Looking back - Story

[Heshel Mangel]

I wanted to share some details and timeline from a recent project we did - hope this will be of benefit to some readers. 

Aug 2019: 

Purchased distressed 20 units in Cincinnati, OH for $450,000 all cash

Property is 70% occupied with rents averaging $375/month, loads of deferred maintenance both interior and exterior

Begin to cure basic and necessary repairs for health and safety of the residents while we look for construction funding for the future rehabilitation project

Oct 2019: 

Received term sheets that were satisfactory and began working towards the construction plan. We helped ready the existing residents for relocation by providing information on other local available apartments as well as social services who help in these situations. Provided money to those residents to help them with their moving costs. During this time we began interviewing contracting companies and bidding out the work we wanted to accomplish

Jan 2020: 

Property is empty and construction begins, first on the exterior then moving on to the interior

Apr 2020: 

3 months later the project is just about complete, we can start to market the units for lease. Unfortunately, we are now in the midst of the COVID-19 pandemic and leasing is very slow but we do get the first few residents set up in their new apartment homes

July 2020: 

Community is 95% occupied with average rents at $675/month (range from $613 - $735)

Rehabilitation included: Rebranding and signage, exterior pavement and concrete, fencing around the community, restoration of the brick and masonry, weatherproofing, gutter and roof repair, landscaping and lawn care, security surveillance, interior renovations included new flooring, paint, appliances, sinks and countertops, low flow facuets, repairs to the plumbing and electrical systems, new water heater. 

Lessons learned: While it sounds all good and rosy, this project was not without some lessons learned. Hiring contractors, managing them efficiently, and how to create clear expectations and guidelines are so vital to any rehab project, all the more so in a complete makeover like this one. If you create a process for how to manage this type of project, it leaves no room for arguments later on - I'd suggest creating a clear guideline on how often contractors get paid, have an inspection on any system before paying out.