All Forum Posts by: Tony Castronovo

@Cipriano G. Thank you and best of luck on your property search.

@Max Liddell I provided some details on the rehab above. On average, our interior rehabs will be around $9500. It’s hard to get the economies of scale that a 150+ unit complex would have. And I know it can be done cheaper with just lipstick. I also know I had several contractor bids much higher. I’m pleased with our contractor and the product we are producing.

@Sochima Eze Thank you!

@Jill F. Haha, yes it’s been tough parting with them. I think they were original (1967). Classics!

@Bjorik Mutize it was 90% occupied at purchase.

Hey @John-David Hails...sounds good....will take you up on that I am sure.  We still have plenty of work left on this project.

Usually lenders will give you credit (e.g. 75%) on the income toward your DTI. Are you factoring that into your calculations?

Thanks @Santos Gloria! Let me know if you want to visit the property.  I'm usually out there once/wk.  Sometimes I go just to check up on things and/or walk completed units with my GC...but other times I roll up my sleeves a bit (e.g. I volunteered to put in the kitchen backsplashes, which is saving me about $3500....I know it's my time and I shouldn't be working "in the business" but I enjoy putting in a little sweat equity).

@Mauricio Ramos feel free to PM me and I can provide you with some contact info.  I am not sure how far south they will go.  But doesn't hurt to ask.

Hey @Cody L. thanks for your comment.  

@Bjorn Ahlblad yes, we did exterior improvements (see second bullet of original post).  It's all one building, 2 stories, organized by 4-unit quads.

@Daniel Brown this was actually a rebound property.  We had another deal that was starting to fall apart and were reaching the identification timeline on our 1031 exchange.  My broker found this one for me and we jumped on it.

@David Walkotten congrats on your success!  It's tough to put an estimate to duration per unit.  We broke up the project in phases.  Phase 1 had only 2 units.  Phase 2 had 5 units.  We are in Phase 3 now.  Each phase is 1 month.  Phase 1 we just wanted to start with vacant units.  By Phase 2 we had freed up units by our giving notice to tenants.  We were aggressive because we wanted to "remove the cancer" so to speak.  My contractor got familiar with the units and their hidden nuances during Phase 1.  By Phase 2 he was able to go faster because a lot of the unknowns were apparent, we had our materials sourced, etc.

Regarding rehab costs, we are spending more than what I hear most investors spending at approximately $9500/unit.  A little justification...first, you have to understand the condition this building was in...50 years old with a previous owner who was 82-yrs old and self-managing.  We literally had appliances catching fire and shocking the tenants.  Second, I believe in keeping repairs & maint costs down by doing solid rehabs.  Emergency calls on a weekend for a leaking sink or broken garbage disposal can really add up.  Lastly, while I think we got a fair price from our contractor I'm really pleased with the relationship.  He also handles any repairs and has really taken ownership of the property.  He keeps the property clean when we have tenants piling up trash upon move out, he shows up nights and Sundays if necessary to help winterize or address any tenant issues.  He's been great!

Our rehab includes new appliances (basic, not over the top), all new flooring (vinyl plank throughout except carpet in the bedrooms), new plumbing and electrical fixtures (including ceiling fans), cabinet repair and painting, sheetrock repairs, new shower/tub plumbing and tile surround, bathroom vanity top and sink, new toilets, paint, and backsplash.  We saved some money by resurfacing the kitchen countertops and refinishing sinks and tubs as necessary.  Some units require a handful of interior doors that were damaged.  And some hot water heaters need to be replaced.  All units get a new metal front door and hardware (previous exterior doors were hollow core with hw falling apart).