To submit a home remodeling project, you will need four copies of the proposed plans, a signed application form from your municipality, and proof of payment for the submission fee. Board approval is required for renovations in condos or co-ops, and most building managers have their own architect review the plans and Scope of Work. To obtain a building permit, you must complete a permit application, prepare a site plan, and expect the approval process to take at least a month if your board and property manager are efficient. For more extensive projects, such as adding square footage or moving a wall, you may need a permit. If you are doing the work yourself, you will need to get your own building permit, which involves drawing up and submitting plans.
Every apartment renovation requires authorization, from a new coat of paint to a new stove or air conditioning unit installation. Renovating a rental property can be complicated, and renovations often require a permit, and state or local legal requirements may apply. Landlords generally need to provide notice and obtain consent for non-emergency repairs or upgrades while tenants are living in the apartment. As a landlord, you might want to renovate your apartment for the next tenant. A comprehensive apartment renovation checklist is provided, including five critical questions to ask yourself as you plan your property-wide apartment renovation project. Firms performing renovations must provide pre-renovation education to the owner of the unit and an adult occupant.
📹 Apartment Remodel – Pro Tips For Landlords Ep.1
In a rent-controlled world, how do you collect above-market rental rates when there is a Rent Cap in place? The truth is, you …
What are the tenant rights during renovations in California?
California tenants have specific rights during landlord renovations, including advance notice, habitability maintenance, and quiet enjoyment. To protect their rights, tenants can review their lease, document issues, and communicate with their landlord. Landlords have obligations like providing proper notice, maintaining habitability, and minimizing disruption during renovations. If a landlord violates a tenant’s rights, they may file a complaint, pursue legal action, or negotiate a resolution. Consulting with a tenants’ rights attorney can help ensure rights are protected throughout the renovation process.
Landlords have legal responsibilities when renovating rental units to protect renter and property owner rights. Tenant protection laws vary by state, so landlords must understand their obligations when planning renovations. In California, the Tenant Protection Act outlines tenant rights during renovations and construction projects. Landlords must notify tenants in advance and provide alternative living arrangements if necessary. Rent control laws may limit rent increases due to construction.
During renovations, tenants must be informed of disruptions and their rights. New owners must abide by local rent and eviction laws to protect renters. Prompt repairs and assistance from property management are crucial.
How do you ask your landlord for upgrades?
Before requesting any upgrades or changes to your home or property, it’s crucial to understand the lease details. Be prepared with supportive data, offer to do the work yourself, ask politely, and respect their response. Some tips for landlords include understanding the lease, being prepared with supportive data, offering to do the work yourself, asking politely, and respecting their response. Some leases may allow tenants to repaint the rental as long as they return it to its original color and condition before moving out. Additionally, you may have the right to plant annuals in your flower beds without consulting the landlord first.
How do I make a renovation checklist?
The DFW Step-by-Step Home Renovation Checklist is a comprehensive guide for those looking to transform their existing homes into dream homes. It outlines the process, including setting goals, creating a detailed plan, setting a budget, selecting the right materials, prioritizing design elements, choosing which projects to tackle first, and enlisting professional help. The checklist is designed to help individuals stay organized, on budget, and informed about the progress of their project.
It also ensures that no project is overlooked during the process. Whether you’re hiring a professional contractor or focusing on your own renovation, the checklist will help you stay organized, on budget, and ensure that nothing is overlooked. The checklist is designed to help you make informed decisions and stay on track with your renovation project.
Can a landlord make a tenant pay for repairs California?
In accordance with the California Civil Code, landlords are permitted to deduct the requisite sum required for repairs and cleaning tasks related to tenant-induced damage exceeding normal wear and tear from the security deposit.
What is considered a major renovation?
Major home renovations involve removing walls, installing new cabinets, moving utilities, or altering room layouts, while minor renovations involve cosmetic changes like a new backsplash, updated cabinet facings, or tile in the bathroom. Major renovations require structural support and are more expensive than minor ones, such as a new heart surgery or putting in a pacemaker. Minor renovations, on the other hand, are mostly cosmetic and can be done by DIYers.
Major renovations typically address the integrity of the house, while minor changes are mostly cosmetic and can be recovered in full or more by the time the home is sold. For example, opting for marble in a spa-like bathroom can cost more than a major renovation, but minor renovations can be recovered in full or more by the time the home is sold.
In summary, major and minor home renovations involve a combination of cosmetic and structural changes, with the latter being more affordable and often more cost-effective.
How do I ask my landlord to paint walls?
