Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: John Meyers

John Meyers has started 3 posts and replied 28 times.

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9
Originally posted by @Account Closed:

And, you found a rare bird. I've never seen a corner model like that one. What I wonder, is where do you make a sandwich?

Looks like a decent unit. 

Yeah. The other side only had a lonely Frig so I guess you would need an island.  Ha ha..

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9
Originally posted by @Account Closed:

All the obvious points have been made.

For rentals, I have a strategy of building as indestructible as possible. I see little value in replacing an old solid-wood kitchen that looks worn with a brand-new particle board piece of junk that will return to dust in a few years. On the other hand, sometimes the old is just not going to work either!!! 

Kitchen 1 Before - lol - those are actually custom cabs that someone put a lot of thought into - lol. I think the original build had zero cabs, like the the other unit.

During - walled-up the hole, brought the electric to code.

After. The opposite wall has a new bank too, that's where the sink is, and there is a larger counter-space.

Kitchen 2 Before. Wow - lots of cabinets - lol.

After

The cabinets are custom, 100% solid wood, with a super-tough finish. The drawers and doors are soft close. The color matches the period/rest of the house. These will look great 50 years from now, maybe 100. I could have bought the junk for about 1/2 the price, but those would have looked like junk in 5 years. What is not in the photo are the medium-priced stainless steel sinks (went with a slightly thicker gauge, deeper bottom) that will also look great in 50 years, and the super cheap fixture for $29 that looks great and will need to be replaced, as all fixtures do.

So the question is which is more wise? Spend $ now or spend it later? I certainly increased my rent potential, and even more so the marketability, by adding nice cabinets and increasing the function. But, I did not really increase the rent by much (the marketability is through the roof), and really the increase had more to do with the over-all quality of the entire unit than it did with just the kitchen. My tenants however will not want to leave, as they will be hard pressed to find anything out there as nice, not to mention easy to clean and keep looking nice.

For me, I will not have to replace the cabinets ever. I chose a classic style that goes with the house and will never go out of style. By getting custom, I did not have to screw around trying to make stock sizes fit, and they do not look out of place from trying to make the wrong size work. Notice also how they go all the way to the ceiling. As an added touch because my cabinet guy is like me and loves to put on that special touch, there is crown at the top and the exposed sides of the cabinets are recessed-panel to match the craftsman period.

To me, this makes sense for a long-term buy-and-hold rental. Not so much for a flip, where 19 out of 20 buyers have no idea what they are looking at, nor do they pay extra in most cases when they do. I can't tell you how many "high-end" new-construction homes I've seen with junk cabinets.

Cabinets - $5000k per kitchen, installed. My guy says he would have charged anyone else $6750. Pays to play cards with the cabinet guy.

Counters - $450 per kitchen, installed.

Sink - $100 each

Fixture - $29 each

Of course I also updated the electric and plumbing to code/rehab, which was extra, and I did all the other carpentry myself.

I thought it turned out pretty good.

PS - Luxury vinyl plank over existing hardwood floors. Love that stuff. Wish I had picked the other color option on this one though - still not too bad of a match.

I stand corrected Merritt. -- I just came across this sink when looking at buildings for someone.  Ha ha.. 

Post: How to approach a seller that pulled their listing

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9

Get pre-approved for $650,000 with a mortgage broker first so that you have something in hand that you can show them.

Then, leave a note on their door with your contact info and wait a couple days. -- If no response, maybe ring their doorbell on a weekend (during the day).

They may be more likely to entertain your price since you won't be using realtors, however, make sure you have a good real estate attorney (and hopefully they will too) so that the deal goes smoothly once a price is negotiated verbally.

Good luck!

Post: Is it really about not spending the money you make?

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9

Usually with buy and hold investing, you are basically putting enough down to then have the renters buy the property for you over the next 30 years.

As someone mentioned earlier in this thread, you should also find a good job so you can live a comfortable lifestyle as well. -- You shouldn't have to live on Ramon Noodles and clothes from Goodwill so that you can afford repairs when things breakdown.

Many of the investors who are posting advice like that are probably not making much at their day job and hence suggest that you live a humble life for the sake of building up your next egg of rental properties.  -- Which is fine too if you are in that position.

Retiring before 65 with a few paid off rental buildings is the way to go (you can still manage them for monthly income or sell the buildings and add the proceeds to your retirement fund).

Good luck,

John

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9

Thanks Merritt.

Nice work.  I know what you mean about weighing you time against the cost to do it more quickly.

Most of the old Chicago buildings we see have kitchens that were remodeled in the '70s so those sinks are long gone. -- We do see quite a few of the old 1950s stoves though.

Thanks again and good luck. You definitely know what you are doing!  :-)

Sincerely,

John

Post: 1st year college student thinking of dropping out to pursue REI

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9

I would feel guilty talking anyone out of going to college, however, I see where you are coming from.

I went overboard with 2 degrees (marketing and hotel/restaurant management) and an MBA. -- If I knew that I was going into real estate, I would have stopped with my marketing degree and dove into real estate (networking like crazy right after college).

If anything, take some coursework or read books on the following: 

1. Writing - Someone gave me a book called "The Elements of Business Writing" when I was 21 and that one book helped me more than anything.

2. Sales/Networking - Good books on proven sales/networking habits, not seminars with a bunch of useless feel-good fluff.

3. Learn how to type well - Being a good typist (min 40 words/min) will make everything much easier no matter what you end up doing in life!

Lastly, books on saving, investing, and managing properties will help you more specifically with growing your real estate investment portfolio.

Hope that helps.

