New Financial Route

Hello everyone, and sorry for the very long delay. I’ve meant to make this post earlier, but I became so busy with managing the renovations that I haven’t had time to update everyone. I will be posting on a regular basis from now on.

With that out of the way, I’m ready to give you all the moment you’ve been waiting for. Yes, today is the day when I’ll be giving you all the details on the triplex, with photos. Let’s dig into the details.

Purchase Details

Purchase Price: 124K

The original asking price from the wholesaler was 114.5k (technically 100k purchase price with 14.5k assignment fee). Due to the amount of offers on the property in just one day, I offered 126k. I was able to negotiate a $2000 closing credit because of potential issues with one of the tenants, but there actually weren’t any problems by the time we closed.

I purchased this property with “cash” using a hard-money loan. The lender required 23% down but would fund all rehab costs (more on that later). The interest rate is 11.75%. The idea is to use the rehab funds for repairs and improvements to the property and then refinance at a longer-term lower rate. The loan only consists of interest payments, and is for 12 months.

The Property

The building has three units in total: two units on the first floor, and one unit on the second and third floors. The ones on the first floor are both one bed/ one baths. The third unit has 4 bedrooms and two bathrooms. Two bedrooms and a bathroom are on the second floor along with a and third floors.

Each unit is going to require some work, but some more compared to others. Let’s go through each one-by-one.

Unit 1:

In terms of condition, this is the best unit in the apartment building. It’s one of the two one bedroom units on the first floor. In this apartment. one of the tenants did some updating. The floors are relatively new to my knowledge, as is the kitchen.

However, there is a lot of uneveness in the flooring, especially in the kitchen area. I don’t know if there is a way to fix this without completely replacing the flooring.

The bathroom is small, but the size should be okay for a rental. On the other hand, the bedroom is large. I’ve thought about taking some space from the bedroom, but I’m not sure the cost would justify the return on investment.

For this unit, the plan is to:

• Replace flooring
• Repaint entire unit
• install dishwasher
• Add washer/dryer hookup
• Add backsplash to kitchen
• replace electrical outlets
• replace heat registers on floor
• add sink to bathroom
• install bathroom door

Unit 2

This apartment was the one filled with cats, like I mentioned in one of my previous blog posts. It has an…interesting smell that greets you as soon as you walk inside. And from the smell alone, it became apparent to me that this unit was going to need more attention than the other one on the first floor.

First, all the carpet and padding has to go. I may need to replace the subfloor as well. This apartment also needs some plaster repair and a new coat of paint throughout. For now, I’ll see if I can get rid of the smell without gutting the place! That would save me some money.

Just like the first apartment, this one will need new floors. It already has connections for a washer and dryer and a dishwasher fortunately. I’ll need to at least replace the flooring in the bathroom. In terms of the kitchen, I could probably update it nicely with the current cabinets. I want to replace the dated appliances and lighting at least. If the budget allows, I will replace the countertops as well.

The game plan for this unit is:

• Remove old flooring, and possibly remove and replace sub flooring
• Get rid of cat urine smell
• Install new flooring
• Wall repair as needed
• New paint throughout unit.
• Replace all light fixtures
• Replace all outlets and light switches
• Replace bathroom flooring and vanity
• Update kitchen in some capacity

Unit 3

This is the 4 bed/2bath unit that occupies the second and third floor. I would say this one is in the worst condition. This unit also has the most leftover junk from the previous owners. First, I’ll have to remove all of the furniture and boxes. Paint and flooring are a given.

The kitchen in particular needs some attention. I’m not sure if you can tell from the photo, but the ceiling in here is a lot lower than it is in the other rooms. And given the condition of the ceiling, the best course of action would be to remove it to increase the height of the room. Demoing the plaster though is easier said than done…

Another issue is that there are no outlets near the countertops. I doubt that the kitchen had ever been wired to code, so this room will need to be completely rewired.

With that said, I love the old-school charm of the subway tile and the exposed brick. I’m hoping to keep the tile backsplash with the remodel!

The bathrooms will need some work for sure. At the very least, I’ll need to add GFCI outlets. I may also need some plumbing work done since the sinks don’t seem to work properly.

For this unit, the plan is to:

• Clean out apartment completely
• new flooring
• Wall repair as needed. I’m trying to avoid gutting every room as that will be a big mess and expensive.
• Rewire kitchen. Remove kitchen ceiling.
• Update bathrooms (the extent of this will depend on budget)
• Add washer/dryer hookups.

Basement

In the basement, there’s even more junk removal to do! I will have to focus on cleaning out the apartments first.

In terms of the mechanicals, the electrical panels and water heaters are newer and functional. However, the furnaces are very dated. I believe two of there three furnaces still work, but it’s better to replace them now rather than in the middle of the winter if or when one fails. Newer furnaces will also be more energy-efficient. I want to add air conditioning to all three units as well.

Exterior

Perhaps the most concerning issue with the exterior is the deck in the rear that acts as a fire escape for the second and third floor apartment. It is not in useable condition right now. Having it replaced would cost a fortune, and having it repaired would probably cost a fair amount of money as well (that is, if it can be repaired.) In any case, I won’t be able to even rent out the upstairs apartment with the deck in its current state. Repairing or replacing the deck will be my #1 priority in terms of the exterior.

Another priority here will be adding railing to the front and back porches. That shouldn’t be too complicated or expensive.

Budget permitting, I would also like to either re-paint the brick or sandblast the current code of paint to expose the natural brick. I would ideally sandblast the exterior (unpainted brick looks better and does not require as much maintenance as painted brick does.)

The roof appears to be in decent shape overall. It’s about 10 years old according to the previous owner. There are a couple missing shingles that I should be able to replace easily. My hope is that I can get another 5-10 years out of the current roof before I have to replace it.

The Journey Continues…

Thanks for your time and reading my post! I appreciate your support. Follow me through my journey as I revive this old triplex and continue on my new financial route. More to come soon!