In California, landlords are typically responsible for repairing and repainting damaged walls, especially if the tenant has been living in the rental for years and the walls need a fresh coat of paint. If the walls are in abnormally bad condition shortly after moving in, the tenant would bear the cost and responsibility. It may be acceptable to paint apartment walls in California, but it is crucial to contact the landlord first and carefully review the rental agreement to ensure approval.
If you have painting questions in the Sacramento area, contact PaintRite Pros, with over 25 years of combined experience. They offer free interior paint estimates and serve the entire Sacramento area, including Dixon, Roseville, and Dorado County.
What is the correct order of renovation?
The home renovation timeline in Wake County, North Carolina includes site preparation, demolition, rough work, drywalling, finishes, interior trim and cabinetry, painting, trim out from trades, lighting, and fixtures, and flooring, final finishes, and cleaning. This comprehensive process is essential for creating your dream home and can take anywhere from a few weeks to a few months. Understanding the order of operations and the reasons for changes is crucial for a successful renovation.
Do landlords have to paint between tenants in California?
California law mandates landlords to maintain habitable living conditions and address health or safety hazards posed by existing paint. Federal law requires landlords to disclose lead-based paint and hazards to tenants if the property was built before 1978. In such cases, landlords must follow specific rules for lead paint removal or encapsulation, which may involve repainting surfaces. If a tenant causes damage beyond normal wear and tear, landlords may deduct the cost of repairs, including repainting, from the tenant’s security deposit.
What is the first thing to do when renovating?
The planning and design phase of a remodel involves setting a budget, collaborating with a designer and builder to communicate your vision, securing permits, and other pre-planning steps. A clear financial plan is crucial to ensure the remodel stays on track and within your means. Collaboration with the designer is essential to translate ideas into actionable plans, and securing permits early on can prevent delays. Your builder will also assess the impact of the remodel on your daily life and advise on temporary relocations for comfort and safety.
How do I ask my landlord to fix something example?
The sender is requesting a repair in their rental unit due to a specific issue affecting the room/area. They request the necessary repairs to be completed within a reasonable timeline to ensure the safety and habitability of the property. They also mention that addressing rent payment concerns is crucial for those experiencing financial difficulties or having concerns about rent payments. They request prompt communication with their landlord.
📹 Complete Cost Breakdown of Building A New Construction Apartment
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PLEASE leave the closet layouts – broom and linen closets. ESPECIALLY, the broom closet 10:24 – you can put the vacuum cleaner, buckets, etc. or the tenant can switch it out with install a flexible spring rod for winter jackets, etc. Love these older building layouts, lots of square footage, LOTS of closet spaces, mostly nice layouts and lots of electrical outlets. Though, they do need electrical to be updated. Great informative article.
I built a house during the recession, it turned out to be the best time to build a house as I built a house for $75k that appraised for $130k when it was finished. I then paid the house off in full 4 years later. I didn’t have the cash to build a house when I did, now my house appraises for $230k. I am anti-debt too, but sometimes biting the bullet and getting a mortgage is the right thing to do.
Hi thach . What about the other monthly expenses associated with that many units ? – management fees and commissions- deduct another 10% or about 4k from gross, right ? Then all of the utilities, what is that, another $6k give or take ? And then maintenance expenses will eat about another 2k minimum. And what about a 10% vacancy factor ? Thats another 4k deducted from the gross. Even a 5% vacancy factor is still a 2k deduction. Theres much more than just PITI involved. Do you mind discussing all the true and additional costs that I mentioned above ? Thanks in advance.
I just sold a property in Portland and I’m thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I’m really just confused at this point.
Total invested 3.7million borrowed & 500K his cash so 4.2Million over 3 years to build. He said the gross is 40K for 31 units so that’s roughly $1300 a month rent. He said his monthly expenses $24,500 or $15,500 a month positive cash flow. Few things i noticed he didn’t point out. (Maintence Monthly Expense (Materials and Labor) and also Property Management. That 15K a month can easily dwindle with those costs plus take into consideration vacancies, and move outs and any rehab work needed when a tenant moves out. I doubt highly that he is making that money cash flow on this property. Also saying his property will double in value every 10 years again that’s a big IF. I believe this guy is successful but i rather have him paint a more realistic picture of the investment and expenses.
I am trying understand how on the 10 year fix loan of $3,686,770 only has a mortgage expense of $17,813. According to that information should the mortgage payment alone be around $37,000? If im not mistaken I believe he accidentally said 10 year loan instead of 30 year loan which would make a lot more sense. Could someone verify this.
