All Forum Posts by: Chris Vail

@Justin C. 

Purchase price was 125k, by the time all of the rehab is done I will have put about 33k into the property.  the unit will rent for 1,300 a month as a 3 bed 2 bath.  If I wanted to sell it I could probably get in the 175-180k for it.  I don't plan on selling anytime soon, in the summer time I am planing on doing a cash out refinance to fund the next property I go after and continue to rent this one.  I will post more refined numbers once everything is said and done.

@Account Closed I would recommend building your own spreadsheet as a way to more fully understand what goes into each calculation.  Its okay to use someone else's sheet but make sure you understand exactly what is going on in the background. 

@Thomas Vail 

I did not get a full written report, we walked the property (he had been out there once before to inspect the tree as I originally only wanted the tree trimmed and thinned out).  After he pointed out where the tree was infected and pointing out the spots where there was massive sap bleeding, I made the call to cut it down, he said he could just trim it up but the tree was going to drop at some point in the not to distant future (1-5 years was his estimate based on the damage that had already been done).  I will plant a new tree in its place or at least close to where it was in the back yard.

Link to the Rehab process: http://www.biggerpockets.com/forums/522/topics/161157-first-rehab-to-rent-property

Congratz @J. Martin here is to more future success and flip flop wearing :)

So the scope of the project got a bit bigger after looking around and talking to some friends that are renters and I decided to switch the half bath to a full bath.

Layout of new full bath: https://drive.google.com/file/d/0Bw4tlga09RSJQzVXd...

This takes the Jack and Jill bath and dedicates it to the master bedrrom, moves the closet (this is where the vanities will be now) and adds a shower.  Cost for labor and rough materials 3,800 and an extra week to the project.

This is a picture into the new full bath where the sink and toilet used to be with what was the closet behind it, which will be where the 2 sink vanity will be going.

Pocket door for bathroom entrance.

The original windows in front of the house were installed by someone that did not care about quality of install, no flashing, no sealer was used, and some of the windows were held in by 2 screws.  I have replaced all of the windows in the house and have increased the window size at the front of the house.

Old windows with dry wall cut back to accept the new window.

 New window installed.

In doing these windows the majority of the siding on the front of the house was also dry rotted so the front of the house is getting T1-11 siding now instead of the older style look.

I am debating on the siding above the windows (updating also to the T1-11 for consistency) but am wondering if once painted the same color it will not be as noticeable.

Flooring, Cabinets, and Appliances have been decided and ordered (thank you Black Friday). I still need to decide on the shower stall (if anyone has had luck with any certain kinds I am all ears) other wise everything has been decided just some things still need to be paid for.

Had to increase my electrical costs as we needed to add 2 circuits to the kitchen to bring it up to code with adding the dishwasher and bringing it into the 21st century.

Gutted kitchen with its new window

This will be the layout of the cabinets once installed

https://drive.google.com/file/d/0Bw4tlga09RSJek1DQ...

I had a meeting with an arborist on Friday for the massive pine tree in the back yard, unfortunately this tree will need to be removed as it is infected with bore beetles and posses not only a threat to my house but the house next door as well so it will be getting removed this next week weather permitting.  The arborist will also be trimming the palm tree out front and spraying the cherry tree out front for the bore beetles in it as well.  I hate to see trees get cut down but this tree is to much of a liability and it is not a question of will this tree fall but a matter of when.

that massive tree in the background is the ticking time bomb.

Well I think that about brings us up to speed with were the project is I will try to update early on this next week with progress.

if you click on the pictures they are right side up :( I am not sure what to do about them on the post as I tried turning them first and then uploading them and they were still upside down.

Hello BP,

I am going to do this thread as a thank you to all the help I have recieved from others on this site, and I am hoping it will help others to see me go through this process.

Intitial closing and lessons learned here : http://www.biggerpockets.com/forums/311/topics/153...

Now for the rehab since I am now the owner of this 1960's 3 bed / 1.5 bath home.

( I am hoping that the picture is rightside up as it is showing upside down currently as I am typing)

This is a rough mock up of the layout of the house https://drive.google.com/file/d/0Bw4tlga09RSJN3hyU...

And here are some initial pictures of the inside of the house.

