Hello BP Investors!
I wanted to give something back to everyone here as I have learned so much over the past couple of years from all of you here on BP. I recently purchased my first investment property - a 2 family in Manchester CT and began the rehab! To fund the property I used some of my own savings, took a loan on my 401K and brought in some cash from family/friends.
Now, let me start out by mentioning that I really love doing the rehab part. It might not be for everyone but I grew up on a farm where we fixed/built everything ourselves and consider myself pretty handy - although most of what I did on this project was a first for me. I know some people can get hung up on how to complete some of the repairs but I have found that if you just take something on with an unrealistic confidence, nothing can go wrong! But honestly, You Tube has everything you need to complete basically any task - all you might need is the tools to go along with it.
I work a full time office job so I found time after work and on the weekends to do whatever I could to get the job done. Hired a GC to do the bathrooms and install one kitchen's cabinets/counter tops, a plumber to do some frozen pipe work and a landscaper for general yard clean up and lawn maintenance. Had some help from a couple friends along the way with some of the odd jobs and organized a painting party with pizza and beer which was fun and productive! Otherwise it was all me. I also have a wife and 2 kids so the help and support of my wife through all this was needed and appreciated - it wouldnt have happened without my amazing wife taking on more than I would like to put on her. I was basically MIA for a couple months. The Rehab went fairly smoothly, budget was pretty close and went a couple weeks over on time frame but I will mention one pretty big learning opportunity. I had one unit very close to being complete when I finally booked a plumber to come in and give the furnace a service and make sure it was operational (the hot water also runs off the furnace). We found a number of split pipes in the exterior walls that needed to be fixed and it took opening up a few of the walls to find and fix the issues after paint, trim, flooring was all in place. Could have been a lot worse than it ended up, the cost was negligible but set us back about 2 weeks on the rehab. Next time I will get a plumber/HVAC and electrician in before doing any finishing work.
Once the Rehab was complete I put the units up and had them rented out without much of a problem. I have my real estate license but still opted to keep it off of MLS to try save some money - not sure if this was the best choice or not, i'll try out the MLS down the road but cash was more important at the time. I was pleasantly surprised at the rents we were able to obtain, I put together a range of what we thought we could get and listed at the high end of that range. We had so much activity that we were able to get list price and actually ended up allowing pets which brought in a bit more income.
After the tenants were all settled in I was still debating an overhaul of the exterior but couldnt decide on a complete vinyl siding job or fix/patch/paint so I waited a couple months to see if I could get some cash reserves back up to handle a full overhaul. In hindsight, I think the smarter choice would have been to move right into the refi. I will push that to a spring/summer job.
The refi process went smoothly although I think the valuation came back a bit low compared to the comps I chose. I was however able to pay back all my investors, paid for all rehab costs including labor, put a few thousand back into my pocket and i'm still cash flowing about $500 / month. Extremely happy with the results, all that's left is the Repeat part!
Here are some of the before and after pics. Hope this is helpful for some of you, I definitely have the bug and cant wait to move on to the next one!!!
