R.E.I. Coaching Student Rehab: 2901 Violet Ave, Part 2

The Ugly Duckling is Turning Into A Swan

Feel free to leave comments below!

Here’s the second installment of PJ’s mondo-Baltimore City rehab. At just under a few weeks into the rehab you can see we have the place gutted, and framed. You’ll also notice that we waterproofed the basement which as I understand, Baltimore City is requiring for all new rehabs whose scope includes a full-finished basement.

REAL ESTATE INVESTING TIP: Beware, if you plan to gut a house and finish the basement in Baltimore City, you may be required to waterproof. Listen, waterproofing is a plumbing job. A lot of plumbers don’t like to do it however, because its dirty grunt work. You have to bust up the concrete slab, and excavate a trench of about 7 inches wide and 12 or so inches deep. That my friends makes a BIG PILE of mess. Once that’s complete, the job is pretty simple. The plumber will drop in a plastic corrugated pipe and you route that to a sump pump. Cover it all over with some gravel, then fresh cement and viola’ your done. Seriously, the costs of the material for a job like this is less than $300-bucks. But the labor is ROUGH! That’s why we have a $10/hour guy break up the floor and haul the debris. Then once the plumber is done, we bring the $10 guy back to cover up the plumber’s work.

Check out the video.

At this point we are post-demo, and we’re well into framing. We’ve pretty much busted out most of the interior walls, added new support beams, and we’ve busted up two bedrooms and made them into one grand master bedroom complete with its own master bath. We also took away from the over-sized landing at the top of the steps to add space to the otherwise tiny main bath. We framed in a pantry, a 1/2 bath, and a laundry room on the main level just beyond the kitchen, and we added some nice arched entrances into the living room and dining area. The kitchen is immense and will have a sit-at breakfast bar for three to four – in addition to an adjacent dining room. The house is really starting to take on a much more modern and open layout.

Click on the picture below for more pics of our progress. Enjoy

Popularity: 97% [?]

Share and Enjoy:

Posted by Craig on Thursday, February 12, 2009 at 1:31 am
Filed under 2901 Violet Ave, Featured, Most Recent, Student Rehab Stories · Tagged with 2901 Violet Ave, Coaching Student, Real Estate Coaching, Real Estate Investing, Student Rehab Stories

Luis

Craig, that was a great response. I know this is an old post but am I curious to find out how this
deal turned out.

I am dealing with a similar neighborhood, maybe not as bad but the difference is the rehabs are not selling (including mine ). I am getting creamed by REO's selling for $30k less.

Any recommendations on dealing with a great rehab in a bad area?
Craig Fuhr

Luis -

As I recall my student put about 112K into this property and sold it for $165,000 - and to my everlasting chagrin, never paid me for all the help I gave her. Oh well, bad Kharma for her. I can put my head down on the pillow at night and sleep just fine, thank you very much.

I also had a hater along the way on this one who would stop by the blog and make drive-by comments on how we would never sell the house because it was in such a horrible neighborhood.

Hey hater....we sold the house in less than 1/2 of the City's average DOM. Hate on loser!!! Hate on.

Thanks for asking, Luis. And, thanks for reading my blog.
Law

Craig,

Good stuff - that was my boost for the day - go get'em! Whooo.
Maria

William - how are you going to sell $165k rawhouse in a low-income neighborhood?

Especially if you ahve a board-up next door.....
Perhaps Craig can explain.
Thanks
Maria
Craig

Listen - I am a patient guy and The Lord knows I started this blog in an attempt to talk about what is good in the market (rather than all the bad) - and to answer as many questions as possible. But what I find very difficult to tolerate is jabs and digs from folks who know nothing about what they speak.

Questions are great. Let's have a robust discussion. But personal vendettas and thinly veiled jabs from the uninformed and the uninitiated don't serve the conversation.

I replied to Kevin much the same way as those who taught me the business would have replied to me. Some would take my response as coy or even disrespectful. I guess that's what separates those who feel they are "entitled," to those who truly understand what it takes to work for and earn success. When I was a young investor and I asked a question that was answered in a similar tone, I would dig, investigate, and tirelessly work to learn the lesson that my teachers were trying to convey.

Now - regarding this house in Park Circle. The uninitiated and the uninformed would simply look at this house, look at the board-up next door, maybe read a few Baltimore Sun headlines and sophomorically ask, "How can you sell a house like this?" And they would automatically and almost instinctively think (and even dare to say), Craig has something to hide, or Craig is off his rocker, or Craig is pushing a student into this rehab only to enrich himself.