Living room (pictures are upside down again, if you open in a new window they are right side up though)

Kitchen

Dinning room (opposite of kitchen)

Bedroom #1

Full bath

2nd bedroom

half bath (jack and jill to bedroom 2 and 3)

Bedroom 3 (master or at least biggest)

Dinning room to living room with partial kitchen

back of house with a shot of the covered porch.

So that's how this project started, I went out to contractors with the following SOW

https://drive.google.com/file/d/0Bw4tlga09RSJX0VBL...

This was my first experience going to to bid for contractors and I saw the range of contractors from folks that were professional to those that well were not.  I was thinking about doing most of the work on my first rental my self ( I really enjoy the process of fixing up property, and working with my hands) but after having our first baby 3 months ago, my time is better spent with my new family.  I never thought what I did as a hobby for friends would cost so much to have someone else do!!!  I got bids that were all over the place but finally selected one that quoted the labor (minus a couple of the items in the SOW for 7,800) and a 2 week time line weather permitting.

Next post will be progress on the rehab.

@Christian Belleque 

I am not sure where I got the idea that you would be living there (maybe from one of the other posts talking about you living there which might have meant the area and not the duplex itself) This solves item number 1.

item 2. so you are not renting the duplex by room ($600) but rather as unit 1 and unit 2.  This will be good for common area maintenance (security deposit) but you will need to find groups to rent to rather than individual's (this might make you pool of potential tenants smaller) something to keep in mind.

item 3. your statement is misleading "This is true for most students (frat guys, football players) but in my experience at many different houses in the area that are rented to college students, they generally take good care of the property if the owner takes good care of them and the property as well. If I left them a dilapidated house, they wouldn't take much pride in it. Another thing I would insist on is having females live in the house because they are generally less messy and less prone to parties every weekend." On one hand you say this is true for most students, and then you are applying your window of experience which is different.  In a previous post you have also stated that you are going to do minimal fix up (paint and minor landscaping) because it is for college kids.  So how much pride are you putting into the unit that you are expecting them to return to it?  If you are going to insist on having females in the unit, you are again shrinking your potential rental pool.  I agree with you that female roommates are better keepers of a unit I am just not sure how you then screen your applications or advertise (Only accepting applications with at least one female occupant?)

I am happy to see you really looking into this, I am just playing Devil's Advocate here to make sure you have thought of as many things as possible.  At 300k  do you know where you are going to come up with the down payment?  The closing costs? The fix up money? The holding costs until rented?

@Christian Belleque Some things to think about:

1. How do you fair with other people, strangers? You have lived with team mates which is a completely different dynamic than living with people that respond to an add on craigslist. How will you be able to keep business separate from the living relationship?

2. You stated 6 total rooms (4 in one 2 in the other), you are going to live in one room so 5 left.  How are you going to do common area maintenance? If every person is on their own lease for their room ($600/month) how will you hold each separate tenant responsible for areas like the kitchen, bathroom, living areas? Especially if you have tenants leaving at different intervals?  Or do you plan to really have groups rent the unit as a whole unit and not individual rooms?

3. When I was in college I lived with teammates first and then friends after a couple of years.  As the more responsible person generally out of the folks that I lived with I can tell you that there are a lot of people out there that don't care one bit about "your" property and they don't know how to take care of something they are technically borrowing for a price.  Some of these kids have never been away from home and don't know the first thing about taking care of a house (their parents have always done it for them).

4. You keep looking for what others will pay for this property, so I will ask this... What would you pay for it and why?  What do your numbers tell you? 

Potential rent (5 not 6 rooms)- vacancy (this can vary based on how you do your leases basically is it going to be a vacant room or a vacant unit (up to 4 rooms in one unit))-all your expenses (Maintenance, insurance, taxes, utilities, cap reserve, advertising, & PM (even if you are doing it account for it))- Debt Service = Cash flow.

Quickly doing some back of the napkin numbers if your rent is 3000 a month, 10% vacancy, using the 50% short cut for expenses, and using a 30 year loan @ 4.5% you are looking at a purchase price of 335,000 if you just want to break even on your investment (meaning zero cash flow).  If you want to make 10% on your money invested (money in vested is down payment, closing costs (I am assuming 4% of purchase price), and Up front repairs (I am assuming 2.5% of purchase price) you are looking at a purchase price of around 217,500.  Again you need to run the numbers and find out what you are comfortable with when it comes to a return.