All Forum Posts by: Karen F.

Brandon, 

I too buy them ugly -- bought an insulbrick falling down duplex which had holes in the sides, and was sitting next door to my first rehab back in 2008. Bought for $48k, $130k in renos, rented it for $2k a month for 3 years and then sold it to the tenants for $285k. 

Triplex, expired listing ... ugly! Bought for $85k, put in $100k with new kitchens, baths, a gorgeous Victorian paint job on the exterior ...  $3500/mo, $330k estimated value. 

Another lovely old rundown Victorian ... purchase $100k, renov just over $100k, held as rental ($2500/mo); sold for $370k. 

I'm doing my first fire damage rehab now. Love anyone's input! I have been told i "Have To!" gut it to the studs. It's a beast of a brick house, circa 1905 and all plaster and lath, probably 5200 square feet.  I bought for $78k and hope to sell for $375k+  I want to invest under $200k.

My question: With the size of this, I have literally 14,000 square feet of drywall if I go to the studs. A total demo and total new drywall and replacement of trim is adding up to nearly a $60,000 investment.

 My preference is selective demo,  bleach cleaning and spraying everything with Kilz , but only truly gutting the two rooms that were nearly demolished by fire (2nd and 3rd floor, one corner), all the ceilings, and the central hall walls from top to bottom. I hope to use the open walls and ceilings to run new wiring, the new ductwork (removing rads), and new plumbing. This limited demo will, I believe, save $30,000 in demo, drywall and trimwork. 

My question is: do  I really "HAVE TO" gut to the studs? 

Thanks! Karen 

Brandon, 

I too buy them ugly -- bought an insul brick falling down duplex which had holes in the sides, and was sitting next door to my first rehab back in 2008 ... obviously not helping my property value! I got it for $48k, transformed it into a single family house investing $130k in renos, rented it for $2k a month for 3 years and then sold it to the tenants for $285k. I bought a rundown triplex for $85k, put in $100k with new kitchens, baths, a gorgeous Victorian paint job on the exterior ... and now I make about $3500/mo, and it's so pretty! I bought another old house with broken windows and crumbling mortar for $100k, invested just over $100k, rented for $2200/month for about 3 years also, selling it in 2016 for $370k. All were big and ugly, and turned out gorgeous!

I'm doing my first fire damage rehab now. Love anyone's input! I have been told i "Have To!" gut it to the studs. It's a beast of a brick house, circa 1905 and all plaster and lath, probably 5200 square feet.  I bought for $78k and hope to sell for $375k+ (it could go higher, but it's a transitioning neighborhood ... I don't want to bank on anything over the highest previous sale.)

It needs an enormous new roof (taking off slate, tile, and a mishmash of other stuff, with lots of dormers and valleys and a flat section ... and a front porch that needs rebuilt.) It also needs all mechanicals.  With the size of this, I have literally 14,000 square feet of drywall if I go to the studs, according to 2 drywall bids. A total demo and total new drywall and replacement of trim (it has gorgeous original trim throughout ... removing lath and putting up board means the trim won't match anymore!)  -- this is adding up to nearly a $60,000 investment -- it's just a little too much, acknowledging all the other money I have to spend ( 2 HVAC units, new wiring, new plumbing for 3.5 baths, a kitchen and a new roof; new flooring throughout, paint inside and out, gutters, downspouts, brick repointing.....)

 My preference is selective demo,  bleach cleaning and spraying everything with Kilz (there is some mold, which I'll remove -- and some smoke, which we'll clean and encapsulate), but only truly gutting the two rooms that were nearly demolished by fire (2nd and 3rd floor, one corner), all the ceilings, and the central hall walls from top to bottom. I hope to use the open walls and ceilings to run new wiring, the new ductwork (removing rads), and new plumbing. Sure, there will be some wire to fish and maybe a little wire mold ... but I think I'll save $30,000 in demo, drywall and trimwork. 

My question is: do  I really "HAVE TO" gut to the studs? Some folks say there will always be lingering odor if I don't coat every last thing behind the walls. Some say it smells fine now and they're not worried. Love to hear anyone else who undertook something similar weighing in! 