But, if those same people would simply take cursory but closer look, they would quickly discover a much more compelling story - and a neighborhood that belies its gritty veneer. Sure, Park Circle is rough. There is crime. There are drugs - and it is ugly! But folks, there are homeowners in this area who care. They are good people who once loved and who are dying to take pride in their neighborhood again.

What the uninformed and uninitiated "drive-by" haters don't also know is that I have already rehabbed, sold and profited from 5 rehabs, and 4 wholesales in this very tiny area. Yes, I was the first rehabber in Park Circle, not the first investor - but the first rehabber. Now, I'd like to tell you that my strategy was always to buy and sell to homeowners in Park Circle, but I originally bought two houses as rehabs for rentals. I wanted to be a landlord. Both houses were on Hilldale Avenue. It was only after my partner and I saw a house in the area sell for $120K, that we both agreed our strategy could be refined to buy, rehab and sell. Our thinking was, why buy and hold to make a few hundred dollars per month cash flow, when we could buy and sell and make 30K? Maybe you disagree with the strategy, but you can not deny our success.

Along the way another investor came along who also saw the potential in the area. To the best of my knowledge, the gentleman (and he is a gentlemen) has bought, rehabbed and profited from at least a half dozen rehabs in this very small area and has many more projects in the pipeline.

Starting to get the pictures, doubters? Ask yourself - on these 6 streets that span only two blocks each - how many homeowners on each street does it take to REALLY transform a neighborhood?

Don't believe me? Then I would ask you to do what REAL investors do. Drive the neighborhood. Look at the property sales in SDAT and on the MLS. I would list them all here for you, but that would be too much like spoon-feeding a three-year old who should already know how to use a knife and a fork.

But let me titillate you a bit more:

I've sold two houses on Hilldale, 2 on Norfolk, and one on Violet. I've wholesaled three on Violet and one on Reisterstown. My competition (that fine gentleman) is selling houses for 180K on Reisterstown. The last house I sold on Norfolk Ave (2915 to be exact) sold before it was even on the market for 165K. Why do I tell you this? Why would I take the wraps off my golden-goose? Why? Because REAL investors come from the "big-pie" theory. There are more houses in this neighborhood then I could ever rehab. I also know that most will never get of their butts or leave the comfort of their anonymous little keyboards to actually get out their and take a chance to make some money.

Doubt all you want. That's what fence sitters and wanna-be's do. Successful investors make great plans, take chances and then execute. Sometimes they win, sometimes they lose. There are no guarantees in this business. I can not guarantee my student will have the same success that I have had in Park Circle. No one could. But unlike the uninormed and the initiated, my student, Prencella is not looking for a gaurantee. She's smarter than that.

If you want guarantees go get a 9-5 job.
William

Hi I wanted to chime in on this.
I was on the bus tour on Feb 21 and I was able to tour this property.

I have to say Craig, that I was quite impressed with the quality of work and the transformation that home has gone through. (please post some updated photos soon!)

Violet ave is located in a low-income neighborhood but one should never assume that low-income equates to crime and drugs.

While on the tour I had the opportunity to have a short chat with one of the residents of the neighborhood. She didn't give me the impression that she was a drug abuser nor a criminal. She was very well-spoken. She seemed very happy to see investors/rehabbers coming on to the street transforming some of the properties that had been eyesores for a long time.

But back to the subject, I believe that Craig knows his stuff I've been on the side line reading his blog on his other properties (like the house across the alley).
So I'll vouch for Craig's work and his knowledge....and oh yeah, I'm NOT a member of the club.
Craig

Kevin - Are you the Kevin who is in The Club?
kevin

Yes this makes sense but wouldn't all the board ups scare potential buyers away and hinder the banks from approving the loan?
Craig

Kevin

Good to hear from you. A board-up next door is not an issue when you can easily own that property as well. Board-ups in the neighborhood are generally not a good thing. You must really know what is going on a neighborhood, as sometimes just looking at the board-ups don't tell the total story.

Make sense?
kevin

Craig congrats to your student. I have a question or two. With all the board ups and the house next door to this one being so yucky what makes this a good deal? In this market and with this neighborhood being in the condition it is would it not be hard to resell this property?

Please respond

Thanks