First Property Update/Remodel/Turn... Who to call first?

Question

Hello all,

Yesterday I had my first tenant (inherited) let me know they will be moving out come June (the end of their lease).  I have owned the property for the past two and a half years.  They have been good tenants, and I have been updating the unit little by little over this time.

The question: Who/Where do you turn to for unit updating/remodel?

I am looking to install solid countertops, possibly replace the cabinets, lay new vinyl plank flooring, and paint.  I am not sure if a GC is the person I should be looking for?  Should I give the managing of this project a go myself?  I am handy, and could handle the flooring and paint myself.  I may have to have someone do carpeting in the bedrooms, but I can lay the vinyl plank. Countertops and cabinets are a bit out of my scope.

This is a 3 bedroom, 2 bath unit in a solid B class neighborhood in Fresno, CA built in the mid 80s so solid oak cabinets are what I'm working with. I am shooting for somewhere in between the new fancy expensive A class apartments being built all around me, and the typical rental in my neighborhood.  With this unit updated, I believe I may be able to increase rent about $100 from mid $1200 to mid $1300.

This is a new part of the real estate investor typical day that I have not tackled yet.  Any thoughts?  Please let me know if any additional info is needed.  I appreciate your feedback.

Michael P. · Answer

Personally I feel allowing pets lets me charge higher rent and have a greater pool of tenants to choose from, so if you feel the same way keep the old floors as long as possible.

Amber Smith · Answer

I have a couple rentals & I also do fix & flips & I definitely think you should keep your work minimal on this property as long as you’re keeping it a rental.

You *may* want to switch out your carpet tho if they had pets. If you can get by with just a good steam clean, then great, but if not, I would Def go with vinyl plank flooring. And if you’re handy, you can totally do it yourself.

As far as the cabinets, I would leave them alone until you’re ready to sell it. Those solid oak cabinets are ugly, but they are durable! I have done 2 different houses now where I sanded oak cabinets & painted them & they turned out great.

Eventually when you sell, If you can avoid buying new cabinets , I would. When the time comes, Just test out a cabinet door-sand, primer, paint- & see if you like it. If not go get new cabinets.

But overall, save as much money as you can on this rental, especially your turn around costs. Good luck!

Darek J. · Answer

Very good advise from all.  Thank you.

Jaron Walling · Answer

What I've learned from other buy and hold investors is to spend as little as possible during the hold stage. Make sure the roof is good, HVAC, plumbing, and bathroom/shower are functional. Other than that spending $7K on a remodel (lets be honest here and round to $10K) is to much for a small rent increase. I would complete those projects and spend that cash before you list it for sale!

BJ Dante · Answer

@Darek J.  Hey man!  Just my two cents as contractor who specializes in cabinetry which inevitably causes me to deal with plumbing, electrical, and hard surfaces.  I think a lot of this depends on how much time you have.  Since you’re handy you could do tear out yourself and I bet with 4-6 hours a day you could have everything pulled pulled out.  If you’re keeping the layout of the unit the same you could just show pictures of old cabinets and bring in measurements and get pricing.  At least up here, a custom cabinet shop (in my professional experience) can beat the price of a cabinet broker).  Then get pricing for counters and stuff.  The more you can do the less you have to pay.  Just a thought.

Deryck C. · Answer

Hi Scott i like the advice you gave and was wondering if you can give me an advice. i'm remodeling my one story rental and needs a new roof and an updating of the kitchen and bath. Which one would you do first, remodel the kitchen and bath, or roof first, or it doesn't matter since updating the roof won't affect the interior part of the house...

Any input is appreciated, thanks

Scott P. · Answer

Remove Cabinets and Countertops 1st. as the new cabinets may not cover the walls exactly like the existing ones.  Then Paint since you're replacing the floorcovering.  Then install the new cabinets.  Then the new countertops.  The do the new floor covering last.

If you're never done it before, since this is a good B rental, I would hire it out and learn from the installers in order to do it yourself next time.  You could easily Kilz the floor though by yourself.  You might want to do the tear out too to save $.

I doubt that you need a GC for this.  The cabinet supplier can refer you to installers for cabinets and countertops.  Paint and floorcovering don't need a GC.

Good luck!

Jay Orlauski · Answer

Hi Darek -  turning around a property can go smoothly if you approach it the right way. when I was self managing - I have typically done much of the cleanup on my own such as cleaning and painting    - but often left bigger jobs to the pros. I would say a GC is not necessary  - it's a little overkill if you are just doing basic updates.

wherever you get the flooring ( and I have some referrals  for you)  - they can install it  - so no need to worry about that.  countertops and cabinets can be installed very nicely by a qualified handyman  - you can bring a couple of them over to look at the job and give you a quote - ( again , I can refer you to a few people)

From what you are describing - I am fully confident that you can manage the turnaround yourself. It's very similar to calling in a plumber to fix something except you just have a bigger list of things. Also  - feel free to give me a call and I would be happy to walk you through anything you have concerns about and can plug you in to some resources to help get you going.  I recently did exactly what you described about 11 months ago on my own personal unit and it was simply a matter of delegating the right tasks  to the right people. You will pay a much higher premium for a licensed GC  to delegate for you.  Just be sure that your handyman / installers have liability insurance.

Let me  know how I can be a resource for you

Jeff Zimmerman · Answer

Hey Derek, sounds like a good project.  i have a list of contractors and handymen you could chat with to see if you'd like to work with them, feel free to message me if you'd like their info.  as far as doing it yourself vs having a pro do it i would think through a few factors 1. how much money will i save if i do it myself?  2. how much less vacancy will i have if I have a pro do it (assuming the pro can do it faster than you)  3. based on a 6.5 cap, if you raise your rent in that unit you could raise your value of the property by about 18k, assuming your expenses stay the same, so run the numbers and make sure the improvements come in less than this, if they don't you may not want to make all those improvements.

Let me know if i can help further.

Darek J. · Answer

Thank you David.  You do have a point.  Perhaps I am over thinking this issue since its my first turn.  I do have a feeling that since these inherited tenants had 3 cats and a rabbit, that I may have to seal the floor with something like Kilz before having some option for flooring done.

First Property Update/Remodel/Turn... Who to call first?

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