Good luck,

John

Post: Out of State Investing -- Any Favorite Places?

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9

Stay near metro areas but on the outskirts where commercial building has taking place. -- I'm in Chicago and always look at the "Capitalization Rate" which is the net income divided by the value of the property (7% or more is ideal).

I've seen 3+ unit properties with 'cap rates" around 10% selling for $100k to $150k in Northern Illinois (Antioch, IL area) which is also close to Milwaukee, WI.

It is best if you can manage the property since most management companies charge 6% to 10% which will eat up a lot of your profits (and keep you up at night if you don't choose a reliable property manager!).

If you can use this model with an hour's drive of where you live and manage yourself, you are golden. -- Just be ready to spend $20,000 to $50.0000 to fix up the property since renters want units that are somewhat updated and clean (this also helps you keep them as tenants longer).

Good luck!

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9
Originally posted by @Account Closed:

All the obvious points have been made.

For rentals, I have a strategy of building as indestructible as possible. I see little value in replacing an old solid-wood kitchen that looks worn with a brand-new particle board piece of junk that will return to dust in a few years. On the other hand, sometimes the old is just not going to work either!!! 

Kitchen 1 Before - lol - those are actually custom cabs that someone put a lot of thought into - lol. I think the original build had zero cabs, like the the other unit.

During - walled-up the hole, brought the electric to code.

After. The opposite wall has a new bank too, that's where the sink is, and there is a larger counter-space.

Kitchen 2 Before. Wow - lots of cabinets - lol.

After

The cabinets are custom, 100% solid wood, with a super-tough finish. The drawers and doors are soft close. The color matches the period/rest of the house. These will look great 50 years from now, maybe 100. I could have bought the junk for about 1/2 the price, but those would have looked like junk in 5 years. What is not in the photo are the medium-priced stainless steel sinks (went with a slightly thicker gauge, deeper bottom) that will also look great in 50 years, and the super cheap fixture for $29 that looks great and will need to be replaced, as all fixtures do.

So the question is which is more wise? Spend $ now or spend it later? I certainly increased my rent potential, and even more so the marketability, by adding nice cabinets and increasing the function. But, I did not really increase the rent by much (the marketability is through the roof), and really the increase had more to do with the over-all quality of the entire unit than it did with just the kitchen. My tenants however will not want to leave, as they will be hard pressed to find anything out there as nice, not to mention easy to clean and keep looking nice.

For me, I will not have to replace the cabinets ever. I chose a classic style that goes with the house and will never go out of style. By getting custom, I did not have to screw around trying to make stock sizes fit, and they do not look out of place from trying to make the wrong size work. Notice also how they go all the way to the ceiling. As an added touch because my cabinet guy is like me and loves to put on that special touch, there is crown at the top and the exposed sides of the cabinets are recessed-panel to match the craftsman period.

To me, this makes sense for a long-term buy-and-hold rental. Not so much for a flip, where 19 out of 20 buyers have no idea what they are looking at, nor do they pay extra in most cases when they do. I can't tell you how many "high-end" new-construction homes I've seen with junk cabinets.

Cabinets - $5000k per kitchen, installed. My guy says he would have charged anyone else $6750. Pays to play cards with the cabinet guy.

Counters - $450 per kitchen, installed.

Sink - $100 each

Fixture - $29 each

Of course I also updated the electric and plumbing to code/rehab, which was extra, and I did all the other carpentry myself.

I thought it turned out pretty good.

PS - Luxury vinyl plank over existing hardwood floors. Love that stuff. Wish I had picked the other color option on this one though - still not too bad of a match.

Thank you Merritt.

I like all of your ideas. -- That is really where I was going with my kitchen question. --  The cabinets that are more solid & custom are more durable for long-term rentals.

In addition, going to the ceiling provides more cabinet space.

Nice work! -- That old kitchen sink cracks me up. -- Were you able to sell that to an antique store?

Thanks again, John

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9
Originally posted by @Pat L.:

We update kitchens. baths & flooring. New secure entry doors always add pizzaz.

BUT we get everything at contractor auctions or cut prices from the big box stores.

This 60's kitchen was upgraded using damaged cabinets I collected over 12 months.

All appliances were scratch & dent.

Cabinets $981& it rented immediately for $225/month more. Upgrading the entry doors are a big plus.

Thank for the photos Pat. -- Very impressive work!

I wish you were in the Chicago area..   :-) 

Post: Updating a Kitchen and Baths

John MeyersPosted
  • Real Estate Broker
  • Park Ridge, IL
  • Posts 30
  • Votes 9
Originally posted by @Theresa Harris:

You have to know your market.  In example 1 for a lower end rental, IF the boxes are in good shape and the faces are dated, changing only the fronts makes more sense.

Also when updating go for classic not fashionable as the latest fad changes faster (hopefully) than your upgrades.  If the upgrades won't bring in more rent, then they may not be needed.  You don't need a ton of applicants, you need a few good applicants.

Thank you Theresa. -- I agree.

For the HVAC, there were no fronts since they were all brand new systems. -- Before, the building had Just the basement boiler and radiators throughout (which he has yet to remove and cap). 

Since the boiler was only about 15 years old (installed by the previous owner), I was stunned to learn that he removed it to install the seperate HVAC systems and ductwork for all 3 units unit. -- I see why he wants to avoid paying $3,500 - $4,500/year in natural gas, however, now we are stuck with overpriced units and in area where renters expect heat to be included. -- He can at least remove the radiators and cap the pipes to provide more room in these 2 bedroom apartments.

I'm all about new windows, updated kitchens/baths, etc but I think he went over the top with these new HVAC systems..