All Forum Posts by: Phillip Rosin

I'm hoping to hear from others on what has been successful or a nightmare for long term use. I have class B properties and need to replace some alcove tubs. My research so far has been mixed. Steel with porcelain seems to chip a lot. Acrylic can stain. Vikrell seems promising. I'd love to hear your thoughts! Thanks!

Quick update. I had a plumber come by and he suggested relocating the heater to the attic, above where it is now. I didn't realize there was enough room and that it isn't an issue to support it up there. So, I'm getting quotes to go that route. 

@Max T. Thank you. I am seeing a trend of completing two units first and offering to move them into those. That is an idea I am strongly considering. 

@Matt Nico For that much I would definitely paint as well! Lucky for me they are tiny kitchens. Yeah, I'm hoping to follow a similar path. I wound up getting into IT/Programming and generally enjoy it, but still would prefer to be 100% real estate some day. 

Thank you all for more good input. I will take it all into consideration while I find out more from my PM and his contractor on timelines and tenant feedback. 

@Matt Nico Thank you for the suggestions. I will absolutely make sure they want these upgrades before proceeding. The main kitchen complaints have been no cabinet between the stove and fridge and only one drawer in the entire kitchen, along with old appliances. I had considered painting the cabinets. However, I do not want to do work myself in an occupied unit (and the PM is very against it as well) and for the price of having someone else paint and then also replacing hardware, I decided spending $2K on cabinets that are solid construction and should hold up over the years would be worth the investment and also help with my refinancing/loc goals. It is entirely possible I am over improving and this will be a lesson for me. The good news is after all is said and done, with my current budget, I'll be at 13-14% COC return between the two duplexes and have a good bit of equity as well. I've done an extensive renovation on a house before (and have a civil engineering degree) and I have a good process for budgeting, so I'm quite confident in my numbers, but time will tell. The current budget is at $46K, including an unfortunate death of an ac unit not even a month after closing :( $70K would put me at 12% COC. I should wind up under $50K. Again, this is for 4 units.

@Mike Dymski I had considered completing the two vacant units and offering to let the tenants move into those units. Obviously there would be a little more cost involved, since I would then have to do all the updates necessary in their units before renting them out, including new paint and cleaning. However, that isn't necessarily a deal breaker. I will discuss all options with my property manager. Thanks.

All good points so far. Both tenants have voiced a desire for updated kitchens and that they feel the new price does not reflect the condition of their units. However, I will certainly not push it on them if they don't want them. Worst case, if they decide otherwise, I will store the cabinets for a later time. However, as of right now, both have been excited at the idea of new cabinets and both seem understanding of the process. I will leave it up to my property manager to make the final call. 

It sounds like most of the concerns revolve around tenant discomfort during the process, which I am fully keeping in mind as we approach this. 

One other thing I completely forgot to mention is I'm planning on refinancing out of the FHA loan I have on one of the units and want to ideally not have to pay down the balance to get the required LTV. I'm also hoping to take out a heloc or cash out refi on the other as soon as I can as well. I am using these upgrades to justify a higher appraisal as well, so there are other motivations at play also.

@Theresa Harris Yes, I will likely be doing at least one, if not both vacant units first. I should clarify, one of the units is not yet vacant. We are working on getting that tenant out and hopefully they will be gone by the end of this month. I'm living in the other currently. The cabinets and appliances have already been procured ($2,100 & $2,250 each kitchen, respectively). Counters should come in around 1K ($35/sqft). The cabinets won't be delivered for another few weeks. I will be working with my property manager to determine the best approach as the work is being done. The actual cabinet replacement should be a 1-2 day job, but there is a turn around time on the countertops of up to 10 days. I'm mostly certain we can take some measure to accommodate them during that time.

I've already made up my mind that I'm doing this, but I want to get some feedback on whether I'm crazy for doing so. Sorry if this is moot, but I am generally curious and perhaps it will sway my decisions with future properties.

Some Background: I purchased two duplexes and am keeping two of the tenants. They have been here for years (one for over 10 years!) without a lease (month to month) and the prior owners haven't really done anything in that time to keep the units in good condition. The tenants have taken it upon themselves to paint and do general maintenance. The identical duplexes were built in 1998 and have the original super cheap, laminated cabinetry and mostly old, worn out white appliances (one has 3 burners out!). The rents were way below market, at $800.00, and they both have now signed leases for $1,500.00! At that price, I know these units are not up to par but I understand that they did not want to go through the hassle of moving and so decided to stay. We also offered a 15 month lease with $500 of the first 3 months' rent going to the deposit, so they're technically getting 3 months at $1,000.00. I want to keep these tenants as long as I can and believe they will keep their places in good condition, given how well they have treated what they had over the years.

With that said, I originally was not planning on any tenants agreeing to stay and had planned to update all the units after they moved out. However, even though two tenants are staying, I still believe that doing some updates to warrant the new rent is the right thing to do; especially since the other two units will be fully updated and rented for the same or slightly more rent. I also hope this will keep these tenants in place going forward. 

I will be updating their kitchens with new lighting (swap LED for fluorescent), solid construction cabinets, granite counters and stainless appliances. I may also do some small bathroom updates, such as a new vanities (these are very small bathrooms with tiny vanities, so price will be minimal). My property manager will be handling the process and has a good crew they use for all their work. I'm confident they will be able to proceed without any grievances from the tenants as they've been very understanding and reasonable with everything so far. 

I'm wondering if I'm being crazy here in doing these updates now. There is, of course, risk for tenant grievances and I already have the tenants in place with leases. I'm electing to do this now, instead of waiting a year to see if they renew and, if not, then do the upgrades. 

The total cost of the kitchen upgrades works out to around $6-7K per unit, if that makes any difference.  

Thank you for your feedback. Even though it's happening either way, I appreciate knowing if I'm actually doing the right thing here, from a business perspective. Below is an old photo I got off one of the listings and the render from the cabinet supplier (yes they are reversed).