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Real Estate Rental Property SH #2 Update (September 21, 2014)

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My investment partners and I got the keys on Friday night and wasted little time in getting to work on Rental Property SH #2. Similar to our last side hustle, this Bay Area property was acquired essentially turnkey (rent-ready), and needed very minimal work put in. It’s also located in a fabulous neighborhood, and we are hoping the combination of the two (quality and location) will help us achieve some high rent. Fingers crossed!

This property is a 3/2 townhouse. Here are some pics I snapped up from earlier on Sunday morning.

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Love the high ceiling living room

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I’m not a handyman, but if 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 houses.

In particular:

  • Installed GFCI outlets in kitchen and bathrooms.
  • Installed new door knobs and locks.
  • Installed new door stoppers on each door.
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New GFCI

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New locks

And that’s pretty much all the work that was needed to be done! Hard to believe, right? My partners and I were pretty surprised ourselves, since we were anticipating needing to put in more: time, money, and elbow grease towards the rehab… I guess our recollection of the open house was not very good, since the place was acquired in much better condition than we had all remembered.

So, the next step is to aggressively start marketing this unit. The first mortgage payment isn’t due until November 01, but of course we would all LOVE to have a tenant moved in as soon as possible. Hopefully, before the first of October.

Speaking of which, we still haven’t secured a tenant for Side Hustle #1… SH #1 is undergoing rehab at the moment (new laminate floors, new paint, etc.), but we are running out of time before the first of next month…

I start a new job in another week, but these properties are sure keeping me busy!

Fight On!

{ 11 comments… add one }
  • Mr. FrugalwoodsNo Gravatar September 22, 2014, 3:34 am

    Looks nice!

    For SH #1, what do you think is behind the renting problems so far? Have you been turning away crappy tenants? Good traffic, but no bites? I always imagined bay area openings to be mobbed by a flock of wealthy potential renters. I imagine that’s highly location dependent?

    • FI FighterNo Gravatar September 22, 2014, 4:43 am

      Mr. Frugalwoods,

      Thanks! For SH #1, it has generated a lot of foot traffic and even a few applications… As expected, many qualified applicants, with salaries well north of $100k+.

      In terms of it not renting, I think it’s primarily do to the following reasons:

      1) Upstairs is not showing well. Primarily, the red and blue paint left behind from the original owners. Originally, we were planning on leaving it alone, but we now think it’s the primary reason why applicants aren’t committing themselves to the unit…

      2) We are pricing the unit at the high end of market rent. I’m guessing the applicants who are applying are also comparing with other units, and choosing to go with a cheaper alternative…

      I believe our unit can command higher rent, but ultimately, it’s the paint colors upstairs, along with some dirty carpet that is preventing us from sealing the deal… So, we finally decided to do something about it — we are painting all bedrooms neutral swiss coffee eggshell and re-doing all upstairs flooring, converting the dirty old carpet to laminate…

      I think carpet is preferable for a lot of families, especially with younger children, but we made the decision to go laminate since we think it shows a lot nicer in an open house setting…

      I am learning first hand the importance of aesthetics! No matter how wonderful your unit is… you have to hook the tenant by making the place pop… Otherwise, even if they apply, they’ll change their minds because in their minds, there is still something lacking…

      Live and learn!

      Cheers!

  • writing2realityNo Gravatar September 22, 2014, 4:34 am

    I too am curious as to the rental struggles as well given the extremely high demand in San Fran. Perhaps the rental market isn’t quite as high as expected?

    • FI FighterNo Gravatar September 22, 2014, 4:47 am

      writinig2reality,

      Demand is still strong, although it would have been stronger had we closed the deal prior to school re-starting… A lot of families are now situated with school under way.

      In regards to the unit having difficulty renting, I believe it’s because the upstairs rooms aren’t showing well. In particular, the colors are too extreme for most people’s taste, and the carpet is dirty…

      https://www.fifighter.com/finance/real-estate-updates/2014/09/real-estate-rental-property-sh-1-update-september-02-2014/

      I think we are fine downstairs, so will just need to concentrate on rehabbing upstairs.

      All the best!

  • Done by FortyNo Gravatar September 22, 2014, 11:34 am

    Looks very turnkey. Got to love that. Congrats on getting the keys and best of luck with the endeavor!

    • FI FighterNo Gravatar September 23, 2014, 8:12 am

      Done by Forty,

      Thanks! The place is definitely turnkey looking and ready to start collecting rent for us. 🙂

      Cheers!

  • Dave @ The New York BudgetNo Gravatar September 22, 2014, 2:13 pm

    Awesome – always nice when the work is minimal!

    That’s awesome that your first mortgage payment isn’t due until Nov 1. How’d that work out?

    Best of luck with SH #1 – I’m sure you will get that rented out soon!

    • FI FighterNo Gravatar September 23, 2014, 8:12 am

      Dave,

      We closed escrow in mid September, so they gave us until November for our first payment.

      Thanks! We are updating SH #1 a bit, so hope that helps us seal and deal and finally land a quality renter.

      Take care!

  • No Nonsense LandlordNo Gravatar September 23, 2014, 4:40 am

    Get rid of the handset lock. Only use a dead bolt, that takes a key to lock it as you go out. You will reduce tenant lock outs. No one uses both locks after a while anyway, they just close the door.

    • FI FighterNo Gravatar September 23, 2014, 8:17 am

      Eric,

      Having both seems pretty common in all houses around here… If the tenant complains, we’ll address the issue then.

      Good point though… That’s something worth thinking about.

      Cheers!

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