All Forum Posts by: Tabitha Bean

@Jenny D. Thanks for the encouragement. My gut said jump, so I did!

 Haha, you're telling me! What was selling for $70k 15 years ago is $850,000 today! I'm glad to hear that someone is making some money on an investment in DC. I hope this one turns around for me so I can share your sentiment!

Although I oscillate between trusting my gut on this one and feeling like a fool for getting myself into this mess, I've only had the thing for 8 months and made a tremendous amount of progress. I have been spoiled by the ease of income with my other properties. I am really having to work for this one. 

 Thank you Trevor! I appreciate that very much. Cheerleaders are one of my greatest assets right now.

 Yes, that sounds more in line with what I'm dealing with, except we aren't trying to rehab for downtown or NoMa levels, we are just shooting for solid work that will last through these up-and-down waves of gentrification. The property wasn't cheap, so I need that unit to pull it's own weight, and don't want to be in a position in 3 years of having to go back in and update everything in order to get a base rent for the neighborhood.

I will say that I am glad I bought in DC because this has been a crash course! I think I could go into any market after this and it be a breeze! I will not invest again in DC, looking to move into easier markets after this for sure.

@Matthew Masoud sounds like my next investment area should be where you're rehabbing, cuz DC ain't that.

@Trevor Neale and @Wayne Kerr I agreed at first, we were floored by the estimate. It was at least more than double what we were expecting. 

I have had 2 contractors come to give estimates. The first was $25k, without AC, cabinets, countertops, shower/tub, or bathroom vanity included.

It is such a small space that we couldn't believe the cost. We could get a 3rd contractor to come out. In this city, there are a zillion contractors I can call and if 2 show up to do the work I would be extremely lucky.

My first rental is in my hometown where things make so much more sense to me, easy to get reliable folks at reasonable prices. DC is a WHOLE different animal.

I'd love to hear from anyone else in the DMV about their experience with rehabs and the cost. 

I have to do my day job now but can compile photos later to post.

Again, so grateful for everyone's input here! I am loving this.

Thank you! Your last words are a very different perspective than where we have been. The market here is so competitive that my main focus has been just that: rent maximization. I'm going to chew on that for a minute. 

 Haha Caroline, that's my style! I am pretty handy and I've had the kids in every one of these units and all my rentals. I actually love this as a side gig because I love home improvement projects. My contractor already knows that I'll be there half-time helping out.

@Marcus R. and @Jeremiah Dunakin

Thanks for your encouraging comments. I need those right now! My partner and I have both scraped up all our options, and the cash/borrowing power we have doesn't get us near the number we need. Initially, we thought we were looking at repairs to the unit. But upon the tenants vacating with 6 hours' notice, we quickly learned repairs had become a gut job instead.

I was hoping someone would mention an experience they had with Fund&Grow here because a foray into business credit seems to be our best option.

Again that you both for your encouragement and great suggestions.

 Haha, I feel like there is no short version when it comes to this property. First, though I do have 2 other income-producing single-family homes, I work full-time as a teacher, have 3 kids, and live in an insanely expensive city. After listening to lots of Bigger Pockets podcasts, I had a goal to level up and buy a 4-unit building, even though I knew I couldn't actually afford it AND that the property itself did not currently meet any of the metrics for being a good investment. But that same exact story is true of both of my other investment properties that are now netting me over $1k each per month.

The building is in Southeast Washington, DC, a neighborhood that has a bad reputation, but with the entire rest of the city exploding into a kind of gentrification I've seen nowhere else, it is inevitable that it will eventually swallow up that area as well, eventually....

Truthfully, I purchased high and knew the situation with the neighborhood: lots of voucher tenants, low rents peppered with luxury units popping up here and there, crime, the reputation, all of that. Only one tenant conveyed, the other units were vacant and I was able to market the units for what I consider high rents for the neighborhood. They are each rented for $1,550 a month and are mostly renovated.

We learned during inspection that the occupied unit would need significant repairs. My realtor was able to negotiate with the seller for funds put into escrow for some repairs once the tenant vacated. The tenant vacated with 6 hours' notice, and the non-profit paying their rent gave no notice and will not participate in any discussions about the condition in which they left the unit. The damage from tenants is so significant that all the walls must be demoed and replaced, doors, windows, flooring, kitchen and bath. So what we thought would be repairs initially, has turned into a gut job.

It feels like an emergency to me because I have a family to support and I can't have the property destroy my portfolio or my finances. I acknowledge that to most others this one would have been a hard pass, but for me, this is what I am doing and I believe in my ability to make this a very profitable venture for my family.

Can my other properties float this unit and leave it vacant? Absolutely. Is that going to make me any money or allow me to rehab the unit any time soon? Absolutely not.

I was heartened by your comment that these are planning issues, not emergencies. It does feel very urgent for us because we need the unit rented and paying its portion of the mortgage because if it is draining our coffers we don't have anything extra in case another unit goes vacant, a roof blows off etc. I posted my question here because I knew there were tons of seasoned folks in this community who could help me see past this bump in the road and create a map that gets us to the other side.

I currently have close to $1.3 million in mortgages on my personal credit. I have excellent credit and no other loans etc. But the mortgages are killing my personal DTI, even with 2 income-producing properties! I am not eligible for HELOC's for either property and every bank I've spoken with, even credit unions, say my DTI is too high to qualify. My partner and I applied together, with a very reasonable combined income, but still not enough for a bank to say cool let's do this.