New BRRRR Property South Philly (West Passyunk)

29 Replies

Hi all,

Haven't posted a big update in awhile, but after completing a previous BRRRR 2 years ago, a flip last year, and a flip-up (personally) to a larger SFH, I'm now working on my 5th project in West Passyunk neighborhood of South Philadelphia.

It's a 3 bed / 1 bath, 1100sq ft row home. Was on the MLS originally for $150K, picked it up for $127,500 (View report) and I'm now in the middle of the rehab. Based on comps & market analysis, after refinancing (and renting out of course) I'll own the property with a 30 year note with NONE of my own money tied into the property, cash flowing a couple hundred a month (I do my own PM, place is getting overhauled throughout thus no major capEx for awhile). 

Since we are mid-progress, still have a lot to go including: Drywall (half the house needs it), painting throughout (neutral light gray tones), kitchen put back together, recessed lights installed (all LED), floors re-sanded and stained (original red oak on 1st & 2nd floor), etc etc.  Will post more photos/info as we get progress done over the next month.  QUESTIONS?  Feel free to ask

Enjoy the progress photos!!

Front of home on the day I closed--> now with awnings removed and new siding on bay window.  Awaiting paint for front door & window (mint green).  Thankfully roof was in decent shape, just needed touch up and silver re-coating.  Will be good another 5 years 

Kitchen: 20+ year old formica cabinets, black appliances and drop ceilings to 8' height --> gutted kitchen revealing original 9 FOOT ceilings and opened the entryway up more!   And yes I'll be putting in white shaker cabinets (uppers are 40"), SS appliances, Quartz, etc.  LVT Plank for floors etc in the future (also recessed lights)

Basement: Cleaned out, updated electrical, plumbing, and GAS (used to be oil) with new central HVAC unit installed and ready for hookup to the PGW line (waiting on PGW).  When done will clean everything up and paint the walls white, add more lighting.  Ceiling height is just over 7' so it feels really spacious

MBR: 13x11 with bay window.  Dark paint --> whole house will  be painted light gray/neutral colors throughout. Built a new master closet (his and her doors, with lighting)

Rear bedroom: added a big closet

Bathroom: keeping the tub (reglazing white), added new wall tile and fixtures, doing new vanity and LVT flooring

Looks good so far.

Master closets aren't his and hers - better to call them hers and hers ;)

In the basement I see you have some bare bulb fixtures. Better to put in fixtures with a globe to cover the bulb; they are like less than $10 each.

What is the expected rent and rehab budget?

@Steve Babiak thank as always for your feedback! Much appreciated on the recs for the covers (ceilings are about 7.5' high so I didn't even consider it, but it's a good point)

Rent I'm going to ask $1600/month based on recent comps (rehabbed 2/1s asking $1500).  It's definitely a solid $1500/month rental though. 

Rehab budget.. approx $30K (and based on purchases thus far and upcoming I'm pretty close on that budget)

You can't really put a globe on those old ceramic / porcelain light fixtures that you have in the basement; I just buy an entire fixture from the big box store for less than $10 and put that in instead of the bare bulb fixture. People can easily break bulbs when they carry stuff; code officials in one town where I iwn rentals won't pass an inspection with those old fixtures.

Great pictures ! can you please share which bank you use to refinance? do you have to wait 6 months seasoning?

yes, have to wait 6 months to START the refi process.  I work with Everest Mortgage Company (ask for Amy), off of Girard Ave in Philly

Update: finally got a drywall crew that was available and They will start later this week. PGW also called to schedule a new gas line installed from the street into my property which should happen in the next two weeks. Finally getting some solid progress. Should be ready for a July 1 rental

Looks good so far keep up the work what is the ARV?

$230K estimated. Although current on market sales (pending/under contract) are listed higher so I’ll see

Hey Mike, getting stuck how the total annual income for year 1 is calculated based on the report provided? 

Another question, how much did the gas line install cost from PGW?

