All Forum Posts by: Barbara G.

Good advise Michael BUT I don't know what section it is in?  Its on Meridan Road in Waterbury.   It looks like a big apartment development is being finished there with granite counters but i think there is a lot of section 8 in the area and  probably in the new development which is high rise.  We will need to get some more information on Waterbury rents and section 8 and have about 30 days  to research.  Do you have any suggestions on how to figure the rent? 

We have just started renovating the  Duplex House (with a first floor 2 car garage) that we have purchased to Buy, Renovate, Rent and Refinance. (BRRR).   We are wondering if we should change our plans and and change this 2 bedroom duplex with garage into a 3 Bedroom Duplex with no Garage.  We believe we could get $200  more for each  apartment if we made it into a 3 Bedroom.  But we don't really know.

 We have designated $30,000 for renovation and have not figure out how much additional this conversion to a 3 bedroom will cost.

As it stands now, we have to replace the ceiling of the garage because of water damage and the garage doors are damaged so 2 garage door have a $800 replacement  estimate that is included in our $30,000 renovation costs.  In addition the 2 Car garage is presently a large 1 car garage as the previous owner removed the dividing wall.  The dividing wall has to be replaced one way or another and it has to have a supporting beam to make it into the original 2 car garage.  If we convert the garage into Bedrooms we will have to reconfigure the front with siding and a wall.  So the conversion would need A wall and siding, a floor, Dry Walls.  I am wondering  if we would need 2 bathrooms since it is on a lower level and that would be really expensive?

The conversion, we would hope would add $200 a month to each apartment (total  + $400) and that would add + $4.800 to our gross rent.

Are we thinking about this correctly?  Would eliminating the garages  and increasing the bedrooms add to the value of the Duplex?  How much additional money is this conversion going to add to our estimated $30,000 renovation cost?  Will the house appraise for more as a 3 bedroom with no garage then a 2 bedroom with garage?
Your input would be appreciated.

• Sold for $152,440on Jul 13, 2005
  
  
  
  • 4 Beds

6 days after closing:
$ 150.00----------Gutters cleaned

   250.00----------Dumpster---------

Well Saturday was the first day of renovation.  We did the demolition and the gutter man showed up and cleaned the gutters.  He said the gutters were solidly packed and clogged.  In the end that might have been the only reason that water was coming in to the kitchen and garage ceiling.  When we pulled the bathroom Vanity out the cat oder was unbearable.  We might end up having to gut the really nice tile bathroom floor if we can't get rid of the cat  oder.  That's another thing we did not estimate in the $30,000 rehab estimate.    The urine might have gone right through the plywood. We got up on the roof and the roof is good but a few tiles have to be replaced.    We are still going to regrade the back even though the water was probably only coming from the clogged gutters.   The Tree man never showed up but one of the painters showed to give us an estimate on the painting. Does anyone have a painter in the Waterberry area?   We  also have to buy 10 new radiators.  Two different people came by when we were  doing the demo and asked about renting the apartments.   

 it violates the 1% rule.  That's not good.   I can not figure out what these percentages come to as listed in Dollars:  

Do your expenses come to more then $14,000 a year?  What does your mortgage Principal and interest come to?

• Property Taxes (2.4% of Property Value in Austin, TX)
• Property Insurance (.5% of Property Value)
• Property Management (10% of gross per unit rent after year 1)
• Utilities (less than $50/ month - split with room mates)
• Repairs (10% of monthly rents- should this be a percentage of property value or a percentage of rent). 
• ---------------------------------------------------------------------------------------------------
• Why don't you put a $ amount next to all these expenses since I don't know what your "Property value "  is?    
• Are the utilities broken out for each apartment including the water?
• How much does  the mortgage. principal and interest come to every month?
• How much is the PMI every month

I don't see why you need a property manger for a Duplex and since its your only property it will be very easy to manage.  You should be "popping" in.   The seperate uitilities are just great, especially the water being seperate.

You are lucky to get rid of your sloppy tenant.  Renovate his place nicely and raise the rent.  The next tenant will be taking a shower beneath your new shower replacement.  I think you should also raise the rent of the long term tenant.  I would do that after I got a new tenant for the other side.  Pay a lot of attention to that main drain, speak to someone that knows all about drains and plumbing and find out how to maintain that drain.

Do all the important repairs as soon s possible  You say: 

"Had the inspection yesterday evening. Inspector found issues, main drain to sewage needs redone, roof has a few squares that need fixed or replaced, a bunch of the windows basically suck, some water stains in the basement for what amounts to poor grading, and disconnected gutters, shower that doesn't even work on the side of the 12 yr tenant (who apparently just uses a tub?), some shotty repairs but nothing that looks like its gonna fall down, "he's def seen worse", a lot of typical things for a 80+ yr old house, some water stains here and there, minor plumbing... yadda yadda...."

Renovate the emty apartment nicely, raise the rent and find yourself a good tenant.  The house next door that is renovated is also a plus/

Attend to the gutters the first thing and get some advise how to handle the "poor grading" and do the regrading.  speak to a drainage person.     Water is an enemy.  Replace the roof shingles.

You did it.  You bought the place.  That's wonderful.  It sounds very good to me.  Its also a tax credit,  and you will be paying down the principal.  This place will be a bench mark for your second place.

Good luck and keep us posted about your new adventure

Wow there is such a big difference between the Bronx and Westchester.  They just are world's apart.  I have lived in both places.   Most of the Bronx is much more affordable then most of Westchester.  I think you just have to settle on an area and explore it.

To me, The most important thing is the cash flow.  Join a local Real Estate club in the area that you want to buy in and/or invetigate and you will know all these answers almost immediatly.  Attend some Real Estate Clubs and some Real Estate Meet Up Groups and keep us posted and share your iformation.

Good Luck.