My First Rehab Project

12 Replies

Hello, BP Investors!

I have a great mentor who I met from right here on BP, and he hired me to project manage a duplex renovation for future rentals. It was purchased by a foreign investor in Hong Kong who asked my investor/mentor to flip the property for her. He told her that I (me) will be project managing the renovation (yay).

The duplex is located in a lower income area, and it was vandiliized. So far today we did a walk-through and I got an inventory of what needs to be done to make it a decent rental. The next thing I will be doing is creating a project plan and budget spread over a 12 week period. I will come back here and periodically give you all an update on how I'm doing each week.

Here is a brief summary of what I gathered from the walk-through (applies to both units unless specified):

Get paint inspected for lead on the exterior, Repurpose hardwood floors, Replace all windows then board them up, Replace back door (unit 1), Full rehab in bathroom, Fix electrical panel in kitchen, Gut all walls and floor in kitchen down to the studs (unit 2), Repair hole in bedroom ceiling (unit 2), Add appliances and countertops, Replace hot water heaters, Rewire outlets, Add air conditioning unit, Fix plumbing in kitchen and bathroom, Paint entire house inside/out, Work on Landscape in the back, clean roof and gutters, add down spouts for gutters, add gas meters, and gut and redo the small balcony off the kitchen.

I would appreciate it very much if you seasoned investors will give me your input, suggestions/advice, and comments. You are more than welcome to chime in, getting different perspectives will help me out a lot.

Thanks!

@Teresa Keith

Hi Teresa,

When rehabbing in lower income areas they key is to get in and out as quickly as possible. Make sure you have all trades ready to go before rehab start and do your best to make the outside of the house look like there is no work going on (For example: Don't leave any trash in the front yard over night)

Also, don't overcapitalize on the work.

I like the saying "Nothing sexy, nothing flash just very fundamental"

Most of the tenants will not look after the property and a paint and new carpet will be needed after ever vacancy.

We bought and rehabbed quite a few in rougher areas but had great systems in place to make it work for everyone.

Thanks and have a great day.

Don't over renovate for the area. Usually granite and cherry woods are not required for rental properties. Keep it simple and clean you biggest budge should be on the plumbing and electrical if an is needed. Also do not under estimate the roof make sure that is looked at thoroughly.

Congratulations!

Hi Theresa.

First of all, I wish you luck with your project. It can be daunting to take on such a seemingly large project, but tackle each job and it can get done.

I totally agree with Engelo about making the place look un-renovated for as long as you can.

I have a couple of comments regarding the work you are planning. First, you mention that you are getting the exterior paint tested for lead. If you are planning on painting it anyway, I would skip that step. If it was built or permitted before 1978, chances are really good that it has lead. If it was built after then, no lead paint. If you are going to encapsulate the paint anyway, I wouldn't think it would pose a threat to the inhabitants. (I have no knowledge of the laws of your state, but a little research could save a lot of hassle...)

You say repurpose the hardwood floors. Do you mean refinish? If it is going to be a rental in a lower-income market, does it make sense to spend the money to repair, only to have them scraped up again?

"Gut all walls and floor in kitchen down to the studs" Why is this necessary? If the floors are unable to be repaired, replacing them makes sense. What state are the walls in? If it is just random holes, they can be fixed. Talk to a drywall person and see if it can be salvaged.

As for landscaping, minimum is key. Mulch, rock, anything that needs no water. Renters tend to not take care of the plants, and no need to spend money on plants that will die without water.

The last question is the gut and redo of the balcony. How much work is needed?

I am playing devil's advocate with these questions, but you want to make sure you are doing all the work you need to get the building up to code, but spending the least amount of money that you can safely spend, to maximize the return.

Good luck! I am excited for you, and can't wait to see your results!

@Engelo Lumora: Hi, thank you for your advice; this is helpful.

@Many Cirino: Thanks for you suggestions. After I put my proposal together, the some of main things that stood out as major is the electrical and plumbing. Also, we are going to use Linoleum in the kitchens and bathrooms; the hard wood throughout the rest of the units are salvageable, and can be refinished cheaply (they look pretty good).

