This is a story about my coaching student; Russell Sanders.  Russell is a full-time employee of the federal government.  He was tired of losing money doing RE deals, then he decided to join forces with me.  Russ found this deal on the MLS -- and we think it will be a doosey.

This house in Capital Heights, MD was vacant and bank-owned.   The numbers are as follows:

$75,000   purchase
$48,000   rehab

Honestly, when I first saw this house, I thought -- “heavy cosmetic.”  I mean it really was not that bad -- but it needed expensive items, like new windows, 2 new baths, a new kitchen, new doors, a new front entrance, new carpet, some new plumbing and updated electric.  But seriously, its an easy rehab.  I mean, easy in the sense that we won’t be gutting the place all the way back to the studs -- which is refreshing for a change. 

We’re about 3 weeks into the rehab and we’re seeing some serious progress.  I have some great video (but I’m biased) of the progress we’ve made thus far.  Man, I’m starting to love this technology stuff!

Video Tip

The basement here at Gunther is below grade, of course.  While adding the new full-bath, I noticed a big old pipe next to the drain for the toilet, and was wondering what the heck it was.  I got a lesson on plumbing that I thought I’d share with you.  If you don’t like poop floating in your pretty finished basement you must see this extra-special REI video tip.  In the second 1/2 of the video, I talk about how to properly remove a column in the basement.  Check out what I learned!

Post from: Craig Fuhr

REI Coaching Student Rehab -- 5041 Gunther Rd. Part 1

A house with a face so ugly only a mother could love it!

This post to the blog has been a long time coming, but (said in my Bones voice) damn it – I’m a real estate investor not a blogger.  My student, Prencella “PJ” Hall; a wife and full-time employee at Johns Hopkins, pulled the trigger on this monstrous beauty a few months ago.  I actually found the house through a local wholesaler – and was able to immediately help PJ make a decision because I had already done several successful rehabs in the immediate area.  In fact, my partner and I sold 2817 Violet; just one house to the left of PJ’s house at 2901.

REAL ESTATE INVESTING TIP: Folks – you ‘gotta know your target area.  This is some pretty elementary stuff, but seriously, it works!  You’ve got to pick an area.  You’ve got to farm it, work it, cultivate it – and make it your baby.  Being intimately familiar with your target area will allow to to react with lightening speed when you find a deal.  I just hosted a Club meeting with my good buddy Mike Hurley.  Up until about a year ago, Mike would take deals ANYWHERE in Maryland. One day he had an epiphany as he was riding to Chrisfield for a deal – he said to himself, “Why am I riding 1.5 hours just to get to this deal?”  Long story short, Mike decided that he could find more deals in his own back yard then by chasing his tail all over the state.  The result?  The guy is killing it by focusing on two very small zip codes.  He knows every house on every street – and he’s making deals.  So pick an area, and focus!

Here are the numbers of PJ’s deal:

Purchase:  $17,000
Rehab:      $85,000
ARV:         $165,000

This house will be completely gutted and will be transformed from a functionally obsolete “hot-mess” into a 3 bedroom, 3.5 bath magnificent, and luxurious mini-mansion.  These row-houses are some of the biggest in Baltimore City.  With great porch fronts, soaring 10+ foot ceilings, massive basements with equally incredible ceiling heights, and with the exception of the occasional shooting in your front yard – this neighborhood has it all!  Oh, how I love me some Charm City.  Seriously, my student Prencella will turn this motha’ out.  And, we will once again transform an extra-crappy vacant, non-tax-producing house in an otherwise marginal and forgotten neighborhood into a super-sweet party palace.

So check out the pics – and yes, VIDEOS (Look at me getting all fancy-pants on ya.  There will be many more videos to come).  You will not believe how crappy this house looks!  There was so much junk left in this house, we actually discovered an extra bathroom several days after we started the demo!  Top that.

Click the picture below to see all the “before” pics!

Post from: Craig Fuhr

R.E.I. Coaching Student Rehab: 2901 Violet Ave, Part 1

For the first installment of this rehab go here:  5204 Wesley Rd – Part 1

How about that new dormer and front porch?  Both are 100% rebuilt.  Nothing was salvageable.  Just about the only the only things we saved in this house were the roof joists, the exterior walls, some interior studs and the floor joists.

