Tag: Real Estate

335 Front Street Demo Begins

Out With The Old…

Demo is officially underway at 335 Front Street. Although demo is technically destruction, it feels good to see the old materials removed in preparation for the brand new. Now that the slate is coming clean, it becomes easier to envision how great this house is going to look once the improvements are started. Below is a list of the high level demo activities captured in the photos:

  • Removal of siding. Replacement of the siding on the house is long over due and beyond salvaging. At some point, someone began painting the house and then stopped halfway through leaving the house 3 different colors.

  • Kitchen demo. The team removed the stove, sink, 8 feet of cabinets (upper and lower), and a drop ceiling. Yes, there was a drop ceiling in the kitchen. This is going to be a great improvement drywalling the ceiling and cleaning up the electrical mess that was left behind. The new kitchen will include a dishwasher and some additional counter space. The plan is to close up the window to the far right to make more room for cabinets and countertop space. We had discussed adding an island for additional storage, but due to the placement of the doors, it would impede the flow of the room.

  • New half bath and laundry room. The photo below is a room on the opposite side of the kitchen that will be converted into a half bath and laundry room. Previously the laundry was located on the second floor within a half bath. That space on the second floor will be converted into a full bath giving the house an additional full bath.

  • There are two additional rooms on the first floor that needed some minor demo. The hardwood floors are going to be refinished where possible. Upon demo, it was discovered that laminate flooring was glued to the hardwood in one of the rooms. Depending on how removal goes, this room may end up having to be carpeted. Fortunately, the room with the bump out on the first floor has wood flooring that is in pretty good shape and they will refinish nicely. This room would make a perfect office! The radiators, that were previously in each room throughout the house, have all been removed.

  • There hasn’t been any demo to the staircase. I just wanted to show a photo of how beautiful this staircase is. It is going to look absolutely amazing once it is refinished.

  • There are three large bedrooms on the 2nd floor of the house. The carpet is being removed and the walls and floors will be refinished.

  • The master bedroom. This large bedroom has the window bump out like the front room on the first floor. The demo for the master is not yet complete in these photos. The closet is being enlarged to be a walk-in and a door to the bathroom is being added to create an ensuite.

  • The 3rd floor bonus. There is an awesome and very spacious 3rd floor. We do not have plans to finish this area since the home will already have 3 bedrooms and 2 1/2 baths, but this could be a great opportunity for the new homeowner if there is a desire to finish the area or simply used for storage. Access to the 3rd floor is a walk up staircase for easy accessibility.

Demo is well underway! The new siding will start going up within the next week or so which will be a major transformation for the exterior. There is still demo, electrical, and HVAC work to be completed on the inside before building out, but things will quickly progress. Keep checking back to see the rehab progress at 335 Front Street. Ready to buy or sell a home? Great! Contact us at info@iHeartRehabbing.com

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335 Front Street Property Redevelopment Plan

Summary

This property was acquired in May of 2016. This was an exciting purchase for us for a number of reasons. First of all, it is our first redevelopment project. Secondly, this property is full of charm and so much potential. The terms of the acquisition did not allow us to view the inside of the property until we closed on the property.

Property Details

The house is zoned residential in a quite residential neighborhood. The 1920 victorian style home has a beautiful front porch, a double lot, and a breathtaking view of the Susquehanna river from the back patio and the master bedroom.

Property Features:

  • Bedrooms: 3
  • Bathrooms: 1.5
  • Number of stories: 3
  • Lot size: 8,712 sqft
  • Zoning: Residential

Construction Details:

  • Parking: 1 car garage and additional off street parking in rear
  • Public utilities: Water / Sewer
  • Roof: Shingled
  • HVAC: Oil (radiated) / No air-conditioning

Planned Improvements:

  • New HVAC system with propane heat and central air-conditioning. Requires running ductwork throughout and removing the existing heating system.
  • Repair and install new shingles on the roof
  • Remove old siding and install new siding
  • Re-finish the hardwood floors and install tile flooring in kitchen and bathrooms
  • Completely demo existing kitchen and install redesigned kitchen including new appliances
  • Relocate laundry to first floor off of kitchen
  • Create a new half bath on first floor off of kitchen
  • Turn existing half bath on the second floor into a full bath
  • Modify existing full bath to become an ensuite to the master bedroom
  • Create a walk-in closet for the master bedroom
  • Make landscaping improvements
  • Repair and update front porch

The most unanticipated expense for this project is the installation of the new HVAC system. Upon gaining entry into the house, we found that the radiators of the hot water system were cracked due to the water in the system freezing over the winter while the house was vacant. This meant that all of the radiators would need to be replaced or install a new system. The decision was made to install a new HVAC system, which requires running new ductwork throughout the house. This will give the house the benefit of central air conditioning and a propane heating system. There are plans to install natural gas lines throughout the town in the near future and the propane system could be easily switched over to tap into the natural gas line once it is available.