Thach can give us all this information but only about 1 % of us might venture out to do this because it takes GUTS to dive into a development like this. Not easy. But I subscribed to his website to learn more . Seems like a straight shooter to me. Thanks Thach. His kids are the luckiest. I want to teach my kid how to do this in the future.
Here in the North East, the prime multi family unit for maximum profit is called the “Duplex”. Two living units attached to each other either as ranch, townhouses, or condo’s. Typically, a fire wall separates the two units for safety and security reasons. Ideally, the landlord can live in one unit and rent the other unit out.
Here are the “other” expenses associated with this building that arent PITI: 1) Average monthly management fee in Seattle is 10-15% no matter the age of the building. Lets go low and say that’s 4k deducted from the “cash flow” on top of the mortgage 2) $2k off for water bill 3) Much like average property management fees in Seattle the vacancy rate in Seattle is readily found with a simple Google search and it is 10%. So that’s another 4k off the cash flow a month (banks qualify with a 25% vacancy factor, FYI not even 10%) 4) sewer service at 900/mo plus about another 900/mo for trash pull out is about another 1800/mo 5) maintenance for a building of that size, regardless of age, if you’re not earmarking 10% of gross rent for repairs a month you risk taking money out of your pocket. So that’s another 4k off from the cash flow for monthly maintenance and repairs Add all that up- 6k management 2k water bill 4k vacancy rate 1.8k trash and sewer . 4k maintenance That’s about 18k in additional monthly expenses on this property, on top of the mortgage and taxes payments. Which means the buildinf is about a break even + or – a couple thousand dollars. That is not an ideal result after so much time, expense, and debt thats been involved i agree that a 5% treasury or CD would be a much preferable investment, and better playing, without all the hassles, headaches, ans uncertainties that come with dealing with this many tenants.
only thing I can say is, bravo. You made a passive income source, and you worked on it for 3 years – for 100k passive income per year, that is amazing. Nto to count the value of property, and how it is rising. I wish i had more people like you around me. I have a product that I rent to other person that meks millions, while I make 40k per year – I just don;t have capital and “know how” to go to the business myself. I tell you, if you lived in EU, I bet you could take my assets and make a fortune – as I am simply not skilled and not brave enough to do it.
I dont like these numbers. First, you need to deduct another AT LEAST 4k off that 15.5k “cash flow” for management fees, vacancy rate, maintenance, etc. That brings you down to about 11k. That’s already not great on its own but once you factor in the over $1M out of pocket spent for the land, early site prep, and two and a half years of mortgage carrying cost with no rent collection, it only looks worse. The clock has already been ticking for 2.5 years on that ultra low, never going to haopen again interest rate, and then it’s over, the mortgage will shoot up to 26k a month just for principal and interest and the property will be a black hole. That means there is only 7.5 years to “cash flow” about 11k a month which is 132k a year which is just umder 1M in the 7.5 years there is left on this mortgage. Based on just the out of pocket expenses that’s not even a break even before the property resets to the historical average interest rate. This place is an immediate SELL, if you can, while it is nice and shiny and new.
3.6 million loan for 10 years at 3.8 percent – Mortgage is 36,000 per month. Was that included in your monthly expense? Cash flow is low and building will likely not be 100% occupied always. Repair and maintenance not factored in or staff salary, marketing. Taxes, utilities. 24k cash flow is high estimate. High investment and poor return.
So it took 3 years to finish. Did you have to pay the mortage/property tax on the construction loan for 3 years without rent coming in? I did the math and that is 750k out of pocket. So you had to pay for the land out of pocket, 20% down on the construction loan, then 750k+ mortage over 3 years. It would take 5 years of cash flow at 15k per month to just pay off the 3 years of 0 cash flow mortage.
I spent the last month researching home renovation how tos for this or that so I can start small and purchase a low and I mean low cost property fix myself and rent it out and keep building from there. Obviously I’m very far off from even that but I have always been interested in property like this and decided that money isn’t going to just come to me so I better get good at doing it myself before I can afford to pay other people to do it for me
Wow!!! Well done. I thank you for sharing this information with us. Guessing you have decades of experience doing this and to share this valuable information is very kind. My wife and I are retired so we have the time and resources to build something down here in AZ for more income. You have inspired us Thach!! Thank you again.
here in Mexico, there’s a new building for 2 years that they were selling overpriced apartments for. Thing was just a plot of land for 2 years, but little did any of us knew that all those projects had made deals with the municipal president. There was a rebuilt roads with even bike lanes, better than in the U.S. construction of that small Stretch of road took a year and half to build and they still aren’t finished. Municipal president is also getting a kick back from the contractors. My front door neighbor with the biggest house in the neighborhood got his truck set on fire, He is a retired politician, and he was one of the good ones against corruption. Did it come out on the news? Nope. You’d had to see it to know it happened.
