Investment Property Research and Analysis

Researching a potential investment property can be a time consuming activity. Of course you do as much research online as possible, but eventually you will need to drive out to the property to perform as much of a visual inspection as possible. 

Research

I am new to the property rehabbing profession, so I can't even begin to imagine how much more complicated research was before the extensive availability of information on the Internet. Even though there is a lot more information available online, it is always important to remember that you can't believe everything that you read... 

Property History

Before I determine whether or not I am going to take the time to drive out to a property, I like to gather at least some basic information on a property. Like; photos (if any), home size, lot size, bedrooms, bathrooms, sales history, rough estimate of comps in the area, taxes, and any other little tidbits that I can gather up. A good resource for a quick search is a real estate website such as www.zillow.com. If I like what I see, then I will print a copy of the property listing found on Zillow to take with me on the road.

Another great resource is Google Maps. Sometimes there is a street view of the property that you're interested in checking out. However, be cautious that the photos my be dated. Additionally, if the house is in a rural area or a neighborhood, there is a possibility that there is not a street view option for the property.

Navigation

This simple tip saves a tremendous amount of time, not only in planning your prospecting route, but also in the amount of miles and drive time. I use a website called SpeedyRoute.com to put together the most efficient route to drive-by the houses that I deemed worthy to visit based on my research. The website appears to have a subscription based option, but I have so far been able to utilize the service for free and without signing up. Trust me, this is a huge time saver!

Prospecting

You've spent time researching the property and driving to it, so do some due diligence and spend a little time adding to the information that you have already gathered. Take some photos, take note of the neighborhood (is the property next to a crack house, industrial park, highway, railroad tracks, etc...). Verify that the information that you found online matches up with what you're seeing as you inspect the property. 

I cannot stress the importance of driving out to a property to validate what you're seeing online. Do not make the mistake of blindly purchasing a property sight unseen. A great example of this is a foreclosed home that was listed on Auction.com that we checked into. 

From the listing and the photos, everything looked great! This looked like a slam dunk deal. The house looked to be in great shape from the photos in the listing and even a look at Google Maps showed that house had some excellent curb appeal. 

Even simply driving by the house, it would appear that everything checked out. A quick walk around the property revealed that things were not as they appeared to be. An investor that works based on online research alone would be duped into purchasing this disaster. Don't get duped.

This house actually sits on top of steel beams about 35+ feet in the air! I'm 6'2" and as you can see from the photo, that house is a looooong way up! From the road, everything looked like a dream come true. Once you got around back, it was an investor's worst nightmare. Needless to say, this is a deal that we ran from and never looked back. 

Next Steps

Once you return from your road trip checking out potential deals. Review the photos and notes that you gathered. Determine which properties warrant moving forward and which ones are better suited for the trashcan. 

Title Search and Comps

Now that the list of prospective deals has been narrowed down, it's time to call in the help of additional resources to dig even deeper. A title search will identify all of the liens that exist against a given property. Obtaining the comparable sales (comps) from a realtor will provide you with an idea about what the property may sell for in good condition. 

Analyze the Deal

Now that you have completed all of the research and obtained the necessary information on a property, it's time to crunch the numbers. Using the information that was gathered during the drive-by, estimate what the property may need to make it marketable and sellable at the comp price provided by your realtor. Determine the remediation strategy of the liens on the property and how much it will cost you, all in, to purchase the property as is. Here is a quick and dirty calculation to determine whether or not a deal is right for you.

Total Purchase Price + Holding Costs + Repairs + Fees + Your Profit = After Repair Value

Keep in mind that once you begin rehabbing a property, there could be additional overages that were not taken into account. Make sure that you leave room in your profit margin to make sure that you always end up on top. If the After Repair Value of the property is less than the sum of the costs, then the deal will not work. Again, this is a very simplified way of quickly analyzing a deal. We will go into more specific details of what each each of these costs entail and how they can be calculated with seasonable accuracy.

