Renovations - most bang for my buck -what projects?

Your quandry is a typical one, regardless of your experience. I would recommend you make your decisions based on the income level of the prospective tenants and what competing units typically offer in the way of modern interiors.

We have just remodeled a 1975 rental house after a 3-year tenant departed. Rather than fight the maintenance and cleaning of carpeting, we tiled all but the bedrooms using large ceramic tiles. We also renewed the kitchen by replacing the cabinets (they were getting marginal and looked sorry) and putting Corian countertops on, with a stainless steel sink.

Fortunately we have forced air, but for apartments with ugly baseboard heaters, we have scraped off the gum, crayons, and other marks and used an aerosol paint can - hi temp - to make them look new. Thermostats can be cleaned up if they operate properly, but if they don't work right they should be replaced. Same with smoke alarms.

I would doubt that the market would make it worthwhile getting stainless steel refrig or range, as they do cost a lot more. Same with furnishing washers and dryers, unless the competition makes it necessary. You could see if the units rent well without them, or you could furnish them if a good tenant-candidate requests them. Same with new interior doors. If the existing ones are abused, new ones probably will be, too, so plain standard doors serve the purpose and look fine.

New faucets would be good if the existing ones look (and operate) bad. Cleanser and a sponge will brighten up dingy ones if they just look a bit tired.

If ceramic tile isn't indicated for flooring, I would agree with your flooring guy that laminate is likely to get damaged. There are very attractive vinyls available that look just like laminate, and they make pretty sturdy material now. I'd go that route.

The numbered items not already mentioned pretty much depend on the condition of the existing items and the cost of replacing them. Would new ones be the same style, or modernized versions (like lever-type door fixtures vs knobs)? Would the class of tenant really pay more for modernized ones? Remember, if you have to hire someone to install the new items, the cost of installation may exceed the price of buying them. But if they are ugly, like older minimum-quality light fixtures, it may be a worthwhile upgrade. Attractive but reasonable-priced lights can be found if you shop carefully.

It sounds like your budget wouldn't allow all the stuff you mention, but by carefully choosing which to replace and which to clean up/fix up, you shouldn't be far off. It usually costs more than the estimates to rehab units. You can attract and keep good tenants by managing the units properly, treating them decently without being walked on, and keeping the units and grounds well-maintained. Good luck.

cactusbob

DO this. Just rehab one apartment at a time and rent out the rest right away even if it is at a discount to get the money rolling in. Then as people move out down the road rehab each unit as needed.

Carpet and Paint, brain surgery it ain't.

It shouldn't cost more than $4000 to completely rehab a 2 bedroom apartment. That is if everything needs done. I never do the work myself. I always hire out the rehab.

Hmm, we're looking at $5500 to replace the old shake roof (which is dirt cheap) and $7600 to replace the carpet and vinyl, including the stairs and upper landing (which again, is dirt cheap), and $4800 for the exterior paint, so that would be over and above the interior costs, and they are probably coming up similar to yours. It's costing us $3k for the drywaller to come in and fix all the drywall problems (there are many holes, and most of the corner tape has to be pulled out and redone), then he's going to put fresh texture on all the walls and do a knock-down. I can't see any way to get appliances under $4k (frig, stove, washer, dryer) even buying used. All the interior doors are ruined, as is all the interior trim - that is going to be spendy. I would love to replace all the interior doorknobs with the lever type for example, but since what's there works, I don't see it happening. All the entry doors and the 3 doors to the storage units are all completely broken - that is a big expense right there. We're figuing $2k for supplies and materials for interior paint, and that is with us doing the work (got to do a primer coat when you have new texture on the walls).

These apartments have been druggie dives for years and years now and are just abused and ripped up everywhere. I don't think there is a wall or a door without a hole in it, LOL.