What are you paying yourself as.the contactor, project manager, consultant, etc. From point A to point Z? You can’t only be shooting for cash flow/ long hold returns, correct? Are you paying yourself/or a LLC. justifiable fees along the way? If not, what does someone attempting to do this live on for 3 years from A to Z?
Why so nice. I had a friend whose dad was just like this guy in San Francisco. He made alot of money developing houses. His last project bankrupted him. he was building over 35 homes in this complex. The city held up his permits and for some reason took their time ( I think some inspectors wanted money under the table). Eventually he was behind time and his construction loan was due. Long story short, he lost everything…All his hard work gone on one project. There is always risk in everything you do. just be careful. Thanks for sharing. Glad you are successful as people work hard and take risk especially in a market like this.
You seem like a nice and knowledgeable guy but not seeing anywhere close to a $6M value at that cap rate. And thats without even knowing what the full monthly expenses are (utilities, management, etc) Not even 4M. That same 4M could go into a 5% bank or treasury note right now and yield 17k a month without the headache and expense of tenants.
Chart based on this article: Category\tCost Land and Entitlement\t$500,000 Site Work\t$100,000 Concrete Work\t$190,000 Wood Framing\t$700,000 Electrical\t$400,000 Finishing\t$500,000 Total Cost to Build\t$3.6 million Export to Sheets Mortgage Payment: $17,813/month Expenses: $24,506/month Rent: $40,000/month Positive Cash Flow: $15,494/month Equity: $2.6-2.7 million Appraised Value: $6.3 million Sweat Equity: $2.7 million Potential Value in 10 years: $12.6 million Potential Value in 20 years: $24 million This is just a rough estimate, and the actual costs may vary depending on the specific location, materials used, and labor costs
Fellow RE investor from SC. Can you share why insurance is laughable and whether all construction loans have such a low interest rate? Also property tax is so low, is it common for your area? I pay $4.500 for Triplex in my area and my property assessed for around $0.5mil, not $6 mil like yours. Feels like it’s property tax for that tiny house you replaced with nice building lol
Hi Thach, I’ve been renewing my interest in RE and catching up on your articles. Based on your costs, under $135k per door seems like a deal. Can I ask how big the units are and the approximate cost per square foot? In this market of high interest rates, are you basically just waiting it out, or is it still possible to build and rent? I’ve done a dozen proformas for properties here in L.A. and it seems nearly impossible to cash flow, even with 50% equity. Construction costs are high, construction financing is through the roof, and yet properties have not quite come down in price to make construction feasible. I was lucky to have completed by home build a couple of years back – I could not afford to do it with today’s interest rates and construction costs. What can we do?
Love your enthusiasm and knowledge but commercial real estate appreciates at a slug’s pace, it does not “double every 7 years” regardless of where it is. And with current interest rates (as you mentioned) you would more than likely get around what you have into it (4.2M) if you were to try to sell it, despite the appraisal you got. But if you are getting those rents you should definitely hang onto it for the cash flow. Great job! Looks nice!
The most dangerous thing is he assumes the price will keep going up especially when he doesn’t count the macro conditions going on. Will the govt keep inflating the dollar? Will employees salary keep up with inflation? Will other countries want to keep dollars knowing that Inflation erodes their investments? What happens when the govt paused rent payments when a majority of the population can’t afford rent?
Very cool article and I appreciate you sharing! When it comes to the monthly cash-flow… Property Management fees, vacancy, maintenance & repairs, Capital expenditures etc were forgotten to be subtracted from the monthly cash flow number. Still a great project and a cool long-term hold I wish you could do another longer article with a full and total breakdown of every cost for the construction
CAP! he really didn’t break it down in its entirety. He used a calculator and gave made up figures that may or may not have been actual. Instead, he could’ve gave the cost per sq footage the way that most contractors and builders will charge. Another thing, he’s giving fictitious property evaluations such as “every 7 to 10yrs the commercial building will increase 2X. Commercial building values are assessed by the monthly residuals so unless tents are doubling every 7 to 10 yrs, neither will his buildings! Cap… cap.. cap! lol… #Chuckbillions
That mortgage payment seems low for $3.6 million /10 years. Are you making interest only payments? The amortization should be $37k for principal and interest. With the other expenses it won’t cashflow if paying down the principal. Cash out refi the interest rate would be double at best. Am I missing something?
