the state and 1 of the national asset based lenders in order to refinance out in a BRRRR deal.
Feel free to PM me for some banks to explore. I am pretty sure we are not allowed to mention specific banks on here.
Great to see it all coming together!
Thank you @Andrew Syrios !
@Michael Noto Thanks for the great post.
No problem at all @Kyle McCall . I enjoy doing these.
Update for the 3-family flip in New Britain, CT
- The pictures below are of the electric baseboard heat that was installed this week for the 3rd floor. As i mentioned, this work came in a little below what we budgeted for.
- We had our HVAC contractor come out and quote us for replacing the furnaces for the 1st and 2nd floor. His quote came in a little bit above what we expected for a couple reasons that are extremely boring to explain, but long story short we think if we sub contract out the electrical work associated with the install on our own and go with forced hot air systems we will be right in line for what we budgeted for.
- Painting in the common area and the 3rd floor flooring work should pick back up next week. Once we complete that work we can get the money for the draw associated with that work.
Nice Michael, phenomenal job on breaking this project down step by step. You're making it look to easy.
3-family rehab diary in New Britain, CT Update:
Work completed since last update:
- The 3rd floor is completely rehabbed and ready to rent out. Should be going up for rent either tomorrow or early next week.
- Common area is completely completely painted
- We had 18 replacement windows installed in the 1st floor, 2nd floor, and the attic. 3rd floor already had updated windows
- The HVAC contractor is at the house this week and will be done with the 1st and 2nd floor furnace installs by EOB tomorrow. Both are new natural gas systems
- 2nd floor rehab is about 50% complete. The new countertop has been installed, half of the unit has been painted, the kitchen remodel is almost complete. This apartment had baseboard heat and we decided to go with forced hot air when replacing. So we ripped out the existing baseboard and replaced with trim. That is all finished.
- There were only two leaks in the water lines going up to the 3rd floor (major win if you ask me). Both of them were in somewhat awkward spots in the 2nd floor bathroom area. Now that those leaks are fixed we can finish the 2nd floor bathroom remodel.
- We just closed on a 2-family house in nearby Bristol today which for the houses we typically buy it is actually in good shape. Most notably there are actually nice appliances in the 2nd floor apartment at that house which we are going to use to finish off the 2nd floor remodel for this apartment. The unit we are taking them from in the Bristol house will be an owners unit so we typically upgrade those units to stainless anyway. Just a way to try and save a little money.
Upcoming work and plan:
- 2nd floor paint will be finished next week and after that we will work on the flooring for the unit
- The complete kitchen and bath remodels for the 2nd floor should be done within the next week and a half
- 3rd floor unit will be up for rent
- HVAC will be completely installed
- Hopefully the 2nd floor can be completed in 2 weeks. We would be happy with that I think. Then it is on to the first floor
Just to update draw schedule wise (draw schedule is towards the beginning of this post) we have already completed the work and gotten the draws for draw 2 (roof), draw 3 (windows), draw 5 (3rd floor/common area). Tomorrow we will request an inspection for Draw 1 (HVAC, plumbing) after the contractor finishes up the furnaces and hot water heaters.
I'll post some pictures tomorrow of the work that is completed.
@Michael Noto these posts are amazing. Thanks for sharing so much. I'm curious about your contractors. Do you employ them in house or contract them out? Do you keep them busy enough where you are a priority for them?
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