for 55K, ARV is 170K. If you have any advice for us newbies it would be greatly appreciate. We're hoping to put 30K into it, kind of hard for us to estimate. It needs new kitchen, flooring throughout, fix up garage, update bathroom and make new one, new windows, update elctrical, the rest is cosmetics. We're looking forward to the challenge, can't wait to see what we create.
No, we plan on hiring a lot of it out. We will probably do the little stuff like painting and landscaping. The house is in pretty good condition overall compared to many others we have looked at.
Residential Real Estate Broker · Los Angeles, CA · Member since 2008 · 10 posts · 0 votes
18y
Heatherp, 1st off congrats on the purchase. Make sure you have your timeline and budget in place because costs can add up quickly. Especially since it seems as though you have a lot to do. But it also depends on the size also. How long do you think before the work is actually completed?
Honestly, because this is our 1st project it's tough to say. Our guestimate is 3 months. Our outlook is if we make a profit GREAT, if we break even we will consider it a free education. I know from owning our own home #s add up very quickly. How many homes have you rehabbed? Was your first project a success?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
I assume you know your local costs and contractors better than me, but the estimate seems low. Kitchen redo, bath redo, add a bath, electric upgrade. All those are high dollar items, as I'm finding out on my rehab. Still, if you paid $55K for one worth $170K, you have lots of room. I'd guess you're looking at $50-60K in rehab. That should still give you a nice profit. Congrats!
The kitchen needs to be completely done as well as a half bath, as far as the 2nd bath, in only needs a partial redo. The same with the electrical, it has been started but not completed. We also need some new windows, many of them have been replaced already. I do agree 30K seems a little low but we're going to go through and try to determine what we need and what will pay off the most. Only time will tell. For me this is very exciting, can't wait to see how it turns out.
IBMally,
We are in Western MA, it was a bank owned property. Believe me, the deals here are far and few between, we've been looking for a while. Where are you located?
Heather, I'm in Western PA. Just about 30 days away from completing my first one. I have made the mistake of trying to do too much of the work myself. I have a day job and have treating the rehab as a second job (family is not seeing much of me the last couple months). I will definately farm out more of the work if I buy another one that was this bad. I got a good deal, but I had to pretty much gut most of the house. New kitchen, took it from 4 tiny bedrooms to three nice ones with decent closets. Whole house rewired (I did hire that out). New ductwork in the attic. New furnace, hot water heater, etc. etc.
Contractors are terrible to show up for appointments, but I had pretty good luck with folks who were posting on craig's list. Also got a pretty good deal on carpeting at home depot ($99 whole house install, nylon carpet @.98 / ft.)
If anyone needs decent cabinets for cheap, I also found that HD carries a brand that is not in their computer, but if you ask at the contractor desk they have a brand that is really inexpensive ( just ordered a 9X9 maple kitchen for $1,300, cabinets only).
My plan is to keep this as a nice rental property for about 10 years. Best of luck with yours, keep us informed on your progress.
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
18y
heather,
congrats on the first. Open your book, turn to page 5 and begin to learn. :mrgreen:
If the house is smaller than 1500 sq ft than I would think that 30K is real close to the actual costs. I recently remodeled a 1300 sq ft ( all new kitchen, added a bath, remodeled other bath, new flooring, electrical, hvac, new roof, and extras) all for roughly 25K. I did do about 70% of the work myself, though. Either way, with a spread like that then you should be in the clear.
Remember, every penny spent is one that is not earned.
We close on the property on 5/30 which has made getting estimates as far as work goes difficult because we do not have access to the interior. This is what we have done so far..
1. The roofer will be calling with an estimate tonight, I will post as soon as I find out. He will do the roof first week of June.
2. We will demo the place ourselves the first few days.
3. We have a painter calling this week to give an estimate on the exterior.
4. My father, (a pretty hand man, and retired) will be installing 7 new windows and supervising workers for $15/hour as well as doing any other misc stuff we need.
5. We will be installing bamboo floors ourselves 2.19/suare foot. I think home depot will be installing carpet in bedrooms if they still have the deal for 99$ installation for all rooms.
