Hello to the forum members, here is a duplex project that was renovated for rent, which we finished a few years ago…
Hello forum members ????
I am uploading here a project of a duplex renovated for rent, which we finished a few months ago for a group of investors. –
Numbers appear at the bottom of the post, there are also pictures of before if go through them all.
The project was purchased as part of a tender, so we had a limited time of one hour to see the property before purchasing.
At the beginning we thought the project would take 3-4 months… Oh how naive we were.
In the end it took more than a year… and the budget increased by $ 20,000, more than 10% of the original plan.
Here are the problems:
1) Electricity - we could not take over the electricity bill to start working, for two months we tried to open an electricity bill and we could not, another person was registered on the bill, and no matter what we tried to do we could not transfer the name. Eventually we brought a generator, in retrospect we had to do it earlier.
2) Bees- Yes yes, bees. It turns out that inside the walls of the house, because it had been empty for so many years, bee nests grew unhindered, thousands of bees started coming out of the walls as soon as my girlfriend started working, hallucination, but it turns out that there are such cases as well.
3) Inspectors who just did not let us move forward - not something new. Inspectors This is Asal Day Basel Day, and here we had and one Basel.
4) Air Conditioners - We had a great team of workers, both permanent employees and subs, but somehow if there is one area we have always fallen into it is air conditioners. What is the problem? Who install an air conditioner, most of the money paid for the subwoofer goes for the purchase of the materials, only the licensee is allowed to buy the equipment for the air conditioner, so they are usually not ready to start working until a large part of the down payment is transferred to them. So here too we fell, on an air conditioner man who disappeared with our money, and we did not save for a long time to locate him, it also cost full time, and also that in the end, with the help of our investors, we managed to locate him and finish, the work he did needed repairs Then. Shortened one large salad.
5) Corona, price increases, postponement of delivery times, etc. - the same problems we all had in the last year ????
In the end, we were able to get the property to the condition we wanted. And also to reach the original return which we aspired to.
Many thanks to the investors, who were understanding and professional all the way. It is so important for us as entrepreneurs to know that there are people who believe in us, and do not doubt us, even though nothing works properly.
Real estate is a complex world, and there are so many changing factors that it is very difficult to predict along the way. To succeed in this world, one must know how to take bad news as a challenge, understand that failures are part of the game, and always try to look ahead ????
I would love to hear what you think of the project.
Wishing us all days of quiet ????
The numbers:
Purchase Price: $ 72,760
Renovation price: $ 126,466
Total investment: $199,226
Rental income: $ 2,650
After all spending is left with about $ 1,850
That is more than 11% return.
Estimated value for sale: $ 250,000
Investors are new entrepreneurs in the United States, not citizens. Therefore, at the end of the period, they received a loan of 50% of the money they put into the transaction, against the property at an interest rate of 3.2%.
So in the end they have about $ 100,000 left in the deal. The monthly mortgage costs are in the $ 400 range, so their monthly profit after all expenses is $ 1,350.
The yield of cash on cash in a transaction reaches 16% per annum.
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