Posted by dwchina on July 25, 2002 at 10:11:33:
Thank you Michaela for your response
New Kitchen vs 1st investment property - Posted by dwchina
Posted by dwchina on July 25, 2002 at 08:41:17:
I have a problem as a Newbie. My problem is that my current house which I have been in for 3 years is in need of new kitchen (nothing fancy just new cabinets) because I eventually will rent this house out and buy another house to really start my REI career. I want to know is it a good idea to save money for the new kitchen or either use the money for my first investment property. I was thinking if I purchased new cabinets and everything which should run around $4500.00 then when I’m ready to rent the house out I should be able to rent with no real problems because my kitchen cabinets are 46 years old and not in good condition. Or should I take the money and invest in my first property. I know the kitchen cabinets will set me back as far as money, but I’m not sure what to do. Cabinets or investment property which one do I choose?
dwchina
Re: New Kitchen vs 1st investment property - Posted by GL(ON)
Posted by GL(ON) on July 29, 2002 at 09:31:10:
If the cabinets are loose from the wall look inside and see if the nails are working loose.
There will be a board across the top of the cabinet inside. You will be able to see the loose nail heads especially when you push the cabinet back into place.
Empty out the cabinet then push it back into place, pull the nails out and replace them with screws. Do one nail at a time.
I have done this and never had a problem again.
I wouldn’t replace the cabinets. You won’t get any more rent and you shouldn’t put money into a rental unless you are going to get something out of it.
If you were selling that might be different. A new kitchen is a good selling point and you can often get a better price with a new kitchen.
Definitely fix the cabinets, maybe repaint and add new handles to dress them up a bit. Use your money to buy more real estate.
Re: New Kitchen vs 1st investment property - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on July 25, 2002 at 13:14:59:
DW China–+++±--------------
Not seeing your kitchen myself, it is hard to be sure. But, I would suspect that you do not need new cabinets.
You say the “kitchen cabinets are 46 years old and not in good condition.” I don’t know how bad they are. I don’t know what level of renters you will cater to. However, I suspect you could get away for much, much lower cost than you mention.
Renters, especially in lower income areas, do not expect fancy cabinets and cabinet doors. You may need to do nothing.
Maybe a coat of paint is all you need. Maybe all you need is to replace hinges and handles/knobs. HINT: this is much cheaper than new cabinets.
Here are a couple of other possibilties: “The Modern Look.” No doors at all, just open shelves. Maybe with some veneer on them to make them look nice.
You mention three years. Start looking for USED cabinets. You could get them for much lower cost or even free. Watch for remodeling projects and find out if you can get the old cabinets. Watch for classified ads in the newspaper. Find building material recyclers. Contact kitchen cabinet installation folk. Make a deal to pick up the pulled out kitchen cabinets for your own use.
You see? This and Michaela(GA)'s Home Depot suggestion are how rental property owners think.
Now, there is still at least one other possibility: reface, not replace. New doors, maybe new faces. Again, cheaper.
You might also look at some books on remodeling, rehabbing, and the like. There may be some good ideas there.
I also endorse Paul V. Xavier’s suggestion if you want to get into transactional investing as opposed to value investing. Before three years you could probably make enough money with your investment money to allow you to buy the cabinets if you want.
Good InvestingRon Starr******
Good InvestingRon Starr********
Re: New Kitchen vs 1st investment property - Posted by Paul V. Xavier
Posted by Paul V. Xavier on July 25, 2002 at 11:49:20:
Couple of ideas for you:
If you use the cash you have now to do a deal and flip a property in a month or two, you could easily make the $5K to replace your cabinets.
You can finance the cost of you kitchen with credit card or loan. Then you could purchase a property with the cash you have that will have enough positive cashflow to make payments on a credit card/line of credit that you used. This allows you to keep your cash in equity in the property you purchased and get your kitchen done for free and you’ll still have the positive cashflow when the kitchen is paid off.
Good luck,
Paul V. Xavier
President
Hawaii Real Estate Investors
Re: New Kitchen vs 1st investment property - Posted by michaela@mindspring.com
Posted by michaela@mindspring.com on July 25, 2002 at 09:14:42:
unless your kitchen is huge, you should be able to get home depot’s mills pride cabinets for half that. put them together yourself. it’s a job, but if i can do it (technical moron ;-)) anybody can. if it’s a rental you can get an inexpensive in-stock countertop. then instead of renting you could lease/option it with $ 2000 - $ 3000 down, which will give you most of the investment back. a lot of l/o will not go through and people just walk away.
just my thoughts
michaela
Re: New Kitchen vs 1st investment property - Posted by dwchina
Posted by dwchina on July 25, 2002 at 14:08:49:
Thanks Ron:
I do have home improvement books and I watch a lot of HGTV for home improvment projects. My cabinets are the oringinal cabinets of the home and I was thinking of maybe just pay or restain them because they are wood and new handles. I’ve already painted the kitchen and I bought new tile to place down on the kitchen floor would make the kitchen a little better. My cabinets are hanging from the wall and look a little loose as if they were going to fall right from the ceiling. I do agree with you regarding on what to do and I will follow through. Thanks so much.
dwchina
Re: New Kitchen vs 1st investment property - Posted by dwchina
Posted by dwchina on July 25, 2002 at 14:15:09:
Thanks Paul because I really should be thinking more on the investiment end of things to invest and then make a profit to generaate money and later on buy kitchen cabinets for free and continue to have positive cashflow. Thanks so much for your input and making me see a different light regarding these cabinets and finances for my REI ventures.
dwchina
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