We're trying to set ourselves apart from what little competition there is. There are a couple of other sets of 4-plex apartments, but they are much smaller and very dated as well. No w/d hookups there at all. There are some new duplexes that were built during the boom, and we figure those will be the main competition. They are new construction, very small, do have a small 1-car garage, finishes similar to what we are planning to put in, and offer a laundry "closet" in the kitchen, but do not provide washer/dryer. They are charging about $25 less than what we want to charge. Our apts are nearly 1000sf, and each has it's own laundry room and storage room. Our town is primarily a welfare town, with a huge druggie problem, so it's important to attract the best of the rental clientel in order to avoid problems. We had also planned to make even just a small grassy play-area for the kids (with a play structure) but even at a cost of $500, I don't know where we're coming up with the cash.

With the FHA rehab loan, we have to have everything done within 6 months, and we can easily have it done in half that time or less, and get things rented out, but it's not really feasible to just work on one apartment at a time. It would be a nightmare for the contractors, and they are cutting us some amazing deals as it is. With us being so far away, it will be really difficult for us to get any major parts of the work done ourselves in a timely fashion - we'd just have to be down there on weekends, and we will end up holding up the contractors for the other jobs. We are thinking of just doing the roof ourselves - it would be a big undertaking, and we'd probably have to borrow the equipment, but I guess it could be done. Just a HUGE hassle.

I had thought that we'd be able to find lots of materials on craigslist up here (near Portland, OR) and then get them cheap or free and take them down there, but hubby doesn't think it will go as smoothly as I'm expecting, nor save as much as I think (maybe save a few hundred dollars vs. the few thousand we need to shave off).

We're submitting an "estimated bid" to the appraiser today, with basically not-realistic numbers, just to get him out there to to the appraisal, and we'll keep trying to figure out how to cut the costs more. We have to have the appraisal come in at the purchase price plus $35k (the rehab loan amt) in order to move ahead with the closing and make it happen. So, it's hard to know what to cut from the list without risking a lower appraisal (which, btw, is costing $800 freaking dollars!!! And this, after a $1000 inspection!!!!)

This is a lot more stressful and frustrating than I had thought, LOL! When we redid our old farmhouse to sell it, it was SO much easier. Of course, hubby did all the work himself with his own crew (who all worked for pizza and sodas) and there was no appraiser or lender to answer to. I hope I get better at planning all this out, and estimating costs. After the new Good Faith Estimate, we've also bitten a couple of hundred per month out of our cash flow (monthly payment came up much higher than initially told/planned). Thankfully, there's still plenty left to make this a great deal, but it does put a damper on things.

I will be happy to see these done, and get on to the next, not so complicated deal!

Tracey R.

On our first real rehab. . .we made the common "newbie" mistakes according to our appraisers; we made about half the profit we anticipated, BUT we learned!And, at the time we weren't certain as to our exit plan; rental or sale..we were fishing.. we spent 13K on rehab the same catch items you mentioned. kitchens/bathrooms, but we paid attention to detail, new knobs, ceilingfans,switch plates that matched, and curb appeal. Short on confidence, long on zeal, we broke out in a cold sweat when we got the appraisal at 11K under what we'd figured. We knew we could rent that house 6x over, but we wanted/needed to prove to ourselves I think that we could be "doers" like Dean says.
We're not regretful; it became through some DG creativity, a splendidly beautiful, new first-home for a special family who heretofore had never lived in anything except broken-down house trailers, and who keep it immaculately clean and preserved. So there. . . .yes, we're in this to build wealth and I keenly share in your excitement and anticipation; it is a feeling like none other to be doing this investing and having success, as you will undoubtedly have.YOurs was an excellent question. kudos for asking others of us to give input!!

Don't put in a washer and dryer. Just the hookups. Washers and dryer get abused and overloaded and then you will be expected to fix them. Let the tenant bring in their own.

With the quality of items for your rehab would make them good for condo conversions. Is there a basement to put a coin operated washer and dryer for all the tenants to use?

Also, are you going to occupy oone of the units? If not, tell me how to get this FHA rehab loan. Is it available to investment single family or just multi family. Thanks