The second floor of this house has been totally transformed, from basically an attic to a REAL floor with two nice bedrooms, and a spacious full bathroom.  To make the transformation, my student Joann opted for a much larger dormer to create the bath space.  The bathroom ceiling will be vaulted to create an even bigger feel.  We also rolled backed the walls 16 inches to create more space in the dormer bedrooms .  And most important, we created more ceiling height by raising the ceiling trusses by about a foot.  It doesn’t feel like a cavern anymore.

CHECK THE PICS!

The first four photos of the set below are essentially exterior shots of the new porch, new roof, and new dormer.

The next four photos show the first floor framing and how we’ve opened up the first floor to create a more modern feel and functionality.

The next 9 pictures are of the second floor framing.  There you will see all that we’ve done to create the great new space that is the 2nd floor.

The final four pictures are pretty cool.  I’m often asked, “What do you do with uneven floors that are often found in old houses that have settled over time?”

The answer – We jack up the floors and make them even again.  When you’re doing a full-gut rehab, this is a very easy task.  If however you are doing a rehab where you are not removing all the plaster or sheetrock, plan on doing some serious wall repair if you jack up the floors.  Look closely at the final few pictures and you’ll see that we used blocks of treated lumber to bring these floors up 1-3 inches in some spots.  Pretty cool.

Even better – look at the last two pictures.  That should give you some indication as to why the floors were so uneven.  This is one of two rotted columns trying desperately to hold up up the main beam in the basement.  To give you an idea of how bad each column was – my contractor needed only a good kick with his boot to remove them!

Not shown in all the pictures is the new electric, plumbing and HVAC.  Today, we’re waiting on rough inspections.  Once we get the green light from Baltimore City, we’ll insulate and start hanging drywall.

So, that’s it for now.  I’ll have a lot more to show you in about a week.

Click for all the latest pics!

Post from: Craig Fuhr

Student Rehab Story, 5204 Wesley Rd – Part 2

Mmmm…just look at that sweet piece.  Does that look like opportunity, or what?

My student, Joann; a mother of three girls,  a wife, and now part-time real estate investor, picked-up her very first rehab after joining our investment club less than 3-4 months ago.  And as her coach and mentor – I am proud as a peacock.   I’d hate to play poker with Joann, because she strikes me as the quiet calculating type; and unflappable at times when others would crumble.

Well, we’ll just see over the next few months how Joann keeps it together, cause’ folks – this is one serious rehab!

Address: 5204 Wesley Ave, Gwynn Oak, Maryland 21207  Google Map
Purchase Price:  $50,500
Rehab Amount: $80,000

Description:
This craftsman style house was purchased from a wholesaler – who tried to pull a few fast one’s on Joann, but with my help, she successfully navigated through the bull-hockey being thrown by the wholesaler.  Look at the pictures and you will see the house needs everything, including many dumpsters to haul away all the trash left by the previous owner.

The house has an unfinished full basement.  On the main level; living room, dining room, very small kitchen, bathroom, and bedroom.  Walk up the stairs to the second floor and you’ll find a dormer attic with two small bedrooms.  So that’s 3BR / 1BA.

TIP:
Always be ready to walk from a deal as you should always remember there will be another coming!  If you feel like someone or something in the deal stinks like a skunk, then the whole deal stinks!  You’ll find that some investors/wholesalers like to pull last minute stunts that increase your costs, and their total profit.  It’s called the “puppy dog close.”  Why do you think those pet stores in your local mall let you play with the puppy before they tell you how much cute little Fido costs?  Because they want you to fall in love with that cute little pooping ball of fur before they slam you with the bill only after you already have visions of little Fido cuddling up next to you in bed!  That’s what this wholesaler tried to do to Joann.  Folks, never fall in love with a deal!

The Plan:
We are going to turn this craftsmen out!  We’re talking full-gut rehab back to the studs.  The budget allows for all new everything, with the exception of a finished the basement. We’re gonna tear out walls, add a big dormer, and totally change the functionality of this house to bring it into this century.  Just wait.  You’ll see.  This house is going to be an absolute stunner!

So here’s the pictures of Joann’s very first day of demo!  Enjoy, and check back next week for more progress.

Click this picture for more photos

Post from: Craig Fuhr

Student Rehab Story, 5204 Wesley Road – Week 1