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I am pretty handy and had the necessary tools to get started with renovations myself. I began with the vacant units, completely gutting them and starting fresh. I acquired some free help here and there from friends which quickly expired. I feared my inherited tenants would vandalize my hard work, however I was more than respectful to them and they understood my plans for fixing the place up. I realized the need to hire help to work when I was not there, as well as increase my budget for materials in order to make the units attractive to my target tenants. I began doing floor to ceiling tiled showers, payday loans cleveland ohio payday loans cleveland ohio wood like tile floors throughout, brand new kitchen cabinetry, nice laminate countertops, and installing laundry hookups.
My handyman was very slow moving as he was in poor health and much older. He did solid work for really cheap, however it came at the price of time waisted. After he completed two units in 4 months (the same pace I was completing payday loan portland oregon them on top of a full time job) I decided to let him go and hire someone else.
I decided to have all of the units exteriors painted, dead trees and low lying limbs trimmed, gravel laid, and rail road ties placed to designate parking areas.
After two years, I had finally cleared the place of all previous tenants. The last to go was the cat lady who I attempted to work with.
I began trapping the stray cats and bringing them to the "no-kill" shelter however she began releasing the cats from the traps and continued to feed them. They were having litter after litter of kittens and it brought on a flea infestation in which my new tenants were NOT happy about. After the cats were released, they would not enter the trap again so eventually I began catching things I did not want. I found a kitten trapped in a sewage stack that had been broken loose by the lawn guys. It was super great having to dig up and cut lines to save this cat. Push came to shove and eventually I terminated her lease after 18 years of living in that unit.
Needless to say it was absolutely disgusting and smelt like it was built from petrified cat urine. I found an absolutely amazing manager who I teamed up with for short term renting two of the higher end units.
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Once I got over it, I hired someone with great reviews and was very pleased. If you are a "do it yourself" kind of person, hire a manager to take care of the administrative burden to free up your time for renovations. Many times, I would be working on a renovation and would have to stop what I was doing to show a unit to prospective tenants, answer calls, take work orders ect. Once I hired my manager, all of those burdens went away and I could focus on construction. You can immediately tell by the pictures payday loans arlington tx if a house is a big fancy 5 bedroom home, or if it is a Multi family listed as a SFH.
It is difficult to change the culture of an apartment community before changing its curb appeal, especially when targeting a higher class tenant. If I could do it over, I would start with exterior paint and lawn care.
This way, I could get maximum rents for each unit with a renovated interior.
Our goal is to keep you informed about real estate strategies, news, and advice through the many forms of regularly updated content we host, including our blog, forums, and member blogs. Our member blogs, written by BiggerPockets members for BiggerPockets members, offer tips to help you in your real estate journey based on firsthand experience. If you have kids but you do not know how to start best cash advance your real estate investing journey this may help Read More Why would you want to invest in RV parks? Read More COVID-19 has likely accelerated the inevitable, closings done remotely and virtually. Read More I saw the opportunity to buy my first real estate deal by paying attention to someone who felt mistreated.
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In the spirit of the holiday, I fully intend to eat my weight in turkey, green bean casserole and sweet potatoes.
Thanks to the podcast and blog posts, I understand that ARV minus purchase price and renovation costs does NOT equal profit. Knowing how to run the numbers correctly based on that understanding has been so valuable in my first nine months of really digging into real estate investing. But I did recently sell my first rental (which I purchased BEFORE finding BiggerPockets) in order to put my money to work in a better investment.
We decided to sell the property and put the money into a property that would provide better monthly cash flow. But it had been rented for two years, so it was payday loans cleveland ohio going to need some work before we listed it.
And, of course, there are a lot of other costs that add up, including holding costs, agent commissions, closing costs, etc.
To get our property ready to sell, we replaced all the carpeting, repainted the entire interior as well as the front porch, spruced up the landscaping, and did some miscellaneous repairs such as putting in fresh white electrical outlet covers and switching any brass hardware to brushed nickel. The inspection revealed repairs needed to the electrical box, water heater, and the front porch. And then you have to factor in commissions and closing costs. Remember that we had money we had to put in prior to closing for our original down payment, renovations, and holding costs while updating and selling. So how much cash did we have into the property, and what payday loans cleveland ohio was our actual profit? In our case, the total proceeds from this sale were more than enough to purchase a property that will cash flow 8 to 10 times as well as our first rental property did! We close on that tomorrow, bad credit lenders so more to come on that soon.
Thanks so much for this helpful, informative article. All that glitters is not gold, and the difference between the anticipated profit and the actual realized profit is eye-opening. I have started creating simple spreadsheets for each "project" to ensure I am capturing everything and have the full picture of my expenses and profits.
The first column will have the address, then bedrooms, bathrooms, and number of square feet. You need to filter through the properties and find comparable ones. Order your results by newest sold so you can first see what just sold.
If you plan on performing a full rehab then only select the properties that have been fully rehabbed. You have to click on each sold listing and quickly scroll through the pictures to see if the property has been rehabbed. For the properties that have the same number of bedrooms, bathrooms, square footage range, and have a similar rehab to what you plan on doing, add them to your spreadsheet.
Each property will go on a new row and you should aim to have at least three to four comps for a more accurate ARV.
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