@Engelo Lumora: Hey, I appreciate your questions and comments. I am going to check with the county about the lead paint; this is a 1920's home and I need to know the legal way to get it removed if there is lead. Also, I guess I should have said that the hardwood will be "refinished" because it is in really good condition which makes that labor cheaper than replacing in this case. Furthermore, the kitchen in unit 2 was badly vandalized and there is a lot of rot going on. The walls do not have minor holes in them, you can see severe damage (same with the floor). Also, for the landscape we are going to just trim everything down, and clean it up with a good mowing. Finally, the wood from the small balcony off the kitchen has a lot of rot, and is not safe at all, needs to come down and built back up. BTW: You were not being the devil's advocate with your questions, they made me think to make sure I am doing the right thing.

Thanks all, keep the comments and suggestions coming :-)

Omg...the last person I addressed above meant to be for Miny Jenson...sorry about that.

Originally posted by @Teresa Keith :
@Engelo Lumora: Hi, thank you for your advice; this is helpful.

@Many Cirino: Thanks for you suggestions. After I put my proposal together, the some of main things that stood out as major is the electrical and plumbing. Also, we are going to use Linoleum in the kitchens and bathrooms; the hard wood throughout the rest of the units are salvageable, and can be refinished cheaply (they look pretty good).

@Engelo Lumora: Hey, I appreciate your questions and comments. I am going to check with the county about the lead paint; this is a 1920's home and I need to know the legal way to get it removed if there is lead. Also, I guess I should have said that the hardwood will be "refinished" because it is in really good condition which makes that labor cheaper than replacing in this case. Furthermore, the kitchen in unit 2 was badly vandalized and there is a lot of rot going on. The walls do not have minor holes in them, you can see severe damage (same with the floor). Also, for the landscape we are going to just trim everything down, and clean it up with a good mowing. Finally, the wood from the small balcony off the kitchen has a lot of rot, and is not safe at all, needs to come down and built back up. BTW: You were not being the devil's advocate with your questions, they made me think to make sure I am doing the right thing.

Thanks all, keep the comments and suggestions coming :-)

No problem at all.

Happy to assist.

Thanks and have a great day

Congratulations, hopefully this will be the first of many.

For the paint outside when you say "I need to know the legal way to get it removed if there is lead." does that mean you will have to have the exterior paint scraped and removed? From what I understand as long as you don't disturb the paint, like scraping it, you can paint over it and don't have to do anything special so if it is in good enough condition to just paint that would be a lot cheaper.

Removing or patching drywall, replacing windows and that type of thing should require a certified worker following the EPA process if there is lead paint.

Are you gutting it yo the studs because of damage? Mold? If there is no damage you might be better off leaving the current sheet rock or plaster

@Michael J: The paint on the exterior of the duplex is in very bad condition, it is peeling badly and I do not think we can paint over it without it looking very sloppy, so it will definately need to be scraped off. I just need to find out if it is lead paint first.

@Brent Cox: Yes, the kitchen walls are badly damaged....the sheet rock needs to be replaced; some water damage appears on the walls so badly we do not want to paint over it, we need to make sure there is no mold behind those walls.

Be careful. If the exterior paint truly has alligated to the point that it needs to be completely physically removed... that's a very involved process that requires a lot of hand labor and some specialized tools - ESPECIALLY if you're going to do the project in compliance with EPA regulations.

This process is, in fact, so time-and-labor consuming that it can be a heckuva lot cheaper to simply remove the exterior siding and re-clad with new siding.

Unless there's some specific reason (historic siding, for example) that makes you want to retain the old siding... alligated paint is just a bear of a job.

And just to help the matter, here's a good image of alligated paint -

http://www.benjaminmoore.com/en-us/for-your-home/alligatoring

@Aaron McGinnis...Thanks for the helpful tips. So, if we go with removing the exterior siding, do you have to worry about EPA standards for lead paint, it there is any lead?

You do need to worry about it if the paint is flaking off and contains lead. At that point the guidelines are to tarp off the area and contain the spread of lead materials.

One of the nice things about removal and replacement is that once the material is completely gone, there's no real disclosure issue.

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