736 N Ninth St. Allentown, PA
As the first deal in Arctica's portfolio, this property marked the beginning of our journey in real estate investment. Despite being limited in information and capital, our inaugural residential property yielded promising returns. We managed both small and large renovations, overcoming numerous challenges along the way.
Immediately after signing the final documents, we headed to the property and began renovations by tearing out the carpet on the second floor. Our goal was to waste no time in making the property profitable, thereby boosting income and creating a strong foundation for future repairs and improvements.
Within six months, we:
Installed vinyl flooring throughout the entire second unit
Painted the entire second unit
Replaced both large boilers in the basement
Installed new kitchen lighting
Cleared the property of unwanted pest infestations
Remodeled the second-floor bathroom with new lighting, a tub, and vanity
Installed new mailboxes and appliances
Replaced the single-sheet glass bay window with two modern windows, improving airflow for the first-floor unit
These efforts, some anticipated and others unexpected, provided us with invaluable experience and helped us become seasoned investors.
By taking charge of property management, handling small repairs, and shifting utilities to tenant owned we boosted the property's capitalization rate (Cap rate) from 7% to over 9% within just six months, adding over $10,000 in value. We plan to refinance within the year, pull out our capital, increase rents, and transform 736 from a neglected urban home into a clean, thriving passive income machine.
