Big Rehab....Architect Or Not?
Hey all,
I just put a big rehab deal under contract and it is in a hot area of the city where appreciation rates are easily double digits. The property is already gutted and the brick is exposed. My ideas are to alter the floor plan to include spiral staircase, hardwood laminate flooring and other contemp designs. I plan to update this to a luxury property where rents easily fetch over 1200/mo. Does anyone know if I should use an architect to put my ideas on paper or not? I am open to all ideas and haven't dealt on this level before since all other rehabs were very basic. This property can easily make me a bundle of money and I want to make sure I do it right. I talked with a few gc's and they told me that they could probably accomodate my ideas.....What do you guys think? Thanks in advance!
A few thoughts...
1. If I can rent a luxury property for 1200/mo in a hot area I'd be all over it!!
2. Probably the biggest lesson I learned when rehabbing is not to purchase unique properties. They are more subjective in value and don't fit the majority of buyer's needs. The run of the mill ranch or two story home (in my area) is what sells the easiest.
3. I don't think you need an architect unless you are going to seriously alter the floor plan. I'm guessing you aren't going to be that drastic.
4. Spiral staircases look cool but they are a bitch to carpet in terms of cost. It takes a LOT of time and you have a LOT of wasted carpet.
You should have some sort of design / plans to go by........weather you need an architecht or just a designer will depend upon your local building department etc.
By having a plan (a hard copy contract if you will) then there is the less liklihood of having any misunderstandings with your subcontractors.
Most problems with subs come with lack of clarity and communication......this often is related to a poor set of plans if you will.
I would advice you to find someone, be it contractor or architect etc., that can advise you on building codes that would effect your job.
I have installed spiral staircases before, this is not a task for an amature. You also need to be aware of egress codes when using spiral stair cases.
Spirals come in typically about 3 diameter sizes (although they can be custom made)......you need to know which one applies to you for egress if that is an issue.
I have a spiral in my personal home......I installed it ontop of hardwood......I am not a pick carpet fan.
If you are trying to obtain top dollar then you need to do it right.....
gl
NC_Yank
[ Edited by NC_Yank on Date 03/23/2004 ]
Thanks guys....I have the visions in my head, but it's hard to put them on to paper without the proper background. I may talk to a few arch's just to get an idea on how they would run things. But I do agree with you all........it needs to be done right. Any other opinions? Thanks.
Why don't you post the size, fair market value after repairs (what could you sell it for), number of bedrooms and baths, what you paid for it, how much you plan on spending on repairs, what is your monthly PITI.
If the rents are only $1200 then you might be way over improving by getting an architect. 99% of most rehabbers do not create a masterpeice - that is called over improving. We buy, fix it cheap, sell or hold then sell.
I bought a house that had the most horrid bathroom. I was going to leave the worn carpet, old appliances, and smuges on the wall, but the bathroom needed to be redone. The former owner was an "artist" and had hand painted butterflys on the wall in peach and teal. Really nasty. I had just bought the paint when the first people who walked in the door fell in love with the bathroom and signed a lease.
Sorry guys....here are the details. ARV comps out at 130-160k. Purchase price 57k with estimated rehab at 25k. I plan to complete rehab and refi at 80% LTV giving me a 104k loan amount on a worst case appraisal of 130k. This will give me a PITI payment of 826.00/mo based on a term of 30yrs at 7%. As you can see this deal can be quite profitable when rents are currently at 1200-1400/mo and rising. If I would bring an architect on board, their fee would be somewhere between 7-15% of construction/rehab costs increasing my rehab costs to roughly 29k.....still a profitable deal. But do I need to go that route?null
Gino - are you drinking to much IC light out there? You consider $1200 a month rent a luxury apartment?
You meant to write $12,000 a month didn't you?
I'm positive that any GC you talk to can accomodate your ideas, they can generally accomodate any idea you want as long as your checks keep clearing.
If this is a $1200 a month apartment forget the architect. If this is a $12,000 a month apartment, start inteviewing.
If you are having trouble getting your ideas out of your head, start going to the comp properties in this neighborhood that are forsale or for rent in your price range and bring a camera and piece of paper, within an afternoon you will have a game plan of what to do and what not to do.
Is it just a wide open space, or is there a current floor plan? If so, how many bedroom and bath.
If you absolutely had to do the house as cheaply as possible, what $$ would you have to spend and on what? Give a list of repairs and their costs.
If you got your architect and did your vision, what would be the repairs and their costs? How much more could you raise the rents?
I am guessing that your major rehab costs will not pay for itself with a significant increase in rents.
Brenda
Again rents are currently 1200-1500/mo and quickly rising with new retail/office/entertainment development taking place 2 blocks away. I guess I won't need an architect but here are the estimated rehab costs....
Bathroom-1,300
Kitchen-2,700
Flooring/Carpet-2,800
Electrical-1,300
Plumbing-1,500
Heating-1,400
Roof-1,200 (gutter/downspout repair)
Trash removal-500
Painting-1,200
Miscellaneous-2,000
Windows-1,200
TOTALS-17,100
Again I always estimated a bit high at 20-25 k rehab costs.
sorry.....forget to mention that floorplan is LR, DR, bath and kitchen first floor. Second and third floor include three bedrooms. I was planning to open up the first floor a bit and keep the brick exposed, keep in mind the property is already gutted down to the joists and studs. This is how I bought it (didn't close just yet.) The first floor stairs separate the LR and DR and was planning to open this up by going sprial stair case or simply just moving them. Any thought? I hope I supplied you with enough info....
1) How many square feet?
2) So it is a 3 bedroom one bath?
3) With the current floor plan, how much could you get in rent
4) With the new floor plan (moving stairs, etc) how much could you get in rent?
5) How much more would any major change to the current floor plan cost?
If you were selling, I would maybe consider updating. But on a rental, major updates do not usually pay for themselves.
Brenda
great questions....your help is greatly appreciated. here are the answers to your questions........
1)950 sq feet
2)3 bdr one bath row/town home
3) current floor plan - $.95 -$1sq foot - approx 950.00/mo
4) new floor plan (moving stairs etc) - $1.20 sq ft - 1140/mo rent
5)change to the current floor plan would likely cost $2,500....which would give me nice cash on cash return..
This would also allow me to offer single family three bedroom housing for 1.20 sq ft versus loft housing which can be found around the corner at 1.50 sq ft for a one bedroom/one bath loft apartment.
i also plan to take a nice appreciation over the next 3-5 years and unload. What do you suggest?
Gino, YOu need to find a contractor that does design/build. He will have the recources to do the design and run it through permitting. If you are changing the stairs that will have to be inspected by the building code inspector. If as you say the thing is stripped to the brick you will also have to have the electric inspected. I think you will find that when you go for the building permit they will explain exactly what they will require for occupancy approval after you are complete. :-D I have 34 years in the construction business to rely on and have done a few rehab's myself. You need to be very careful regarding over-improving as I have made that mistake once. Will never do it again. It slowed down my money making real estate career.[ Edited by snoonan on Date 03/23/2004 ]