Close

Now that you've done all of the leg work and analysis, it is time to close on the deal. It could be that you are buying the property at auction (so you know your maximum bid), you're putting in a traditional offer through a realtor, or you're purchasing the property from a wholesaler. Regardless of how you're obtaining the deal, you're now confident and ready!

A Facelift and Looking 100 Years Younger

The Old Is Looking Good Again!

I am going to forgo posting any photos of the finishing details of the house until it is complete (I don't want to spoil any of the surprises). The whole package is going to be worth the wait, and I assure you that you will be amazed! I can say that the work that is being done is absolutely transformational.

A brand new, and improved, roof has been installed and the siding installation is just about complete. The house is once again a uniform color and it looks spectacular! An updated front porch and new trim around the doors and windows is simply going to make this house pop! The local community is buzzing about the house, and curiosity and excitement are on the rise, as 335 Front Street becomes one of the nicest houses in the neighborhood.

Roof replacement

We are so excited to showoff the final product, but you will have to hang tight for a few more weeks until the project is complete. In the meantime, here are a few updates on the progress that is being made on the inside.

Kitchen

The installation of the kitchen sink is complete! 

Just kidding. The white utility sink was cleverly hooked up by the contractor so that they can have access to water for some of the construction activities. However, the water isn't turned on yet to the house.

The old flooring has been removed from all of the rooms. We will be restoring the original 1920's hardwood throughout the house. It'll look great in the final photos once the remodeling is complete (better yet, come see it in person when we hold the open house).

The electric has been roughed in throughout the house and any shoddy wiring has been corrected. The service had already been upgraded to 200 Amps, so we lucked out on not having to do any upgrades to the electrical panel. 

Rest of the House

To prevent giving away all of the details of the final design, I am going to just provide a general update on the rest of the house. The talented drywall contractor is working his magic and making the walls straight and smooth. I couldn't believe the difference it makes to have straight seams and smooth uniform walls. This is truly going to be a new old house! Everything feels brand new with new fixtures and appliances throughout, updated electric, new bathrooms, new roof, new siding, finished floors... I think that you get the point. 

Patchwork in progress bedroom #1

Patchwork in progress bedroom #2

More to Come

The progress continues to be on track and we can't wait to show you the finished home. Thank you for following the progress at 335 Front Street. Let us know if you have any questions or comments. We'd love to hear from you. We'd also love to see you at the open house! We will provide the dates once we get to the home stretch.

335 Front Street Demo Begins

Out With The Old...

Demo is officially underway at 335 Front Street. Although demo is technically destruction, it feels good to see the old materials removed in preparation for the brand new. Now that the slate is coming clean, it becomes easier to envision how great this house is going to look once the improvements are started. Below is a list of the high level demo activities captured in the photos:

• Removal of siding. Replacement of the siding on the house is long over due and beyond salvaging. At some point, someone began painting the house and then stopped halfway through leaving the house 3 different colors. 

• Kitchen demo. The team removed the stove, sink, 8 feet of cabinets (upper and lower), and a drop ceiling. Yes, there was a drop ceiling in the kitchen. This is going to be a great improvement drywalling the ceiling and cleaning up the electrical mess that was left behind. The new kitchen will include a dishwasher and some additional counter space. The plan is to close up the window to the far right to make more room for cabinets and countertop space. We had discussed adding an island for additional storage, but due to the placement of the doors, it would impede the flow of the room.

• New half bath and laundry room. The photo below is a room on the opposite side of the kitchen that will be converted into a half bath and laundry room. Previously the laundry was located on the second floor within a half bath. That space on the second floor will be converted into a full bath giving the house an additional full bath.

• There are two additional rooms on the first floor that needed some minor demo. The hardwood floors are going to be refinished where possible. Upon demo, it was discovered that laminate flooring was glued to the hardwood in one of the rooms. Depending on how removal goes, this room may end up having to be carpeted. Fortunately, the room with the bump out on the first floor has wood flooring that is in pretty good shape and they will refinish nicely. This room would make a perfect office! The radiators, that were previously in each room throughout the house, have all been removed.

• There hasn't been any demo to the staircase. I just wanted to show a photo of how beautiful this staircase is. It is going to look absolutely amazing once it is refinished.

