[1st Time Investor] Sharing some Info about the Listing and

[Eden H.]

1st time flipper in the Greater Boston Area (Watertown East End). Still going through the full gut renovation process and asking for some thoughts on the overall numbers and the design.

Basic info:

- Timeline: Jan 2022 (Closing) -> Feb/March (Architectural planning) -> April (Framing/dormer) -> May (HVAC/plumbing/electricity) and now working on insulation and drywall. The windows took a while to arrive and impacted the timeline. 

- Costs: 910k acquisition (20% down with 3.375% interest) and ~500k total construction cost

- Backend cost upon completion: ~950k (or ~$4500/month as rental) for the upper floor unit (3b3b with deck and porch) and ~700k (~$34000/month as rental) for the lower floor unit (3b2b with porch). 

- Parking: 1 garage spot (compact) and 3 off-street in the backyard. Lot is ~5000 sq ft with a stone patio (needs update). 

- Listing: link

Overall, my plan is to owner-occupy the upper floor unit with my wife and rent out the 1st floor unit. The basement will stay unfinished with designated storage spaced for each unit and a gym area. 

I did have a sense of FOMO last winter. After touring a few units I had the wild idea of flipping an old unit, since I've always been into urban planning, home design and personal finance. This particular unit has great view from the top floor (see pictures later) and that really blew my mind -- put an offer almost immediately after the tour and went slightly over asking without contingency...

Midway in the project, I didn't expect such a quick market turnaround and feeling fairly pessimistic, since I almost bought at the peak and started construction when the building cost is also crazy... I'm working with a GC who's also new to the industry so the planning and design could've been better. 

Floor plan:

Some pictures:

1. Living room -- open concept cathedral ceiling

2. Roof deck

View from 3rd floor master suite window:

Question for the forum:

First post in this forum and look for your insights. Since I'm still midway in the project there're opportunities to tweak the plan. Here're my questions:

1) Overall thoughts on the renovation plan? Does the number make sense? Any recommendation for last minute changes?

2) Future basement plan: ceiling height is really low (<6'8''). I'm thinking of at least partially digging in and finishing the basement to create a shared amenity area, or designate part of the basement to the first floor unit. Any thoughts on the basement renovation given the plan?

3) Leasing strategy for lower level: I'm thinking of doing short-term rental. Any suggestions on finding dependable housekeeping and maintenance services?

4) Opportunity area: lack of closet space (especially 2nd floor), no mudroom and only 1 front entrance. Any thought on related improvement? My GC and a few folks who have walked through the property are sort of against my proposal quoting the high costs, although I'm still curious about suggestions from this forum.

Thanks for your time!

[Jonathan Bombaci]

Thanks for sharing. It looks like a cool project and you’re learning a ton. Obviously no one knows what the market is going to look like in 6 months but it’s still strong now. My recommend is to go pedal to the medal and get your refinance started ASAP. It’ll take them about 30-45 days to get the refinance settled so order it when you’re at the tail end of your project. To answer your questions: 

1) Overall thoughts on the renovation plan? Does the number make sense? Any recommendation for last minute changes?

- speed. Get it done and get your refinance started. It sounds like you bought it right but I’m not sure on budget. Given it’s to the studs I’d estimate about $100 per Sqft depending on quality of finishes + anything you need on exteriors and mechanicals. How many Sqft is it? Does that line up?

2) Future basement plan: ceiling height is really low (<6'8''). I'm thinking of at least partially digging in and finishing the basement to create a shared amenity area, or designate part of the basement to the first floor unit. Any thoughts on the basement renovation given the plan?

- probably not worth it but try to find comps to determine value. If it’ll slow you down then punt and maybe do it in the future. 

3) Leasing strategy for lower level: I'm thinking of doing short-term rental. Any suggestions on finding dependable housekeeping and maintenance services?

- if you’re living upstairs then I’d recommend doing the property management and cleaning yourself. At least to start. If you pick the right finishes and furniture it could be as easy as changing sheets and swapping out towels. Do it yourself for a few months then look for someone to do it for you since you’ll have a better idea of what you’re paying for and if it’s worth it by then. 

4) Opportunity area: lack of closet space (especially 2nd floor), no mudroom and only 1 front entrance. Any thought on related improvement? My GC and a few folks who have walked through the property are sort of against my proposal quoting the high costs, although I'm still curious about suggestions from this forum.

- focus on the other aspects first. This sounds like it could slow you down and might not add much value from an appraisal standpoint. 

As your fist flip remember KISS (keep it simple stupid) and you’ll have better chance of success. 

Best of luck!

Jon

[Drew Sygit]

@Eden H. don't make this harder than it already is.

Learn from it so the next one is smoother and better thought out:)

[Lien Vuong]

Congrats and thank you for the detailed share. 

The market has shifted but with the 2%+ rate increase, I think you're still in a strong position. The basement doesnt look optimistic to finish, at least certainly not easy so it might make sense just to finish the project at this phase and refinance out your $. Something to think about is that you can condo these units - your agent and comp it for you and you can do a second refinance after that since you're splitting the asset into two. 

Keep rocking!!

[Eden H.]

Thank you so much for your genuine replies!! As a first timer this is a big project and lots of risk & considerations. Agree that I probably tried to overthink before it’s done. The KISS strategy summarizes well.

Also, I’m thinking of condo conversion while selling the unit. I thought I could try selling it as multi and 2 condos at the same time?

[Richard Phillip Lewis]

Sounds like an exciting project! If you need a 3D Rendering / Visualization I can use your floor plant to help you and your potential tenants understand what it will look like better. With the Realistic 3D Rendering you can put it on the market sooner and get more attention before the construction is finished. How great would it feel to have a tenant lined up before you even finish construction?! Message me and lets make a plan!