All Forum Posts by: Eric P.

I finally found some time to post an update!

After the end of August it was time to start on 're' finishing the 3rd floor so I can get moved in to the house. I also had a 'drywall party' and invited some friends over for pizza and beer and to help haul our 28 sheets of drywall all the to 3rd floor, it actually worked out really well and we had it all done in less than 30 minutes.

Anyways, back to the old format.

Things finished:

Whole house electrical rough inspection and draw (from bank) completed

Kitchen ceiling lowered for cans

HVAC up and running (makes the hot days on the 3rd floor easier)

Opened up turret room.

3rd floor

Furring strips for angled ceiling installed

All insulation installed and up to date

98% of drywall installed

Decisions made:

Moving knee wall access door from room to hallway to increase usable wall space.

Installing ethernet and coax throughout house.

Going to paint flashing for large A/C unit the same color as the vinyl siding to hide it a little.

Going to do 2 bushes with picket fence in front of A/C units.

I want to open up 2 rooms on the 2nd floor to make a sweet master bedroom with 6 windows (2 sets of 3 bay windows) and a 12' long reach in closet, I was thinking of putting some cool looking doors on it to spice it up a little. I wanted to do a walk in closet but I don't really think there is the space. The final master bedroom size will be ~24x10 not including the closet.

Challenges:

When I pulled the base board in the room on the 3rd floor I found out that half of the studs for the knee wall weren't even nailed to the floor (!) so we gutted more walls and installed more drywall and insulation.

I've had to spend ~$1500 in material alone that I wasn't counting on, just for the 3rd floor drywall and insulation...

Learning how to mud and tape drywall. Nuff said.

Lessons learned:

Beware of things homeowners have done on their own, you never know what you're going to find!

Will be painting the flashing on the big unit the color of the siding so that it blends in better.

Lowered ceiling in kitchen, note wall built out in left corner, radiator will go here, refrigerator will go on the other side in same corner. Wall will be insulated with conductive material behind it to help direct heat. Above radiator will be storage, you can see this area in a later picture.

Recessed lighting for kitchen.

Put 2 cans in butler's pantry.

We're going to put a small tiffany style chandelier light above this stained glass window. I've seen them on craigslist for $50-150.

This is the storage area above the radiator and can be seen to the left of the stained glass window, above the 2x4 frame here will be shelves, below a door for a storage area.

Showing how we're doing 2 layers of insulation in the 3rd floor, rolled out above collar ties with R13 in between.

Showing Durovent for proper air flow and 2 layers of insulation again.

Reframing 3rd floor

Opened up turret room, has since been insulated and drywalled. This is one of my favorite rooms in the house and I'm really glad we opened it up and get to show off this room now.

I didn't read it that way when I first read Tom's post, I didn't think he was saying rules of thumb weren't good in all situations, I thought Tom's post just suggested that it shouldn't stop there. But after reading it again I can see how it could be taken that the rules of thumb shouldn't be used (even though I don't think that's what was suggested).

Either way, good job Tom on getting a little spirited discussion started haha.

Thanks for the comments everyone.

@Alex Baev I talked to the electrician about it and he said the 150 we had initially planned on wasn't enough after adding the four separate units... he said he was already planning to upgrade it to 200 amp service for no additional charge. I think I may have found the best electrician in the state of Ohio, he's added so much extra stuff already and he's super easy to work with (and licensed). I talked to the HVAC guy again today and he said all 4 are heat pumps, and that 2 advantages of doing it this way is that there is more efficiency because you don't have to have the Freon stored in a reservoir if you are only cooling one or two areas and when using the heat pumps they are even more efficient than the radiant heat. I'm no HVAC guy but he seems to be telling the truth?

@Patricia Franciulli I see houses being rehabbed all the time, I know there are some community organizer types that have raised money from local governments and businesses to fix up certain neighborhoods. It would probably be hard to compete toe to toe with them as they are a non-profit and have the extra funding already in place. There is one out of state investor down the street rehabbing a house and another one was just totally updated and sold last year, but that one was owner occupied. If I had to guess I would say its mostly individuals doing the rehabs or smaller investors.