• There are three large bedrooms on the 2nd floor of the house. The carpet is being removed and the walls and floors will be refinished. 

• The master bedroom. This large bedroom has the window bump out like the front room on the first floor. The demo for the master is not yet complete in these photos. The closet is being enlarged to be a walk-in and a door to the bathroom is being added to create an ensuite. 

• The 3rd floor bonus. There is an awesome and very spacious 3rd floor. We do not have plans to finish this area since the home will already have 3 bedrooms and 2 1/2 baths, but this could be a great opportunity for the new homeowner if there is a desire to finish the area or simply used for storage. Access to the 3rd floor is a walk up staircase for easy accessibility. 

Demo is well underway! The new siding will start going up within the next week or so which will be a major transformation for the exterior. There is still demo, electrical, and HVAC work to be completed on the inside before building out, but things will quickly progress. Keep checking back to see the rehab progress at 335 Front Street. Ready to buy or sell a home? Great! Contact us at info@iHeartRehabbing.com

335 Front Street Property

335 Front Street Property Redevelopment Plan

Summary

This property was acquired in May of 2016. This was an exciting purchase for us for a number of reasons. First of all, it is our first redevelopment project. Secondly, this property is full of charm and so much potential. The terms of the acquisition did not allow us to view the inside of the property until we closed on the property.

Property Details

The house is zoned residential in a quite residential neighborhood. The 1920 victorian style home has a beautiful front porch, a double lot, and a breathtaking view of the Susquehanna river from the back patio and the master bedroom. 

Property Features:

• Bedrooms: 3
• Bathrooms: 1.5
• Number of stories: 3
• Lot size: 8,712 sqft
• Zoning: Residential

Construction Details:

• Parking: 1 car garage and additional off street parking in rear 
• Public utilities: Water / Sewer 
• Roof: Shingled 
• HVAC: Oil (radiated) / No air-conditioning

Planned Improvements:

• New HVAC system with propane heat and central air-conditioning. Requires running ductwork throughout and removing the existing heating system. 
• Repair and install new shingles on the roof 
• Remove old siding and install new siding 
• Re-finish the hardwood floors and install tile flooring in kitchen and bathrooms 
• Completely demo existing kitchen and install redesigned kitchen including new appliances 
• Relocate laundry to first floor off of kitchen 
• Create a new half bath on first floor off of kitchen 
• Turn existing half bath on the second floor into a full bath 
• Modify existing full bath to become an ensuite to the master bedroom 
• Create a walk-in closet for the master bedroom 
• Make landscaping improvements 
• Repair and update front porch

The most unanticipated expense for this project is the installation of the new HVAC system. Upon gaining entry into the house, we found that the radiators of the hot water system were cracked due to the water in the system freezing over the winter while the house was vacant. This meant that all of the radiators would need to be replaced or install a new system. The decision was made to install a new HVAC system, which requires running new ductwork throughout the house. This will give the house the benefit of central air conditioning and a propane heating system. There are plans to install natural gas lines throughout the town in the near future and the propane system could be easily switched over to tap into the natural gas line once it is available.

Summary

Overall, after inspecting the home and developing the improvement plan, we are confident that the transformation of this home is going to be nothing short of amazing. Once the redevelopment is complete, the family that purchases this home will own a house that neighbors will be envious of. Our mission is to ensure quality craftsmanship and attention to details on all of our redevelopment endeavors. Learn more about us by visiting www.iHeartRehabbing.com 

Are you ready to buy or sell a home? Do you have questions about residential redevelopment? That's great! We would love you hear from you.

iHeartRehabbing - Introduction

iHeartRehabbing Introduction

Residential redevelopment excites us in so many ways. We love what we do! There is nothing more exciting than finishing a property and seeing a family move in to cherish it for years to come. It feels good to make such a positive impact to local families, neighborhoods, and communities in which we live and work. This blog was started to share our journey through some of our redevelopment projects to inform and educate others on what we do. Follow us on this blog and at www.iHeartRehabbing.com for regular updates on our current projects and an inside look at the progress.