All Forum Posts by: Allison O.

@Aimee Derylo Hi Aimee, thanks for your response! I appreciate your insight. I am on the North side of the tracks. I also used the rent estimate tool on here and is estimating higher than what I have been thinking.

@Caleb Brown Thanks for your response! I will utilize your suggestion. The comps I have done on my own seem to make sense but I will see what the professionals say. The basement is not a walkout, there is a back door stairwell that leads to downstairs and another that leads to main level.

Hello,

I purchased my first home last year, a small brick ranch in a great area (Downers Grove, IL). It is currently a two bedroom, one bath and is walking distance to three highly rated schools (elementary, middle, and high school), 3/4 mile walking distance to a nice downtown area, and has a great yard. I am on a main street with a few smaller homes but million dollar homes are popping up everywhere and I only see this area improving. I plan on staying here another year or two, then upgrading to another fixer-upper and want to use this home as a rental. A similarly sized rehabbed home a few doors down from me sold 6 months ago for about 360,000 and I have seen several posts for people looking for rental homes in my area. I am guessing I could rent at the current state for 1400-1900 but without the basement it is small and I think I would have more turnover and may be harder to rent due to the current size and wasted potential living space. I would love to find a great long-term family to rent to. If I rehabbed as described below, I am estimating I could easily rent for 1800-2600/mo with the extra bedroom and bathroom. My current mortgage is 1500/mo.

Here is my question: I have a completely unfinished basement. I want to add a bedroom and bathroom with shower to give me a 3 bedroom, 2 bath house. I have gotten contractor estimates ranging from 28-50k. I found one I really like and his estimate was 40-50k. He is the only one that I have been impressed with and felt the 28k contractor wasn't listening to what I wanted and was trying to cut corners and not give me what I am asking for without me noticing. I almost would rather pay a bit more and have peace of mind that things will be done right and not have to babysit. Worst case if rental prospects fall short, I think finishing the basement would increase my home value enough to break even, if not more. I know nothing is for sure, so what do you guys think? Is 40-50k realistic or way too much for what I envision as the future of this home? Should I even bother with this project?

@John Warren@Jaron Walling Thank you both for your input! I agree, overall it is not bad. My boyfriend has a similar stance to you guys; it's fine the way it is. I just feel like it looks a bit run down and could use some curb appeal. 

I am trying to figure out my strategy; background is that I originally wanted a multi family (this is before I discovered Bigger Pockets). The realtor I worked with talked me out of it. Overall, I am happy with my house and it is in a great area. I want to start buying rental properties but am discovering I need a lot of cash upfront. My greatest advantage is that I can use a VA loan, which means I would save a ton of cash, but also means I would have to move. Hence, this house could potentially become a rental property. Personally, I would love to stay for a couple years and giving it a facelift would bring me joy but I also know I can easily go overboard here. Additionally, the basement is unfinished. If I choose to focus on that, I could add a bedroom and half bath (currently have a 2 bed, 1 bath) and my rental income potential goes up quite a bit. Without doing that, cash flow from renting may be minimal or I would be breaking even. Additionally, I would be paying money for the basement and not get to enjoy it myself.

So, at this point, I could see it as a partial flip, but wouldn't mind staying. My head is spinning a bit!

@Corby Goade Yes, good point! I hope to keep working my way up :)

@Lucien Perreault That's really great to know! I will reach out to you for more info!

@Drew Sygit YES!! I will definitely follow, things like that are what I am looking for as a newbie. Thanks!

@Jacqueline Gopin Thank you! I spent some time out in Rockford awhile back so I am somewhat familiar. Will definitely keep that area in mind! Funny- I recently looked at Milwaukee and you are right about "giving" properties away- what's going on there? I thought they had revamped the area? Is it still on the rise or has it hit a dead-end?

@Paul De Luca Hello, I have not yet, still trying to formulate a plan. I hesitate to contact them when I haven't narrowed down hardly anything, and I know it could vary a lot depending on the variables. That being said, do you have anyone you can recommend in the area? I did not have a great experience with the lender I used for my home; they were not great about exploring my options and answering my questions, so having someone like that would be helpful. Thanks!

@John Warren I have been watching the market in the city and surrounding suburbs for awhile now. High cost, low inventory, crazy taxes, and city corruption in some areas. I am not in a position to get a tear down or get a complete reno. I have some cash for a downpayment (max about 20-25k), so that limits how much I can spend. The "deals" I am finding are in pretty bad areas, so that makes me nervous. I don't want to put my neck on the line and then be in a position where I paid too much, it doesn't appreciate the way I had hoped, and I have a problem finding quality tenants. Another option is Section 8, but that is a whole other avenue and seems overwhelming as I am just getting my feet wet. Last, I am familiar with a lot of the areas, but am struggling to figure out what areas are still "up and coming". I feel like I have missed the boat and not sure how to get ahead of the trends. The town next to me, for example, seems to be booming, and small homes in ok shape are being sold for over $300k and are being tore down to build huge houses. Of course I am sure there are still deals, but they get scooped up so quickly and many are bidding wars.