As a painter for 20+ years I can tell you that 65k is dirt cheap! Of course you have to use contractor grade paint. 10$ a gallon and sometimes they add a bit of water to stretch out the paint…no money is made as a comercial painter unless your wiling to take those shortcuts 😂. And of course the owners of the building have no idea about any of This 😊.
Thank you sooo much for posting this!! I am building a 42 unit apartment in san antonio tx. Great to see someone who shares info so freely. BTW he says in a different instagram article the square foot per unit average is 275 Square Feet per unit and it rents out for $1250 to $1350 per month That is an INSANE amount per square foot but I can EASILY see why people pay that much since the Layout is soooo BEAUTIFUL!! GREAT WORK!!!! Your Rent Per Square foot is almost 3x mine Great JOB!!!
Hey Thach, you really motivated me to take my first step in investing. I’m 25 years old. I have 100k saved up. I was wondering if you mentor personally. I wanted to get into real estate. Just thought I’d shoot my shot bc you are really an awesome role model. (I’ll also toss in dental work for free forever lol)
Realty check: 3 years to build. 1.2 million while you complete it. Additional year(s) to fill to capacity and start bringing in that 180k before taxes income. Let’s estimate 5 years and 3 million in the hole before positive income. If you’re black, they’re probably not going to estimate your equity that high (it’s a thing). How did you afford the payments during your 3 year construction period?
Wow, nice hard work! Just wanted to add 2 things. 1. Maintenance and repairs. It can definately eat into the profit margin. 2. The value and equity is good but we need to account for depreciation due to wear and tear (age). Why would someone buy a 12 year old building for 13mil if they can built a new one 12 years from now for say 6mil. Just saying. Great work though.
I have a question. I have two pieces of land which I bought for 11,000 and now the are worth 23,000. I’m using a usda construction loan to build a house in one lot and I was planning to keep the second lot to eventually build a rental property as it’s cheaper to build a new construction than buy a house already built. The total cost of the house I’m building will be 220,000 (including lot) when the market value of that house will be 250,000. Because of the high interest rates I was thinking to sell the second lot and use the money as a down payment for my already started new construction. I’m already putting 30,000 for my first house and with the earning for selling the second lot I would be putting down 52,000. Do you guys think this is a good idea or should I wait to build a second house in my second lot? Would it be hard to get a construction loan for my rental?
This is gonna sound weird but when i saw that Equity price of 2.6 million i almost cried. It all just clicked. I know its gonna take hard hard work but that kind of money is the key to my life. Not for the jets, lambos, or parties but instead my forever home, my kids (i dont have kids yet) college funds, the option to choose when i work, to pay my mother back for all shes done and the opportunity to travel. This comment is a promise. A promise to my future wife, kids, a promise to mother, my family, and a promise myself.
Hi I like your article I’m interested in starting a apartment building I would like to ask Save all the headaches and Red Tape.Where do I go that can get everything done in one shot Who can I call or do you have a team?I’m located in michigan I would like to have Partner You want to build from the ground up
Wow this is amazing and really informative… with the look of things you building is located in USA, are you an architect or a builder? can you do a article where you explian members of your team- how you were able to put all this together because i was want to replicate someday Thanks i really want to learn from you More power to your elbow
Agreed that your making money on this, i think that the numbers are accounting for a lot of things, repairs (even new, things will happen over time), vacancy, turnover costs from old tenant to new tenant – cleaning, paint, etc. Your def making money, but to say it’s a clean 186k annual isn’t completely true. Still good numbers nonetheless
Great. However, I suspect it’s not easy to qualify for a loan to build such units and it may also require lots of your personal funds and reserves upfront. Thus, this makes it hard for the average person to make this dream a reality. No? Any advice for how the average person could get started here Thach?
is it more cost effective to build an apartment from scratch or buy an exsiting one and renevate it up to code? Guess it depends on the scenario and location. Like imagine how much rent your missing just from those two years of construction not happening than you actually have to build it and that takes a while more.
@Thach Nguyen Thank you for all your advice and inspiration,much appreciated. Is there a business plan or system in place that your sons are using with the washing machines and also what to watch out for etc. For me this is an excellent idea and I want to use the same idea to raise some capital so that I can start purchasing property in the future. I’m from South Africa. Thank you