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The Glendora House (Cincy #1)
Well I sat a goal for 2017 and that was to have a deal purchased an owned before the end of it and I did it finally after searching in my own backyard of California I met a gentleman over Bigger Pockets name Jake and we began to talk about the Cincinnati area, he contributed so much with articles from local business journals showing me that Cincy is still on the up and up and has a lot of work that needs to be done. That was great news for me because my strategy is to both acquire rentals from SFR to Multi-family deals that I plan on funding with using the BRRRR method or taking my profits from fix and flips and putting it into more long-term hold properties.
After talking with him over a course of a week he came upon a deal he acquired through his direct mail campaigns that were only a block away from the University Cincinnati. This is a great location as if you rehab the properties right and get students in there that tend to be more studious like pre-med and nursing or other demanding majors to be your tenants then you have low turn over costs because of the lack of vacancy. I immediately caught a red-eye flight out to Cincinnati and met up with him and bought the place. Below are pictures of before and after.
The story of the house is it is an Italianate house that was owned by a gentleman whos mental and physical health had declined allowing the house to fall into disrepair. The upstairs ceiling has major water damage but the plaster peeling and parts of the ceiling having to be removed prior to my ownership. There is also truckloads of belongings the family did not want to deal with.
So the scope of work that has already been started is
1. Clear out entire house of left belongings
2. Have architect draw permit plans for a new floor plan that includes taking down a wall to allow the kitchen to be moved from current location to create an open kitchen, dining room, and living room concept. Adding a bathroom, creating a hallway by creating an opening in 2 walls and closing up the existing doorway. Plans will also include plumbing, electrical, and HVAC for the new system being put in.
3. Remove old coal furnace
4. Replace existing asphalt siding on three sides of the house with vinyl siding that matches the one on the back.
5. replace 10 windows with vinyl windows
6. demo will be done at the same time as windows and siding are being completed.
From there at various stages, my GC will be bringing in subcontractors to complete the electrical, plumbing and HVAC, and Flooring. He will be completing everything else such as the kitchen, bathroom vanities, plaster repair. We are expecting all the repairs to take up to 6 months. So since I acquired it in November 2017 it will be completed by end of May 2018
I have already posted the add for renting it out for the 2018 school years and received about 10 inquiries but no one has submitted the application most likely because they are unable to see the finished product.
So let's get to the Most important things. The numbers...
Purchase: $68,000
Assignment fee: $12,000
Rehab: $70,000
ARV: $200,000
All in: $150,000 which works out to 75% of the ARV allowing me to pull all of my money out.
Rent: $2,000 with potential to be $2,500
50%: 1,000
Debt: $805/month
Cash Flow: $195/month
Have you ever taken on any big projects for you first and also out of your area? let me know.
unfortunately, I did not realize I could not post photos so I will be writing a forum post to show it.
Comments (2)
@Gabriel Mendez how did you like some of my newer forum posts? Let me know what you think of my newest blog post.
Sean Carroll, over 6 years ago
your post caught my eye since i grew up right next to Glendora, in Covina. I am still fairly new to this but am looking to make an out of state investment due to the high costs of CA. gonna give your forums posts a look later so i can check out those before and after pics!
Gabriel Mendez, over 6 years ago