@Gabrielle Gibson - not sure what happened. I did run the report as a BRRRR

Try this report.. I ran the rental property calculator using ARV value, etc.

https://www.biggerpockets.com/calculators/shared/342410/1b70fd30-309e-44d3-a6bc-46e387adc2e9

Gas line from PGW is free to my knowledge.  I already had a gas line running to the house, but PGW told me it was "decommissioned" a long time ago. However it's 1" in diameter so they are using it as a guide to run a new plastic gas line through it.  They have not said there was any cost associated, but now that you ask I will double check with them. 

There is no cost to PGW gas line . Done it numerous times with all bank properties. For some reason they luv to close off gas lines if the property is more than 6 months vacant. 

I am surprised its a 2 week turnaround usually its more  a month good u got lucky.

Cheers

Amit

Thanks @Amit Shenoy !

I actually sent in application with all completed materials about a month ago and they originally contacted me to install it last week but that was too soon with other work so rescheduled for next week. Yes overall lucky with timeline of everything though

UPDATE: Ran into delays with drywall crew but the work is coming out amazing and well worth the wait.  I won't have updated pix for another week (it's just new drywall installed.. I'm sure we can imagine what that looks like). 

In other great news.. it's already RENTED OUT at $1600/month.  Prospective tenants needed a place by July 1 and wanted to see how it felt; I showed them the place with most of the drywall installed, along with Kitchen renderings and samples of material I have ordered and they signed a one year lease!  Thankfully they're great people relocating from out of state and lived through a previous renovation, but wanted to rent for a year while living in Philly.  Really excited I have the place rented for July 1st. 

Will post up more updates later next week (Drywall will be done, painting started, kitchen/bath being put back together). 

UPDATE TIME! 

Progress continues. Hardwood floor refinishing starts tomorrow! 

As you enter the home.. new paint and recessed lights ready in LR. DR is getting a simple but nice chandelier. All rooms wired for cable and internet. 

One of many closets in the home

Upstairs hallway with recessed lighting 

Bathroom

MBR closet 

MBR

KITCHEN! Tall cabinets, appliances delivered today.  busy day! All GE appliances.. got a great Memorial Day sale at a scratch and dent store

Fridge cabinet (30” wide, freezer top)

Whoops looks like those didn't upload. Hopefully this works.  Also ADDED pix of floor sanding today (before/after photos.. no poly yet on it, but you get the point)

FLOORS starting to be sanded and getting ready for clear poly stain!

MBR sanded and ready for poly

Beautiful! Great work! Are you doing this while working another jobor are you a full time REI? If working full time, how do you coordinate everything?

@Kalyanii K. thanks!  I do this on the side while working a FT W-2 job (thankfully I currently work evenings so it's easier to do some activities in the early morning).  This is my 5th major renovation so at this point I have regular crews/subs I use for things and I keep everyone closely in the loop on timeline changes etc. They're all booked in advance, I give them a deposit and they're good about working with me as timelines change.  

With that said I will admit it's definitely difficult (not an easy thing to do by any means) and I definitely do a lot of email/texting on the go (sitting on the shuttle for work or during my meal breaks) and making early or late night calls if need be.  I've had conference calls while commuting to work in my car.  You make it work.. no other way to do it.

On the plus side, I do a lot of my renovations similarly, so after the 3rd house there's less situational questions about paint color or how I would like a problem rectified.  The contractors and I are all on the same page and most of the time they can adjust plans without needing my 'approval' for little items

Floors are done! Time to put the house back together now..

Well we are 99% done (have to finish closet organizers) but here's the final pictures! Reno costs ran about $35K (I do a lot of labor on my own and with a family member) thus the low cost of this.  And it's rented out! Tenants moved in today.  Enjoy the pix!

Great pics Mike B. It is nice when it all comes together. I hope your tenants are stellar and take great care of the property. I am in the Philly market as well do you have any contractors that you could recommend? I know in your last post you said that you do a lot the work yourself but do you have one that you could refer to me?

THanks @Hanif Ahmad - I only have some subs; I do a lot of the work myseld or with my father in law (retired contractor), so I don't really have any 'full service' people

Great pics mike. With regards to the material, where do you purchase? It’s a choice of having great looking kitchen, bathroom etc but within budget.

@Rao Mu - I shop around everywhere for the best deals. Some stuff online.. big items I just got to Home Depot or local supply store. It all depends

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here