@Colleen F. Thanks! I'm trying to retain as much of the character that I can and where it makes sense to keep it. The secondary stairway was cool, likely a servants entrance to the upstairs, but was taking up roughly 20 sq ft of kitchen space, so it was better to see it go and have a nice sized kitchen. Believe it or not, a good number of older homes in the area have central air, I think its probably because there tended to be wealthier people that lived in them when forced air heat was starting to become more popular. I've come to terms with it a little more since I wrote that last post, now I've just got to find a way to maximize the positives of the A/C 'wall' and minimize the negatives, which is easier to do with the collective braintrust of BP : )

I think the real substance of Tom's post is that a rule of thumb or some "mythical math" as he calls it is not a true deep dive analysis of a property. Whether these formulas help newbies or not and what Tom's definition of "seasoned" is, is another discussion. I also think he is trying to get people to consider whether or not, and why wouldn't, a seasoned investor would be competing for a property. If its because they aren't willing to accept lower returns, and you are, then there's nothing wrong with that.

I think there are two big lessons in his post. First, it's that there is a more detailed and probably more accurate way of analyzing a deal that we could learn something from. Second, I think Tom's post should get us thinking about how a "seasoned" investor (whatever that definition is to you) would approach a deal and try to imagine the world from their point of view so we can try and think more strategically.

Just my two newbie cents : )

@Alex Baev I think the combo of providing fliers and handouts to the realtor and using the units as a selling point along with minimizing the appearance is the best way forward. The fliers from Home Depot is a really good idea though, I'm definitely going to use that one! I think the 3 turbo air units are heat pumps also. He used the 4 singles because he got a good deal on them, he said the normal price for the units alone would have been over $10,000 if we would have had to pay the normal price... who knows though? I didn't get a second opinion on the mini-splits (I probably should have).

The primary source of heat is actually radiant though, the previous owner replaced the boiler about 3 years ago, there was no way I could rip that shiny new boiler out lol

The updated panel has 100 amp service (from previous owner), and will be upgraded to 150 amp in the next couple of weeks.

3 weeks in!

Things finished:

• Secondary stairway is gone and new header installed.
• Rear porch jacked up and shimmed.
• Demo completed for electricians on 2nd/3rd floors.
• Found path for electricians homeruns.
• All wallpaper removed on the first floor.
• 4x mini-splits are installed... they are pretty ugly sitting on the driveway side of the house, I'm thinking about putting some landscaping and maybe a trellis or small fence in front of them to hide them. It's the first thing that's bothering me with the house, I don't want to be trying to sell this thing and be "That house with the ugly air conditioners"... so I have to find a way to make them less noticeable.

Things in progress:

• Tuck pointing outside is half way done.
• Electricians should be finished in the next week or two.

Next steps:

• Start 3rd floor rooms, 3rd floor bathroom, basement, exterior items. Get these finished for next draw from bank.

Decisions to be made and challenges:

• How to cover up A/C condensers outside?
• Remove a section of wall from turret room to open it up and make it more noticeable and increase air flow? Or leave it more closed off to keep the "cozy feeling"?
• Put refrigerator right next to entrance of kitchen where stairway was removed, or tuck it into the corner where the stairway used to be to open it up more? With an island being installed, I don't think that moving it to the corner will mess up the flow of the kitchen.
• 3rd floor is almost all particle board. Unexpected expense and time needed to refinish entire 3rd floor. Insulation installed incorrectly from previous owner, will need to be reinsulated along rafters.
• Things are taking longer than I expected, delays have been due to delayed start time (HVAC), incorrect A/C unit placement (HVAC), trouble finding homeruns for electricians (old house), scheduling issues.

Lessons Learned (so far!):

• Next time I am going to get more specific instructions documented and penalties for missing deadlines. I am hesitant to promise a bonus for finishing early because I think that it would encourage short cuts. If possible, do not give down payment until work starts.
• A/C units are ugly. Avoid covering the side of your house with them.

Pictures:

Showing mini-splits before the back unit was moved and downspouts installed.

Unit moved, downspouts installed (except for large unit).

Stairway removed, put refrigerator next to doorway or in corner?

Staircase again

2nd floor demo for electricians

New wires!

Showing one of the head units for the mini-splits

It turned out that 3/4 of the 3rd floor was actually particle board... so there goes my budget for drywall repair on this floor. This is why I built in a cushion!

More particle board

Thanks everyone!

