The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Wednesday, August 24, 2005

To work or not to work, that is the question..

Turns out that I'm quite the handy man, I have done full rehabs so I know I can do all of the work necessary. Not just floors and paint, but dry wall, texturing, plumbing, and whatever needs to be fixed. However, I need to assess how much work I want to do with this project. This is a weakness, because I know I can save tons of money doing it myself. And the work will be good. I don't have to worry about contractors not showing up or messing up the project. However, sweat equity is VERY time consuming or relatively slow. I already know that I cannot do everything.

For painting, I think its a no brainer to hire someone to come in and spray (Not brush) both units. They can do this in a matter of hours. However, should I hire them to mask off everything, or should I spend my time to do it and lower my costs? It will depend on schedule and budget! I think I can get a good deal with a guy I hired last year.

The units are dirty, so I will be hiring out help to clean them up. I have some good contacts with very good rates.

The floors are going to be a tough call. Do I do them myself or hire?? I just got done completing saltillo tiles in my bathrooms. It was the first time doing it, I and did everything myself. My wife thought they came out fabulous! These tiles are very time consuming because there's many extra steps from ceramic.

These units are going to be a long, long term investment, do you think I should tile every room or everything except the bedrooms?? I have to decide if I want to do this myself. This will take some time because I'll have to tile about 2000 sqft. Holy cow!

I plan on writing out my plan in detail in hopes of more experienced investors that do rehabs like Trisha or whoever can make suggestions. After my inspections this week, I'll know where I'm at.

Holding costs are steep on this one, so I need to work fast. Although, if I have a solid plan going forward, I can get these units up and running and get this non-performing asset performing.

Good investing!
|| Bginvestor, 12:41 PM

5 Comments:

Personally, I would tile only the kitchens and bathrooms. Look at it from a tenant's view - Would you want to live in a place that was almost exclusively tiled? Replacing carpet is quick and relatively cheap. Just include the cost of replacing the carpet every 2 or 3 years in your budget and you'll be ok.

You said it yourself - holding costs are steep. So figure out, realistically and allowing for the inevitable interruptions, how long it would take you to do all the work yourself. Figure holding costs for that time. Now do the same thing with contractors doing the work. Realize they will be able to work full days on the project, not just weekends and evenings, thus shortening the time to complete the work. Also keep in mind you may be able to have multiple contractors working at the same time.
Blogger Shaun, at 1:51 PM  
I agree with Shaun. I would only tile the kitchen and bath. Well, realistically, we'd probably use VINYL tiles. But, the property you're talking about might be too nice for that. The good thing about vinyl tiles, though, is that they're easily replaceable after damage (oh, yeah, and they're CHEAP). Ceramic tile, as you know, needs a perfectly level floor beneath--it can be done, though. You also want to watch the amount you spend on carpet. Tenants won't care about the quality of the carpet--they just like the "new" factor.

My suggestion regarding the holding costs is to complete construction on one of the units ASAP and get a tenant in it while you work on the others. You'll make a dent in that mortgage payment, at least.

I can't be absolutely certain about those cabinets without seeing them in person. But, if they look like they haven't been freshly stained in a while, you can sand them lightly, spray on Kilz, then spray them white with enamel or epoxy paint (wear a mask). It's a lot of work, but it'll help those cabinets. But, wait, are you going to be holding this one as a rental? You may be doing overkill worrying about the cabinets.
Blogger Trisha#1, at 2:26 PM  
I had the same thought about getting one unit done first and rented and then working on the others, but I wasn't sure about it. You could probably get a discount from contractors doing all three at once. I don't know.. Maybe do 1, then 2 at once. Let the contractor know you'll be doing the other two and have him treat the first one like a test. If he does a good job at a good price, he gets awarded the work for the next two.

And yes, cheap carpet is the way to go for rentals. Cheap pad too.
Blogger Shaun, at 2:46 PM  
Thanks for the inputs! Yes, getting the first unit up and running is priority ONE. My first mortgage payment is not til Nov 1st so I have a little time to get the tenants in and have them make the payment.

I'm surprised that you guys think carpet is the best for most of the rooms. I was under the impression that the more tile , the nicer the place was. I'll consider your thoughts carefully.

Thanks
Blogger Bginvestor, at 8:35 AM  
Some things to consider with the tile vs. carpet debate ....

1. If you plan to replace carpet every few years, it may be more cost-effective in the long run to go with tile.

2. People with small children and the elderly may prefer carpet over tile.

3. Tile is lower maintenance.

4. Tile is better for people with allergies.
Blogger Steve, at 11:01 AM  

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