All Forum Posts by: Laura Levine

We think downstairs would rent for $2200.  We had considered living upstairs ourselves for a year, but we have lived in one bedroom condos our whole adult lives and as we are planning to start a family, we want a bit more space now for ourselves.  

Good morning,

As I sit here buying yet more construction supplies for the last finishes for our first major renovation, I'm feeling pretty overwhelmed with how the numbers are adding up. So I thought I would post about our experience in the hopes of getting some reassurance that I'm not too far in over my head, or in getting some feedback for our next move in REI. So here are our details:

90 year old, 2 family home approximately 2200sf. Bought as an unofficial estate sale, hadn't been updated in probably 30-40 years. Paid 315k, it appraised at 335k. We bought with 5% down with a 5/1 ARM at 3.25%. We plan to live downstairs for 3-5 years and rent out the top floor. Rental estimates are approximately 1600-1700/m for upstairs.

Construction estimates initially came in around 50k for a pretty much complete remodel.  As soon as we opened the walls we came into more fun "surprises" and ended up redoing 75% of our electrical and 65% of our plumbing and totally redoing the floor plan on the main floor, for a total of 12k in unexpected costs (obviously sprinting past our 10% contingency).  We are just about 1-2 weeks away from completion now and we are a month behind and now our approximately construction costs are closer to 80k.  We have used mostly interest free loans from our parents (20k), a 25k personal bank loan at 6.5% for 60m, our own cash (25k), and now we are looking at putting the rest on credit cards with cash advances (0% interest for 15m).   

Our current carrying costs are about 2485/m with PMI. Once we are done with the construction and have 3 months of rental income we plan to refinance into a more traditional 30yr mortgage which should lower our costs by about 200-300/m. Our real estate agent indicated that she thinks our house will be worth at least 400k when we are done.

How do you think we did?  Worthwhile investment or money pit?  

Hi All,

I'm looking for a general contractor to help with a 2 family house reno. in Northern Jersey.  We are redoing both kitchens, and two bathrooms also with some reframing work.  We already have architectural plans drawn and are ready to start ASAP.   Please send any recommendations my way.  Thanks so much!

Hi Everyone,

My husband and I just bought a 2 family house and we don't have enough equity for a HELOC, so now we are looking for a personal loan to do some construction. We are looking for recommendations for lenders who can do longer term (5+ years) low interest loans. We are willing to do a secured line (we also have a condo that we could use to secure the loan). Any recommendations would be greatly appreciated! Thanks!

@Jeff Stewart The number sound pretty good to me too! I'm under contract on a 2 family house in Hawthorne and will be doing something similar with our house (total gut of of one unit, and some updates in flooring and the kitchen on the second unit). I'm in the process of looking for contractors..can you tell me where you found one who specializes in flips? We plan to live in this house for a few years, but I'd like to start with some single family flips after this project. Maybe once our respective projects get started we can compare notes and/or check out each other's properties? I'd love to collaborate more hands on with people doing similar REI's!

Hi Jeff.  Congrats and good luck.  At lot of the time people will share the purchase price (or what you're hoping to purchase it for), how much you plan to spend on renos, what type of renos you think it will need, and your timeline for flipping it.  Plus any other details you want to share...people tend to get pretty detailed on this site as it elitists a lot of great feedback from the BP community!

Thanks for your feedback, that's what I was hoping to hear! 

Hi All, We are renovating a kitchen in a small house that we are going to live in for a few years and then rent out. The kitchen is small and we are trying to decide what finish to do the cabinets (they will be solid wood) that will help the kitchen to look bigger, but will also be durable enough for tenants. Has your experience been that white cabinets age faster and/or show more wear and tear? Thanks for your feedback!

Hi All,

We're under contract on a multi-family (2 units) in Northern NJ and I've been in talks with a design/build company regarding plans and services. We are going to open two walls for kitchens, gut and rebuild one kitchen, gut and rebuild a bathroom, add a shower to a half bathroom, and finish a basement. They are offering to do the plans for everything for $1500 or $1200 without the basement plans. Is this a good price? They also said they would give us the plans after they draw them so we could get other estimates for the actual construction.

Also the GC said as of 2006 it became mandatory to have architectural plans for 2 families in NJ...does anyone know if this is accurate? Thanks so much for your feedback!!!

@Tia Power We are actually in a similar position...we are buying a 2 family in Northern NJ with a FHA loan. You mentioned that you have the money for the down payment already, so why would you need an additional 10K? Do you just need the money for closing? If so, that shouldn't be nearly as much and maybe you would be able to save and/or borrow a smaller amount from a friend/family member? I know it's kind of scary to put all of your eggs in one basket, but think of it as temporary and as soon as you close hopefully you'll start earning some of that money back and be able to rebuild your nest egg?