Summary

Overall, after inspecting the home and developing the improvement plan, we are confident that the transformation of this home is going to be nothing short of amazing. Once the redevelopment is complete, the family that purchases this home will own a house that neighbors will be envious of. Our mission is to ensure quality craftsmanship and attention to details on all of our redevelopment endeavors. Learn more about us by visiting www.iHeartRehabbing.com 

Are you ready to buy or sell a home? Do you have questions about residential redevelopment? That’s great! We would love you hear from you.

iHeartRehabbing Introduction

Residential redevelopment excites us in so many ways. We love what we do! There is nothing more exciting than finishing a property and seeing a family move in to cherish it for years to come. It feels good to make such a positive impact to local families, neighborhoods, and communities in which we live and work. This blog was started to share our journey through some of our redevelopment projects to inform and educate others on what we do. Follow us on this blog and at www.iHeartRehabbing.com for regular updates on our current projects and an inside look at the progress.

Commercial Due Diligence Period

I am currently in the midst of a deal that I am very excited about! Upon settlement, I will have control of a building that is in excess of 217,000 sqft with strong positive cashflow at approximately 80% occupancy. The building is used as a dry storage facility. It does not have any climate control, so the merchandise contained within the building cannot be prone to freezing.

The ultimate plan is to redevelop the property as mixed use residential, office, retail, etc… The building is three stories high and zoned as CBD (Commercial Business District). This is the ideal zoning which will allow the first floor to be comprised of office space and retail allowing the second and third floors to be residential. There is going to be quite a bit of work ahead once we reach closing. My plan is to take ownership and then take a few months to stabilize and get my bearings around the existing revenue generating businesses.

The structure itself is red brick, steel, and concrete with old pine wood flooring. It was used as a manufacturing facility for many years before being converted into the current use. The building materials lend themselves as the perfect canvas for some very unique and elegant feeling apartments. I can easily envision spaces with large industrial style windows, fourteen foot ceilings, exposed brick walls, wood floors, and industrial style HVAC systems. The layout allows for an abundance of light. I feel that the floor plan design could be a little tricky, but I have confidence that a good architect and designer could determine the be utilization of space without sacrificing the historical charm of the building. Of course, I do have a contingency plan of continuing / growing existing storage functions in the event that the redevelopment plans become too cumbersome of a hurdle.

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Photo of the inside of the building

Before any of the design plans can get underway, I need to get to closing and ensure that I am making a solid business investment. below are some of the things that I am gathering throughout the course of due diligence.

Contracts:

– Elevator maintenance 

– Snow removal

– Security deposits

– Roof maintenance 

– Trash removal

– Test control

– Hazardous waste removal service

– LP (liquid propane) service


It is extremely important to review any contracts that are currently in place because they will most likely come with the sale of the building; unless there is language stating that they are non-transferrable or contain some sort of cancellation clause. You do not want to get stuck with a bad contract or one that you can’t live with. It is important to review these contracts before the expiration of your due diligence period so that you can negotiate any disagreeable terms with the seller.

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Exposed brick walls and natural light

Building / business documents to ask for:

– Leases / operating agreements

– Roof warranty

– Mechanical issues

– Elevator permits

– Environmental consulting (environmental discovery)

– Building and fire code violations (get from municipality)

– Building permits 

– Financial records (ie. aging reports)

– Insurance and declarations page

It is always a good idea to ask for more than what you think that you will need. Carefully review all of the leases for any kind of cancellation clauses, tax agreements, or rent restrictions that may impact your plans following the acquisition. One of the documents listed includes the roof warranty. Was the roof recently installed? If so, it is most likely under some kind of warranty. Make sure that you are persistent with getting this information because roof issues can lead to some extremely crippling expenses.

Aging reports are helpful to gain insight on whether the rents are being paid and which tenants may be trouble for you in the future. Unfortunately, you can’t always trust the seller of a property to provide you with accurate information. Additionally, if you are financing the purchase of the building, then your lender may require you to provide rent payment history reporting. Speaking of financing, ensure that you have a complete list of everything that the lender will need in order to close on the building. You will not want to wait until the days leading up to closing to realize that you’re missing a vital document. This will delay closing and add unnecessary stress to the transaction.

The insurance and declaration page is something new that I have added to the list. The building involved in this particular deal has a very high insurable value. It has made obtaining a policy a little more complicated than usual. I am looking to obtain the contact information and insurance terms under the seller’s current policy. Perhaps the property is currently under insured, which will impact the overall P&L and the CAP. In any case you will always want to make sure that any property that you own is insured properly. Understating the value could have major implications in the event that you ever need to file a claim. You could end up getting nothing from a policy that you had been paying into for years if you’re not honest.

There is a lot involved with the due diligence period. The broker that you are working with should be knowledgeable in the areas of real estate that you are investing in. You may also wish to hire a real estate attorney to help review the leases, contracts, and overall deal. Regardless of who is on your team, I would recommend becoming educated yourself. This will help you to ask the right questions of your team and to ensure that they are qualified. I recommend reading the following book: The Due Diligence Handbook For Commercial Real Estate: A Proven System To Save Time, Money, Headaches And Create Value When Buying Commercial Real Estate. It is available on paper as well as audio and it is a very quick read. Investing an hour of your time could save you thousands of dollars on your investment.

I would love to hear from you about your real estate endeavors. What other information do you ask for during a due diligence period? What went right? What are some opportunities and areas that you will improve before making your next deal?