All Forum Posts by: Magdalena Elliott

Hi John - the basement hasn't been improved yet beside the demolition of that was there before. Because I was planning on adding a separate entrance to the basement (SDU) my contactor also demo'd the stairs (from the main house to the basements) and in the place of stairs we created a laundry room, because the W/D needed to be added to the main house as well. 

I also spent lots of money on the structural engineer's plans (I have architectural plans that I have done as well - these went  already through permit comments and are ready to be submitted for permit). 

What made all of that  more expensive than I anticipated is the type of the house footing. It would need be underpin in 4'-0" increments and that adds on labor and the way how that needs to be done (more labor intense)

What I dont know now is if I should undo my steps - put a new stairs to the basement, do some cosmetic uplift  ( also waste all the money that I put into creating a new laundry room) and:

1. sell the house and invest that money somewhere else?

2. rent just the upper house (with unfinished basement) 

3. or create two units with putting myself into a though very financial situation and hoping that this will pay off in a future.

What would experience people do if they are just starting the journey into investing in real estate? 

House location - Capitol Hill in Washington DC- Amazing location by waking distance to the Capitol Building, restaurants, groceries. Lots of people would want to rent out here.

House's price on Zillow is $885.000

My new mortgage that I got this passed fall (after buying off my ex husband ) is $552,000 and that included $89,000 for renovation of the basement.

My new reality is that I need:

$120,000 for the contractor

+/-$10,000 adding AC to the house (my neighbor can do that for me )

+/-$10,000 for the  basement finishes

For renting basement as  LTR I could charge $1,800/mo for (1bed + DEN beautifully finished). Or do a STL with possibility of getting much more for that.

And I would also want to rent the rest of the house for +/-$3,300/mo

Currently my monthly mortgage payment is $3700 and that's a stretch for me. 

I know that it's a long time till I will see the money, but what approach is worth perusing?

And would it make sense to refinance the house after the renovation and do a BRRRR.

If not, what would you do? I would love to get input from someone from this great community.

Magdalena

Hi, I am new to Bigger Pockets and would love to hear your opinion.

I am a house owner in a great area of Washington DC.

I bought my row house with now my ex-husband in 2008. The house grew in value because of a prime DC location. Last fall I bought out my ex out of the house with a new much higher mortgage including cash for renovation on the basement.

I needed basement rental income to pay for the new mortgage. After that I also planned on renting the main house and buy a new place for flipping or a duplex where I could rent out the other place.

What am I struggling with is investing into my house worth all that hassle and am I putting myself into a financial disaster?

I knew that I had to underpin the basement to create a Single Dwelling Unit because of the height restrictions. I am an architect and with a help of a friend who stamped my drawings we submitted for permit. Permit comments increased cost of my construction from around $85,000 to $120,000 (because of the structural requirements). In the process of all that my contractor demo’d the basement and started doing some other things, so I already invested some chunk of money.

With the new price increase I will need to find another $40-50.000 for the renovation. Looking at my house as a long-term investment, should I put myself in all that hassle or should I bite on already spent money and sell the house and invest into something new?

I am wondering what experienced people would do, as I want to start on the journey with rental properties and maybe some flipping.

Really appreciate anyone’s input.

Magdalena