Real Estate Rental Property SH #1 Update (September 02, 2014)

IMG_0031

Time flies when you’re out having fun! Well, that and when you have ambitious partners who will work aggressively trying to close a property while you’re out of town (thanks so much team!). 😉

The dust has settled (rather quickly), and Rental Property Side Hustle #1 has been fully funded! The team and I received the keys last Thursday night, and we’ve been working expeditiously trying to get the property up to stuff in as short a timeframe as possible.

For the most part, this unit was acquired fully turnkey (rent ready), and only a very minimal amount of elbow grease needed to be put in. Quite simply, all we had to do was change out a few things: all the doorknobs, electrical outlets (install GFCI plugs in the kitchen and bathrooms), some doorstoppers, blinds, smoke detectors, carpet cleaning, mailbox, etc.

The place is just about rent-ready now (after only three days of work)! Ideally, we will have a tenant in place sometime this month and be able to collect a pro-rated portion. My partners and I now need to actively market this unit. Optimistically speaking, we are hoping for $3,000/month in rent. The unit is 3 bedrooms and 1.5 bathrooms, situated in a prime location in the South Bay Area.

$3,000/month in rent might be a stretch, but the unit is in top-notch condition. New construction apartments are easily renting for over $3,800/month… If we can somehow get $3,000/month in rent, this unit will cash flow from Day 1 (without factoring in any funds for PM, maintenance, or vacancy)!

Not too bad when you consider the fact that we only put down 20% and are purchasing in the super EXPENSIVE Bay Area, right? Let’s hope for the best!

Here are the pictures!

IMG_0003
Those black vents have got to go…
IMG_0004
Awesome kitchen!
IMG_0005
Glass hazard… has got to go!
IMG_0008
More black vents…

IMG_0010

IMG_0011

IMG_0016

IMG_0019

IMG_00233

IMG_0022

IMG_0025

IMG_0033
Spectacular view of Levi’s Stadium!

Rehab Pictures

When it comes to rehab, I love getting a lot of bang for my buck. This unit was acquired in fantastic condition. It already featured: new countertops, stainless steel appliances, copper piping, etc.

So, basically all the expensive items arrived in great shape. HOA also covers the fence, landscaping, and roof, so no worries there. From an upgrade point-of-view, only a few minor cosmetic items needed to be addressed.

The team and I maximized our dollars by performing cheap (but important and noticeable) upgrades. Daily use items were swapped out: electrical outlets, doorknobs, mailbox, carpet (cleaning), blinds, etc.

Some of these $10 upgrades really go a long ways towards helping us create a more favorable impression. We are hoping that these subtle upgrades will be sufficient to help justify the higher rent. 🙂

Here are pictures after three days of rehab!

IMG_0002
Before
IMG_0039
After
IMG_0042
Before
IMG_0044
After
IMG_0043
Before
IMG_0045
After

Print Friendly, PDF & Email
Sharing is Caring:

21
Leave a Reply

avatar
9 Comment authors
Real Estate Rental Property SH #1 Update (September 22, 2016)Don’t Lose PerspectiveReal Estate Rental Property SH #2 Update (September 21, 2014)A Frugal Family's JourneyJason Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
billy.z
Guest
billy.z

Hi, I enjoyed reading your blog, thank! I have a couple of questions for your thought process: 1- it seems that you are real estate heavy in terms of your total investment strategy and very little on the stock front (401k+IRA probably occupies less than 10% of your total portfolio). Historically the ROI of real estate performs lower than that of stock market, and also, it’s less liquid. I understand you want to generate some passive income but that also affect your income tax. So I am not quite sure how to understand your overall strategy unless you just like to be a landlord. 2- So several of these rental properties are co-owned between you and your business associates. I assume you set up an LLC to divide the shares. How do you calculate the asset value between you and your friends? For example, a house worth $400k on zillow, and you have 50% share of the LLC, you claim your asset to be $200k?

Thanks!

Financial Samurai
Guest

Very cool pic of the stadium right in the background! It really is right there. One would think that it should have some very good upside potential, especially after the rehab.

My only worry though is congestion. I just spent 35 minutes driving into downtown due to all the road work, and trucks double parking on major arteries. So maddening!

Dave @ The New York Budget
Guest

Nicely done! This place is looking great. In NYC (at least in Manhattan and parts of Brooklyn) this place would rent for WELL over $3,000.

Heck, it might even rent for over $3,000 in any borough! I’ve heard that the Bay area is getting worse (or in your case, better) in terms of cost of rent than Manhattan. If that trend continues, it shouldn’t be long before you are cash flowing quite a bit! Of course, this is Santa Clara and not San Fran proper, I realize, but still.

Just eyeballing the pictures here, I would say this could go for as much as $4,500/month in midtown Manhattan. It would go for much more than that if the 2nd bathroom was a full bathroom. Have you done any research on the ROI of converting that to a full bathroom?

Martin
Guest

I love those pictures of your properties. I wish I could rent that space.

So, before you said this unit will not be cash flow positive but a flip, right? Or am I mistaken?
With the 3k rent is that the game changer?

writing2reality
Guest

It is amazing that a little bit of sweat equity, and some $10 parts, can drastically improve and modernize a space. The every day things are a good rule of thumb, and can really make a difference when “updating” a place on the cheap.

Keep up the good work!

Mr. Frugalwoods
Guest

Can’t wait to here how the rental process goes. Looks like you hit the major bang for your buck reno tweaks. One tip: They make stainless switch and outlet plates that look great in already stainless heavy kitchens. A couple bucks more than plastic… but they look nicer and they are more durable.

Jason
Guest
Jason

Looks good, FIF!

Reminds me of the good old days I had reno’ing. And, yes, it’s amazing what inexpensive changes can do to an old place. It’s a shame that we don’t live in a place where someone can make a decent living just futzing with carpet, tile, and paint. That’s what I’d like to do for a year or two, for sure – move into a fixer-upper, put some time and money into it, then sell it and move to the next one.

Maybe after I retire…

A Frugal Family's Journey
Guest

Looks like another great property you picked up. Not bad for your first side hustle, especially if you can get $3,000 and have it cash flow from day 1!

Wishing you the best of luck getting the rent you desire. AFFJ

trackback

[…] I can do my part in helping get the place as rent-ready as possible, I’m more than willing. Just like with the last property, I swapped in a few CHEAP items, which will help the place stage better during open […]

trackback

[…] a part of our discussions, not surprisingly, the subject of Rental Property SH #1 and Rental Property SH #2 entered into the conversation and we started to reminisce about the […]

trackback

[…] Real Estate Rental Property SH #1 Update (September 02, 2014) […]

Close Menu