BRRRR on Bluffview
Buy, Rehab, Rent, Refinance, Repeat…this project embodied that very concept to the fullest!
If every RENO project could be like Bluffview, then building out a portfolio and crushing goals would be a piece of cake! We had a 6-week RENO goal with this project. It started with a smooth purchase of a tenant-occupied property and ended with a cozy and beautiful single family home in a great neighborhood!
Ending the Lease and Kick-Starting the Reno. The tenants communicated early they planned to move out shortly after closing. We felt this was perfect and it allowed us to do a renovation before the first 6 months of owning the property. The tenants turned over a house in desperate need of updates, new flooring, cabinets, appliances, and a fresh coat of paint….everywhere! After handing over a full security deposit to the tenant for the smooth move out, we kicked off the project with demolition.
The best part of this project was simply whitewashing the fireplace, new LVP, and applying a fresh coat of paint on all of the trim. Bluffview already had a solid canvas and just needed a little extra TLC. During the initial walk through it was hard to look past the 10-15 year old carpet, drab painting, and old light fixtures. Ultimately, with each update this house really came alive and turned into a fun and cozy single family home for anyone to enjoy.
We set a timeline of 6 weeks and fortunately had a military family waiting for completion to move right in. We felt the need to make sure everything was completed to the fullest, but always with the same high quality as any other project. Our perspective is to complete any RENO to the fullest so in a worst case scenario it is ready to be placed on the market and receive the highest and best offer possible. In a rental market near a large military base or in a bustling city this holds true as well. So before you think of short changing on quality, consider the pool of tenants you market towards, the amount of rent needed to cover your Debt-Service Coverage (DSC) ratio, and minimizing future maintenance.
Rental Market.
COVID taught us many things. Stable income for tenants is a must. Researching applications and references are just as important.
DSC Ratio.
For business entities (LLC), commercial lenders focus on DSC and Debt-to-Income Ratios. Aiming for 1.25 is important, meaning you will cash flow after paying your Payment, Taxes, insurance (PTI).
Maintenance Plan.
Enter any project by checking everything and make all improvements to last at least 10 years of routine use. Limit the number of future service calls by fixing everything during the renovation. Your tenants will likely take better care and management is simpler.
-Remove Appliances, Cabinets, Vanities, and an annoying ceiling fan in the kitchen
-Paint…everything, and whitewash the fireplace
-Granite Countertops, Custom Backsplash
-Fix the Deck!
-Brighten Up the House
-Old Ceiling Fans in Kitchens just don’t work!
-Recessed Lighting is easy, economic, and looks great
-Floor Prep is a must! Uneven floors will always create greater problems
-Electrical has to make sense, too many 3-ways/4-ways can be a nuisance
-Security Cameras/Systems provide so much comfort to both a tenant and landlord, don’t forget to add as a must!
-$500 – Demo Expenses
-$3400 – Exterior Paint
-$2000 – Lvl 0 Granite
-$2500 – Stainless Steel Appliances
-$500 – Interior Paint
-$2000 – Cabinets/Vanities
-$1700 – Update Plumbing/Fixtures
-$2200 – Flooring
-$750 – Security Systems/Cameras
-$750 – Lighting
-$1000 – Misc Repairs
Check Out the Before and Afters
Take a peek at this Reno Project!