Alex:

You can't really see them too great in the pictures above, but I really wanted to try and save the cove ceilings on the first floor, I think it gives a lot of character (a long with the stained glass) to the first floor. According to my HVAC guy, it would've been next to impossible to get air to the 2nd floor without messing up the ceilings, not to mention the issue of getting cold air all the way up to the third floor. I'm not sure on how people feel about them, they aren't very common so I'm trying something a little new. I got a really good price on 4 units, $6900 installed, so I couldn't really pass it up... but, if you take a look at the next set of pictures, I'm wondering if I should have because I have 4 ugly A/C condensers sitting outside now : (

Patricia:

I think it really depends on the price point and the neighborhood, I've seen houses sell in a few days and I've seen them sitting for >120 days. I there are any local realtors from the Cleveland area on this thread feel free to chime in on the average days on market!

If anyone is interested, I just posted a bunch of pictures and numbers on the house in the rehab forum.

http://www.biggerpockets.com/forums/67/topics/98446-my-first-flip--with-pictures

Ryan:

I'm a member of LELA (Lake Erie Landlord Assoc). Their members are mostly into landlording, but I've managed to find a couple of people that fix and flip. All of the members there are very helpful, they are mostly based out of Lorain county though (which is local to where I used to live). I've heard multiple stories about the Cleveland REIA(s) also, so I'm not sure their actual situation.

Hey everyone, Brandon suggested I post a little about my first rehab that I just started working on. So here goes! Please comment with any design/rehab ideas or on the bolded questions in the picture captions below.

The house:

10 min from downtown Cleveland, near Lake Erie

2600 sq ft.

4 bed/2 bath, located on a street with 1 home rehabbed recently and another in progress, ~10 houses from train tracks (not loud)

Already has updated windows, vinyl siding, half of the driveway is new, boiler replaced 3 yrs ago, newer hot water tank, roof ~5 yrs old, has a few cool stained glass windows and cove ceilings on first floor, butler's pantry, all ceilings 9.5', 2 car garage with workshop, solid foundation, finished attic, close to the city and the neighborhood is quiet for being so close to the city.

The numbers:

Purchase price: $59,000

Budget for repairs: $45,000

Cushion: $7000 (~15%)

ARV (after closing costs) (from realtor): $130,000

ARV (before closing costs) (from bank): $165,000

Repairs include total rewire updating to code, 4 mini-split A/C units, drywall repair entire house, install 2nd garage door, gut and update kitchen/2x bath (ceramic tile floor/tub surround), new light fixtures (entire house), carpet allowance for entire house (just in case), refinish hardwoods 1st floor, install mini-sump in basement to divert water to drain, paint, knocking out a wall in the kitchen.

Before:

(8/1/13)

If I uploaded too many photos, let me know, I tried to capture all the things I knew would be updated.

Welcome!

Front porch pillars need base replaced:

Front door and hardware to be refinished with new storm door:

2 car garage, will add 2nd door, don't mind Pops mowing:

Kitchen a little small, will gut and update, add an island, note 2nd staircase on left that will be removed:

Rest of kitchen:

Butler's pantry:

Wallpaper everywhere! Bay windows on left is living room. Note cool little seating in dining room, will be refinished:

Another view of dining room showing Butler's pantry door. I could use some advice on what do with that little display area, I really have no idea on what to do with it yet!

"Parlor" area next to living room, I really like the stained glass windows in this room, any advice on how to make the fireplace usable for cheap? The depth in the fireplace is ~4" so there isn't much room.

Another stained glass window:

Showing the colors:

"Common area" on 2nd floor. The are 2 rooms to either side of this photo next to the bathroom

Yuck. Will be totally gutted and updated with ceramic floors and ceramic surround:

First room with bay windows:

2nd room with bay windows:

Other 2 rooms on 2nd floor look like this:

"Finished" attic, bathroom straight ahead one room to either side of bathroom:

Cool little turret area in one of the rooms on the 3rd floor:

Disconnected 3rd floor bathroom, will be gutted and updated with refinished clawfoot tub from 2nd floor and ceramic tile floor:

Other room on 3rd floor, will replace baseboard:

@James Wise It is a larger home in the Edgewater neighborhood, I was hoping to get 130-140k (after closing costs)... but my ARV from the bank came back in the 160's, I was a little surprised! I've budgeted having 100-110k into the property (purchase+repairs) so anything above the ~20k net would be awesome. As soon as I find my camera cable to download pictures I want to get a post started in the rehab forum.