“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined.” - Andrew Carnegie.
With 8 of the 10 units in the commercial property renovated and rented at market rates, we were ready to tackle the 2 gut job renovations. We hired the contractor team the city of Wilkes-Barre uses and the units were ripped apart and rebuilt from the ground up. New plumbing, electric, floorboards and floors, walls, ceilings and everything in between. At the end we were left with two brand new apartments and a 10-unit building with 3x the NOI and 2.5x the gross income from the purchase! See some below BEFORE & AFTER pics of the last 2 units.
“Some people look for a beautiful place. Others make a place beautiful.” - Hazrat Inayat
Literally just this morning prior to writing this post we met with our bank and to our pleasant surprise realized instead of refinancing the whole building, we will take out a second mortgage on our forced appreciation equity and will pull out UP TO $465,000 TAX FREE CASH. All while keeping the primary mortgage we have locked in at a low interest rate on the pre-renovated building value and still having plenty of money coming in paying the expenses and both mortgages.
I. LOVE. REAL ESTATE INVESTING. When done RIGHT, using the proper numbers, teams, systems and knowledge you WILL grow your money instead of it depreciating in a bank. If you've read posts #1-13 over the last 13 days, you can see how this has snowballed. It's the velocity of money!
Know your numbers. Trust your team. Invest right.
Lessons: With every rehab we have done, there are ALWAYS unexpected expenses. We keep a 10% buffer on top of all reno costs. No matter how good your contracting team is, you can't control the supply chain and we met some delays in materials.