All Forum Posts by: Brendan M.

Hi guys, 

I'm looking for some advice here on renovating a rental unit. I'm planning on closing on my second property in Chicago in January and wanted to get some advice on the most cost efficient way to update this rental unit. I've attached pictures to give you a better sense of things. 

My initial thought is to do the following, but please let me know what you guys think. These are rough estimates. 

New Paint  - $2500

Kitchen cabinets repainted - $1500

Kitchen Countertops redone (granite) - $2000

Kitchen Island instead of current setup - 1500

Kitchen floor redone (allure) - $1000

New bathroom vanities - $500

Do you guys have any advice or would you do things differently? Here are attached pictures. 

@John Casmon @Brie Schmidt

Thanks! Im hoping to finish up the upstairs unit in the next two weeks or so. I'll update pictures once that is done. 

"I'm hoping I can finish this to get it rented by August 1st. We'll see how this progresses. I'll add pictures soon. " LOL

I finally got the unit rented our starting October 1st! I wrote another blog post about it below! @Christi Hawkins, @Jeff Burdick @Leo Kwok 

https://www.biggerpockets.com/forums/843/topics/634666-first-apartment-rehab-finished

Long overdue post. @Brie Schmidt, @charlie shields

Backstory - I closed on a 4 unit house January 31st of this year with the idea that I'd rehab the units over time and rent them out. I decided to start in the basement and get that out of the way. I thought the rehab was going to take about 3-4 months (super naive for a first timer) especially since I was doing most of the work myself and it ended up taking  just a bit longer - a cool 8 months from start to finish. 

With that being said, the list of improvements include

• Fresh paint job
• Brand new Allure flooring (done myself with the help of my dad, friend (friends apparently don't really like working for hours on Saturdays and Sunday) - shout out to @Ryan Canfield for extra help! 
• Brand new cabinets
• Brand new granite
• Quick Bench (LOVE this in small apartments)
• Egress Window
• New wall heater (also has central heat but it's controlled on first floor)
• New baseboards and quarter round install

A couple thoughts I had after the project was done. 

• I could have easily paid someone a couple thousand bucks to do it and complete it faster. This would have saved me money in the long term but the knowledge I gained was invaluable. 
  • For any other project, I have to weigh the cost saving of doing it myself versus paying someone and getting it done quicker (thus getting rent quicker) and probably much better looking 
•  The floors are uneven and I should have used some self leveling in the kitchen since there are some dips there but once the floor was done, there was nothing I could do.
• I was able to get it rented out for $1000/mo starting in October once all was said and done.
• I'm too lazy to look at exact costs but I'd guess everything all in was about $8-10K.

Thanks. I'm going to be some research on a couple markets and then start reaching out to brokers. Appreciate the help

Thanks @Michael Lee. 

Those are all things I should definitely be thinking about as well. I guess the first step would be to define exactly what I'm looking for (neighborhood type, amenities, distance from expressways, etc) and other criteria I'd consider. I have a rough idea of what I'd like but it makes sense to sit down and write it all out and then see if there is anything that might fit that. 

What's the best way to find deals at this level (16+) units? Would it be through commercial brokers? I'm trying to develop relationships now to get an idea of what's out there. 

Hi everyone,

I own one rental property and I am thinking down the road of what I'd like to do. I'm going to buy one more property in the Chicago area using an FHA loan and then I want to move on to bigger things. I really love the idea of owning medium to larger size multifamily value add properties. I like that the value is derived from the NOI and cap rates in the area - that gives the owner a lot of ability to dictate the price by lowering expenses and maximizing revenue. I was hoping to get some advice on what others have done in the past and what sorts of things you look for in properties. I'd love to hear stories on your experience.

PLAN: 

I'm hoping to purchase a 16 unit+ in the next two years. I'd love for it to be a value add property where I can refinance all my money out in the near term (1-2 years) once everything stabilizes. I'd raise money through friends and family. I'd love to hang out to the property long term but open to 1031 up to something larger down the road. 

Considerations:

• Is the population growth in the city positive? 
• Current cap rates?
• Room for improvement? 
• Will I get rehab budget from friends/family? Can a bank give me this money?

I'd be looking to invest in the MW. I'm considering Milwaukee, Quad cities, Columbus but open to others. I'd like to focus more on the process than any specifics at this point but I did want to give an idea of the types of cities. 

For people who have done this before, what are some things I should be thinking about? How did you go about finding deals? Was it through networking or just loopnet (I feel like people hate this lol) and just throwing out offers and seeing what sticks. Since I am in it for the long haul, I'm not going to rush into something but I feel like there are deals to be had with the right approach. 

Appreciate the help

@Christi Hawkins Thanks, hopefully I'll have some updated ones soon! 

@Jeff Burdick It's located in the Kilbourn park area. 

@Leo Kwok I can't wait to hear it, let me know if you have any questions. 

Update as of 6/18/18

5 months or so into owning my property and I couldn't be happier! I took over the building with only 1 tenant in place and was able to quickly find a great tenant! I was tempted to take a couple less than stellar tenants because I wanted to fill the place quickly but ultimately waiting an extra 3 weeks really saved me a ton of headaches. I started to print a 1 page info sheet listing rent, parking, info about the unit, etc. It really helped me be consistent as I realized I was answering tenant's questions differently (how much is the garage?, etc). 

I'm also in the process of updating the basement so I could get that rented out as well.  This process has taken me WAY longer than I expected - although I think it's just naivete on my part thinking I could rehab a basement in 1.5 months myself. The renovations include installing an egress window, installing allure flooring, new kitchen, paint job, trim, etc. I'm hoping I can finish this to get it rented by August 1st. We'll see how this progresses. I'll add pictures soon. 

In terms of issues, just today I had to call a plumber for the first time. Other than that, I've had small leaks here and there but nothing too bothersome. I'm really excited to get the renovations done and will start looking for property #2 soon... although the Chicago market is pretty tight right now. 

Update as of 1/1/2018. 

Finally a positive update, I found (well, my agent) an off-market and we ended up getting it under contract 10K under asking! I couldn't be more excited and nervous to finally start my investing career. I will be house hacking this first property and updating the units one at a time. They are in rentable condition currently but I do want to update the units as to get the highest rents possible and best possible tenants. I'll keep everyone updated on that progress. 

The property is zoned as a two-unit but has 4 livable areas. There are three 2br and one 1br in the basement (with a ceiling height of 6'10"). The height and zoning will cause some insurance issues. I plan on AirBnbing the basement unit while I renovate the other units. I still need to figure out what I'm going to do with the basement. I can try and rezone the property and dig it deeper but that's expensive and there's no guarantee I can get it rezoned. We'll see. I'm hoping to get $1300, $1300, $1200 once everything is fully updated.