6. We will fix up garage ourselves, estimate apx $500.
7. We have called a dry wall crew and paver for the driveway. Trying to get estimate on driveway this week. Trying to get dry wall crew scheduled for 3rd week in June.
8. As soon as we demo the place we will make our measurements for the kitchen and start on that.
9. Our biggest concern is getting a plumber, I hear it's a nightmare.
10. As soon as we have access to the house we will also measure and order flooring. A lot is on hold until the closing. Then I'm sure all hell will break loose:)
If you can think of anything else we can do before let me know, I'd appreciate it. Sorry I don't have more details as of yet.
Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
18y
Sorry Heather.. I thought you already closed and had keys in hand. For not even closing yet, you are in good shape and ahead of the game.
As far as a plumber, ask some of the other contractors you have been speaking to. I found mine through another rehabber. He is a school teacher that does plumbing after hours. He didn't even know the rehabber that recommended him. You may luck out and find someone who does it on the side and will be more then willing to come in during the evenings for cash.
Our first roof estimate was $9800K, a little too much for us. We're going to look into laying new roof over existing roof, theyre is only one layer of shingles. Hopefully that will save us some $$$. We are calling others to put in a bid. How do I post pictures of the house? I'd love to show you all what we purchased.
We close on the property today, it was delayed a week, I'm sure the first of many obstacles in the near future. We've also increased our budget to 40K, the plumbing was a little more in depth than we originally anticipated. Here's what we have in place so far...
Demo starts today. The dumpster is there waiting for us.
The electrician will start Monday.
The plumber arrives next week. His estimate is 5K.
The roofer also starts next week, 5K as well.
We have purchased all the hardwood flooring on clearance $1100. We will install ourselves. Home depot will come on 6/11 to measure bedrooms for carpet, 200$ installation for all 3 rooms and carpet is 57cents square yard.
Drywallers arrive 3rd week in June, $2400.
Driveway will be paved 2nd week in July, $3400.
We are waiting for painters to give an estimate on exterior.
Appliances will cost $1800. (fridge, stove, dishwasher, microwave)
We have purchased all new doors for interior, 13@ $500.
We will install 4 new windows ourselves, others in house are new.
We still need to get estimates on kitchen counter and cabinets (can't get done until after demo) need to purchase 2 new toilets, new bathroom sink, interior paint, many misc. things such as ceiling fans, light switches, ect....
How are we doing so far? I'll keep you posted as thins progress.
Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
18y
Looking good.. 5K in plumbing?! Wow..Why so high?
I learned another valuable lesson on my current rehab that I will share.
When I bought the place, the copper was stolen, no big deal. Now the basement has a finished ceiling which means that I couldn't see the plumbing, but I assumed and most of these older homes have copper at the hot water heater, then it turns to black pipe and then back to copper to the fixtures. Not this place. It had very little copper and the rest is black pipe at the way to the fixtures.
The home has been vacant for 2 years and when the bank comes in, they blow the lines free of water and then add antifreeze to the toilets. So when it was time to turn the water on in this place, all of that built up dirt inside the black pipe fell lose and clogged up every shut off valve in the house. I pulled every shut off valve, installed new ones, turn the water back on, only to find out the lines running to the faucets were completely plugged.
After installing new flex lines, then I found that all my faucets, shower heads and toilet guts were clogged. I replaced all the faucets and stuff, only to have several more piece of dirt reclog the shut offs and faucets. Luckily I was able to just blow them out and reuse them. I spent 5 days working on the lines to get the water running freely again to everything. Next time I know to pull all the shutoff's and just let the lines bleed out into a bucket.
So on top of all this, then I found a 4' crack in the cast iron sewer line going to the upstairs bathroom and it just happened to be located behind my kitchen cabinets and sink.
Just something to keep in mind when you are rehabbing. I certainly wouldn't want to even think about paying a plumber to do all these fixes.
Update: Demo is complete. Plumber is finished. (only $3500, much less than we anticipated) We've put up a wall to create 2nd bathroom/laundry room. Roofer and electrician will start tomorrow. We should have estimate for kitchen by the end of the week. So far we are on schedule and within budget.