First Purchase & Lots to Learn - SF in Saint Paul

[Aaron Rouser]

Hello BP community!

My wife and I bought our first investment property back in June in Saint Paul, MN. 

The residence is a two story 2BD/1BA with a single stall car garage. It has 1050 square feet of finished living space with an unfinished basement that could add an additional 500 square feet. Our plan for this property is to add a bedroom in the basement and a 3/4 bathroom on the first floor. After we fix it up, we'd rent this out, cash-out refinance, and move on to a MF House-hack. The plan is to become SMEs in the Saint Paul market by building out a substantial portfolio here before moving on from this area. 

Some numbers for the house:

PP: $165K

10% down + closing costs: $22K (Conventional mortgage for the remaining $148K)

Rehab estimate: $30K

ARV: $220-$230K

Mortgage/Taxes/Interest: $1K 

Rent estimate (3BD/2BA): $2,100

Some of our mistakes and obstacles along the way:

• Our handyman was truly terrible. Over-promised & under-delivered, provided us with an unachievable timeline for repairs, cut corners along the way, knew nothing about bringing a rental property up to Saint Paul code, damaged our property beyond his scope of work, charged us a premium to have teenagers assist him with the majority of his work....I'll stop here. We cut him loose early, but not before we paid him $11K of our hard earned money, he made off with some of our tools and equipment, and about $2-3K in damages to our property.

• We underestimated our rehab. We're about $25K in now with a framed out basement only. We anticipate needing at least another $10-20K to get the rest of the work finished, and this includes redoing the bad job of the previous handyman as well as labor/materials for adding a bathroom.
• Overall lack of specific knowledge of Saint Paul building codes. We learn more and more each day, but the more we learn tends to add another $1,000 to our rehab budget.
• We'd like to be start pulling together our financing for our next purchase of a MF, ideally a 3-4unit property. Our rehab budget has set us back quite a bit are we aren't 100% confident on how much we can pull out when we refi. (Looking through BP resources and forums now on financing and they've been amazing!)

Questions to guide us as we move forward:

1. When you first began, what tools did you use to accurately estimate your rehab costs?
2. When entering a new market, how did you grapple with having your rental property comply with the  numerous building codes of your city?
3. For those who have, how have you financed multiple deals in the same year?
4. How did you go about finding qualified contractors when you entered a new market?
5. What other numbers/estimates should we have considered before buying this property?
6. Any other wisdom or thoughts in general that I haven't specified, please feel free to comment below.

Excited to keep moving forward with this project, I'll be sure to post updates, challenges and triumphs in relevant threads. I appreciate any and all comments, tips, tricks and wisdom that you're kind enough to share!