All Forum Posts by: Frank A.

Curious if someone has the formula(s) to compare if you were to just rent vs house hack? 

Quote from @Russell Brazil:

Quote from @Scott Mac:

Quote from @Russell Brazil:

Quote from @Frank A.:

Hey BP, 

My wife and I are getting relocated to DC this summer and the only way we can get everything we want in the city is by performing a "live and flip". We're going to buy a fixer with a 203K construction loan and will do a complete gut renovation. We are nervous about this because these homes are all early 1900s builds. We've never done something so old before hahaha. 

We plan to open up the main floor and add a half bath. The upstairs we'll create an in-suite bathroom for the master and add an additional bathroom (if there's space). The basement we plan to finish as a studio with full bath and kitchenette, "apartment"/Mother-in-law suite so that we can rent it out and house hack. 

For the experienced DC rehabbers, what kind of surprises in these renovations should we prepare for and how do we know if a contractor is prepared for them? Thanks in advance. 

Post WW2 rowhouses found in say Brentwood or Riggs Park will offer an easier more straightforward rehab. Older ones in Shaw, Columbia Heights and Petworth can be more complicated.

I generally advise against doing a basement digout for beginners.

Also realistically if you're going to be planning on doing a 203k loan, youll need to target properties that are stagnant on market...which will generally mean willfully over paying. On a new to market property you have virtually no chance of getting an offer accepted with a 203k loan. Hatd enough with conventional financing competing against cash. Avout 1/4 of transactions in DC are all cash. 

 Hi Russel,

What's the problem with the 203k in DC (that's where it's from, you'd think they would make it work there)?

 Properties here typically get 5-20 offers. 25% of all sales are all cash. A 203k loan will take 60-90 days to close, so it simply is a loan product that can not be used in a market as competitive as our in most cases. 

I'm surprised to see a moderator with such a pesimistic attitude on a forum meant to inspire and motivate... On the positive side, that also means 75% of the homes sold are not cash. So far I've had two 203k offers accepted but we just couldn't agree on price. 

Closing times are going to be longer but my lender has schooled us on ways to accelerate it like buy having our HUD consultant and 3 contractors for bids picked out ahead of time. To include a default scope of work built that will just need tweaks from property to property. 

With these measures in place we think we'll be able to close in 45-60days vs the 60-90 average. 

As they say, a savvy investor will always find a way!

Quote from @Jack Seiden:

Quote from @Frank A.:

Hey BP, 

My wife and I are getting relocated to DC this summer and the only way we can get everything we want in the city is by performing a "live and flip". We're going to buy a fixer with a 203K construction loan and will do a complete gut renovation. We are nervous about this because these homes are all early 1900s builds. We've never done something so old before hahaha. 

We plan to open up the main floor and add a half bath. The upstairs we'll create an in-suite bathroom for the master and add an additional bathroom (if there's space). The basement we plan to finish as a studio with full bath and kitchenette, "apartment"/Mother-in-law suite so that we can rent it out and house hack. 

For the experienced DC rehabbers, what kind of surprises in these renovations should we prepare for and how do we know if a contractor is prepared for them? Thanks in advance. 

The biggest thing is $$$$$ my contractor always tells me we “can do anything in exchange for money” 203k on this type of rehab is often very tough because the budget can go much over the loan approved amount and there’s no way to add after the fact, your looking at 200k+ for a total gut could push 300k with a basement digout, if your up for that abd probably budget you could possibly add some equity (though if reno costs spiral you could easily end up underwater) but I’d really consider if it’s safer/easier to go turn key. 

This is good insight. We are factoring enough cushion for a $300k Reno. 

@Russell Brazil thanks for your insight as well. I'll be sure to ask qualifying questions on party walls and underpinning. 

Sadly we didn't like Brentwood or Riggs Park. We're focusing on Columbia Heights and Trinidad. 

It's been hard looking for turn key, we've seen so many bad, cheap, flips asking for top dollar. My wife and I just can't stomach paying for a bad flip that we'd have to redo at our own expense. 

If you're any of you have any clients with any upcoming listings in Columbia Heights or Trinidad send please them my way 😁

Quote from @Russell Brazil:

Quote from @Frank A.:

Hey BP, 

My wife and I are getting relocated to DC this summer and the only way we can get everything we want in the city is by performing a "live and flip". We're going to buy a fixer with a 203K construction loan and will do a complete gut renovation. We are nervous about this because these homes are all early 1900s builds. We've never done something so old before hahaha. 

We plan to open up the main floor and add a half bath. The upstairs we'll create an in-suite bathroom for the master and add an additional bathroom (if there's space). The basement we plan to finish as a studio with full bath and kitchenette, "apartment"/Mother-in-law suite so that we can rent it out and house hack. 

For the experienced DC rehabbers, what kind of surprises in these renovations should we prepare for and how do we know if a contractor is prepared for them? Thanks in advance. 

Post WW2 rowhouses found in say Brentwood or Riggs Park will offer an easier more straightforward rehab. Older ones in Shaw, Columbia Heights and Petworth can be more complicated.

I generally advise against doing a basement digout for beginners.

Also realistically if you're going to be planning on doing a 203k loan, youll need to target properties that are stagnant on market...which will generally mean willfully over paying. On a new to market property you have virtually no chance of getting an offer accepted with a 203k loan. Hatd enough with conventional financing competing against cash. Avout 1/4 of transactions in DC are all cash. 

 Thanks for the insight, what complications happen during basement dig outs that make you advise against beginners doing them?

Hey BP, 

My wife and I are getting relocated to DC this summer and the only way we can get everything we want in the city is by performing a "live and flip". We're going to buy a fixer with a 203K construction loan and will do a complete gut renovation. We are nervous about this because these homes are all early 1900s builds. We've never done something so old before hahaha. 

We plan to open up the main floor and add a half bath. The upstairs we'll create an in-suite bathroom for the master and add an additional bathroom (if there's space). The basement we plan to finish as a studio with full bath and kitchenette, "apartment"/Mother-in-law suite so that we can rent it out and house hack. 

For the experienced DC rehabbers, what kind of surprises in these renovations should we prepare for and how do we know if a contractor is prepared for them? Thanks in advance. 

Quote from @Ashish Acharya:

If your losses are not limited not or the losses are limited now but can be released in the future, you should be cost segs while you can still get 100% bonus depreciation in 2022.

But more info is needed to conclude.  

 I'm in the  same boat but didn't understand your response. Can you expand?

Looks like fun, sadly I won't be in town. Are there going to be any meetups dur 17-26 Mar?

I'm just seeing this post. Will there be a Jan 2023 meet up? 

Thanks for the responses everyone. All the leases are month to month. Are there any Construction/Rehab clauses for terminating leases in PDX? 

Hey Portland REIers,

My agent just sent me an amazing deal for a multifamily BUT I'd have to inherit tenants that are 70% undermarket rents. The property won't cash flow until I get the tenants out, rehab the units and lease tenants at market rents. How hard is it going to be to terminate the existing leases? What options do I have for a quick turn?

I'm still waiting to hear from a lawyer...but want to ask the hive mind first!! 

Thanks in advance!