Thanks! Karen 

Trenton, Hi! Sounds like you know what you are talking about as far as Cat 5/ethernet. I am at a loss on this ... what rooms would you run this to? What would I expect to pay for adding this to my rewire? What do you do; leave it hanging in the basement for eventual hook up? Sorry if I sound like a wiring idiot, but I haven't done this in the past and it seems like modern buyers would want it. 

Becky .. thanks for the high velocity tip! I hear about it all the time but haven't found a great resource in Pittsburgh, PA. Anyone know someone I should have look at mine, in Pittsburgh?

Thanks Dave --- good point. Comps: none mention Cat-5, all are forced air, most talk about new windows and added insulation -- but I see that as a bigger deal on a frame house than a brick? I was certainly planning on insulating the attic.

Hi all!  Tackling a nearly 5,000+ square foot Victorian ... a gorgeous home with stunning woodwork, 7 beautiful oak and maple original mantles ... but also, a fire-damaged nightmare which I'd like to renovate for under $200,000 -- wish me luck!

Despite pressure to completely gut the house, I am planning a "selective" demo -- pulling up all the hardwood flooring to the subfloor; demo-ing most ceilings and several interior plaster walls but not all -- and no exterior plaster walls except where fire damage took place. I'll paint oil-based Kilz on any exposed char or smoke damage post demo, add new HVAC and plumbing, do a complete rewire, install 3.5 new baths (only 1.5 are new; others will be re-dos) and a new kitchen. 

My question is, I have to install new HVAC and new wiring -- while I'm at it, should I install Cat-5 wiring? Do you do this in your high end flips? (I never have before, but I can see it would be nice not to have to fish wires for the new owner.)

Also, this house is huge and has (intact) radiators throughout. When confronted with this, I often install some ducted AC and leave the radiators. I've also done mini-splits, but I'd need so many. I have not yet done high-velocity AC. What do you do? This is a circa-1900, balloon frame center hall home -- hall with 4 rooms surrounding it on each of 3 floors.

Thanks!

Karen

Hi Eric,

Pittsburgh born and bred. What I see in Penn Hills is that it is a strong rental area but the schools are not so great, and values are not appreciating.  I'd say at a low acquisition price and modest rehab you're fine on a flip or rental, but don't look for this area to take off like a rocket, or for a property you list to fly off the shelf in days. Happy to offer more insight if you want ... feel free to PM me.

Karen

Thanks everyone for the input. I don't consider myself a "flipper" ... I buy big, OLD houses with MAJOR reno needs, and hold them for at least a year, most frequently investing well over $100,000 in the renovation. A "slow flip" is what I call it, and sometimes I hold these SF homes as a rental after a full reno to get a little depreciation and income, too. I may just decide to continue to be satisfied with my 15% capital gains tax, partially sheltered by depreciation on my long-term buy & hold rental portfolio, and use the stock market holdings in my inherited IRA as some diversification, since I'm almost entirely out of the market these last 10 years, and totally concentrated on real estate investing. At least until we see if the tax code changes substantially under the new administration.

Wishing everyone a successful, healthy, happy 2017! Many thanks for the generous sharing of knowledge!

With regards to what Brandt said (about using a tax deferred account for a tax deferred investment -- real estate) .... I agree, but I think it can be very tax efficient if you're flipping. I have an inherited IRA as of about a month ago, and I just saw a cheap foreclosure I think I can make a fast $60,000 on. I hate doing short term flips due to taxes (ordinary income rates), but I'd LOVE to do this in my IRA. Two things are making me hesitate: 1) I don't know how to do it (ha!); and 2) time constraints, because I have two renovations underway already AND I'm the executor on this complicated estate.

But I welcome any assistance with figuring out how to flip in that IRA in the years ahead. I'd LOVE that!

Tim, I'm an investor looking for help on a big clean out job, if you have any interest in bidding it please reach out! Thanks! 

Karen

I think it's time of year. Maybe also the turnover in administration, given your location? (I don't know your market.)

Consider offering 1st month free, first month half price, or just dropping rent -- having it vacant costs you $2300/mo, so dropping it $200 and getting it rented might be worth it. Consider making your new lease expire in the spring or summer (a 16 month lease, or 18 month lease) ... explaining that it will be better for both of you as far as them having greater choice -- and explain that's also a reason they're getting such a great deal on rent!

Good Luck!