Pensacola – The Rehab Process

From the pictures below, Pensacola was a great first investment property. It showed that even in a home’s worst condition, it can be revived to it’s former glory. The home had a great skeleton and foundation. Also the location of the home was prime rental territory. Walking into Pensacola for the first time after closing my mind quickly believed that I had just made a major blunder in my life. The rehab process had just begun. The abundance of knowledge I would learn could never be taught in a classroom.

The task of rehabbing a property with little to no construction experience seemed daunting. With the encouragement, support and work ethic of my family and friends, rehabbing my first property become an easy task.

Getting Contractors

In my last post, I talked about finding contractors. Here is a detailed description of each major contractor’s scope of work. Also make sure to speak with an accounting professional about which forms a sub-contractor must complete. I had mine fill-out a W-9 and a 1099-MISC.


For plumbing there were four bids that ranged from $3,500 to $15,000. My guess was the most expensive bid was given since the company had a lot of prior work and would only make time if they made a killer profit. The home was bought with no copper piping for water since it was stolen during the foreclosure process. The scope of plumbing work consisted of

  • Installing new PEX piping for entire home
  • Installing new gas lines for dryer, HVAC, water heater and stove
  • Pipe kitchen and bathroom sinks

The contractor I had gone with was not the lowest bid but the man seemed very knowledgeable. He had years of experience and was very inviting to teaching me some tools of the trade along the way. This all seemed great until the job took over five weeks when it was originally scheduled for five days.

If he was scheduled to work on Wednesday, he would show up the following Tuesday. If he needed a part he would have myself or someone else that was helping run to the hardware store to get what was needed. When he installed the new hot water heater, he did not solder the pipe exiting the tank all the way around. Since he did this on a Friday and I did not go to the house until Saturday afternoon the small bedroom was flooded with an inch of water. Best of all, he intended to come to the home early Monday morning fix his leak but showed up promptly Wednesday afternoon. (Luckily the home is on a slab and there was no sheet rock put up at the time)

When installing the bathroom sink he cracked a fitting which led to more flooding in the bathroom. I easily could have told the man to never come back but I already had given him a half deposit to start the work. When it came time to connect the gas line to the furnace in the attic he said that since he did not install the furnace, he would not touch another man’s work. If I wanted him to touch another man’s work it would cost me another $500. (In the bid he said he would connect the gas line to the furnace) Luckily the HVAC company was friendly and showed me exactly how to connect the gas line. (They also would not touch another man’s work)

The entire process with the plumber was one out of a rehab horror story. It taught me a valuable lesson and that is that you cannot count your chickens before they hatch. After meeting the plumber for the first time it seemed like a no brainer to hire the man for the job. After the process I would not refer him to my worst enemy. Of course when the job was finally finished, I paid the man and went on with my day.

I could have easily scolded the man, threatened not to pay him for his work or even filed some sort of grievance since the contract stated it would take less than five business days. I did none of the above because in the end what would it have accomplished?


Electrical was a major expense, one in which was not accounted for in my original budget. The home required a whole new service panel (about $2000) and some other minor repairs. They included:

  • Some new wiring to bring home up to code
  • Rewiring appliances in the kitchen
  • Installing ceiling fan/light combinations in living rooms
  • Replacing fan and lights in bathroom
  • Installing lights in both bedrooms controlled by a switch near the doors
  • Recess lighting in kitchen
  • Outside flood lights
  • Changing all receptacle covers to white

The electrical process was simple. They came in and did the job they were hired to do. The guys were pleasant and did a great job. When I asked a question they answered with a detailed explanation. The amount of knowledge gained from speaking with some of the subcontractors was valuable to my future success in REI. You can never ask enough questions, as long as your questions are valid.


Being in New Jersey, the summer months can be in the high nineties and the winter months can be below freezing. The home had an old baseboard hot water system where most of the copper piping was stolen and there was no boiler. Since the pipes ran in the concrete slab, solving any issue would be expensive.

The home did not have any type of cooling system so I had gone with a forced hot air and air conditioner system. The home has an attic so it was simple to install the duct work and furnace. The company that did the HVAC installation currently offers full electrical and plumbing services. You can bet that I quickly became friendly with the owner. Since friends with contractors is imperative to your success as a real estate investor.

The HVAC process and system works flawlessly. Having air conditioning is a major bonus to a home in NJ and a reason why I had over forty inquiries about renting the property in less than two days on the market! The added expense was a major payoff.

The Rest of the Rehab

Aside from plumbing, HVAC and electrical, the rest of the rehab process was done by myself or with help from a buddy. The list of work included:

  • Kitchen remodel
  • Bathroom remodel
  • Removing a closet to give more space to the laundry room
  • Installing five windows
  • Installing exterior doors
  • Replacing shed roof
  • Installing sheet rock in 75% of home
  • Flooring entire home
  • Fixing exterior walls
  • Paint entire home

Check out my arsenal of tools to see what was needed to complete this and all my projects!

Those are some of the major repairs done to the home. I had hired buddies of mine to repair the roof to the shed since heights are not my best friend. Google and YouTube became vital allies in the rehab process. Aside from structural projects, attempting the unknown is one of the most valuable ways to learn a skill. As a teacher I tell my students every day that in order to succeed, you must fail in some capacity. The same is true with REI. I succeeded in rehabbing Pensacola, but I had failed many times in individual projects.

Here are some photos after the rehab!

None of the work above had been contracted out. This was one of the main reasons why my rehab costs were low. When speaking with friends and other investors, they ask how much it cost to redo the kitchen or bath. When they would find out the costs they couldn’t believe it until I had said that the work was done by myself.

Rehabbing your investment property on your own is not the answer for everyone. I know many investors who never step foot in their properties and contract out 100% of the work. The DIYer inside does not allow this to happen or maybe it is just my checkbook. Since I am a high school teacher, I have a good amount of time during weekends or breaks to complete my investing projects.

Look out for a detailed post that talks about the numbers of Pensacola!

Any questions just ask below or if you have any insight let your voice be heard!


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