Phlemboy,
Thanks for the reply…
“Positive. What was your goal when you bought this property?”
Well, it is our first, and we originally planned to fix and flip… as I’ve explained in other threads, that is still our primary objective, but we are looking at holding it and renting it out, or do a leaase option as the back-up… But I’m having a hard time reconciling renting it because of the amount of work we are putting into it… But our long-term goal is to Flip / Flip / pay cash to buy rental… and keep going along those lines…
“If your goal was to flip, the ARV has to be less today than when you bought it. Unless of course your local RE market was immune to the decline.”
The list price is what our realtor is telling us… when we actually do list, I’ll give an update… One other factor that I just thought of that might be reflecting this, is that the property is located in a redevelopment zone… I don’t know how much this affects things, so like I said, when it actually lists, I’ll give an update…
"What was your timeframe? How much are into this project so far?
& “That reduced ARV minus your total cost to date might not be that much.”
We’ll be in it for a total of around $37K… Rents are in the $600 - $725 range (the house right next door, one of four rentals on the street, just raised their rent from $550 to $600 and it is rented, and rented right away - it is smaller house, with no dining room, no front and back porch, smaller bedrooms and another house the next street over just rented for $725 back in May I think it was after being remodeled)… Our house will also have a washer/dryer area, and double closets in the bedroom… Realtor tells me these are hot-button items for resale (he is also an investor and owns a local Help-U-Sell)
This was our first, and we expected to make mistakes along the way… legitimate questions on the way we are doing with regards to the schedule, maybe… but, because we will own it a year before selling, that will increase our ROI becuase of the lowers taxes, and who knows, maybe it will be a good think we waited… people are flocking to our neck of the woods for a higher standard of living, so that’s also in our favor… time will tell…
“Turning into a rental may work out in time but are you ready for that kind of headache?”
On the first property, No, not really… that is the plan down the road after the first two flips, but if for some reason we couldn’t sell it, we’ll start renting earlier than planned… The numbers work for a rental, we just didn’t plan to START with a rental…
“If you put a lot of high end items, it may take a while until the market improves to make a profit.”
I know how to make improvements that don’t cost alot, but have a good return and make the lady of the house happy…
“IMO, if I had only weekends to work on rehab, I’d rather buy/rehab/rent. That way you just need to make it safe and clean. No need for high end stuff.”
I am definitely with you on this…
"Just working on my own house, I was able to completely gut and remodel my 5’ X 7’ bathroom and replace the kitchen cabinets, countertop, sink, stove & fridge. No high end stuff. Just mid-range quality from Home Depot. I don’t think I spent more than $5K for everything. "
That’s about right… the bath in this remodel is also 5 1/2’ x 6’, and the kitchen is 10’ x 10 1/2’…
“I did the work myself and had some advice & help from friends. If I were rehabbing a rental, the rents and type of renter would dictate what I would want to spend. Good luck.”
Mainly, I am working on this with my son this summer… Whatever we don’t finish this summer, will be finished in the fall…
Thanks for the input… :beer