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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
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42
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My First BRR deal!

Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Posted Jan 26 2023, 06:43

I just got my first BRRR deal accepted in North Richland Hills! Excited but also nervous about the rehab work needs to be done. It has a basement in Texas! I was worried about the flooding as it happened last August. My agent told me it was due to a sump pump malfunction and the seller replaced it with 2 pumps. The basement is unfinished and the whole house needs an inside out rehab, replacing the floor, knock down some walls, redo the bathroom, drywalls, etc. I have a contractor saying the work can be done in 1-2 month but I am not sure. I am planning to have a couple of contractors coming to give me bids on rehabbing. Learned from David's book, I think I need itemized list from each bids. How's everyone's experience with having contractors bidding and giving itemized bids? Any good suggestions on finding good contractors on your first BRRR rehab? I am also open if anyone has good contractors to recommend. Thanks!

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Jay Hurst
Lender
  • Lender
  • Dallas, TX
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Jay Hurst
Lender
  • Lender
  • Dallas, TX
Replied Jan 26 2023, 07:05
Quote from @Yong Lai:

I just got my first BRRR deal accepted in North Richland Hills! Excited but also nervous about the rehab work needs to be done. It has a basement in Texas! I was worried about the flooding as it happened last August. My agent told me it was due to a sump pump malfunction and the seller replaced it with 2 pumps. The basement is unfinished and the whole house needs an inside out rehab, replacing the floor, knock down some walls, redo the bathroom, drywalls, etc. I have a contractor saying the work can be done in 1-2 month but I am not sure. I am planning to have a couple of contractors coming to give me bids on rehabbing. Learned from David's book, I think I need itemized list from each bids. How's everyone's experience with having contractors bidding and giving itemized bids? Any good suggestions on finding good contractors on your first BRRR rehab? I am also open if anyone has good contractors to recommend. Thanks!

 @Yong Lai  Yes, basements in Texas are unique!  I actually have one in a 100 year old plus house in Dallas as do most of my neighbors. We do have a sump pump but it rarely is used. The key is making sure you have proper drainage around the house, with down spouts going to french drains etc. 

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Nathan Harden
Pro Member
  • Real Estate Agent
  • Puyallup, WA
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538
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Nathan Harden
Pro Member
  • Real Estate Agent
  • Puyallup, WA
Replied Jan 26 2023, 07:08

Congrats!

When it comes to getting bids on a property always keep in mind what your goal is. If you're trying to have it done as soon as possible, then it probably won't be the cheapest. If you want it done the cheapest then it usually won't be done quick or very quality.

That being said, welcome to real estate investing! 

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Scott E.
  • Developer
  • Scottsdale, AZ
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Scott E.
  • Developer
  • Scottsdale, AZ
Replied Jan 26 2023, 07:14

If those pumps are functional, you shouldn't have any concerns around flooding. Just make sure to get them tested and inspected.

Regarding the remodel, 1-2 months sounds very optimistic. In my market, a remodel as extensive as you are describing would take 6-7 months. And that is not including the time it takes to get drawings, engineering, and permits (Not saying a permit is necessary for the work you're doing. But if so, that adds months to the timeline).

I'd get a couple more opinions on remodel. Bring out a few general contractors and have them give you a rough budget and timeline. After you get 3 opinions you'll have a better idea on what to expect.

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Joehn B.
  • Investor
  • Dallas
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Joehn B.
  • Investor
  • Dallas
Replied Jan 26 2023, 07:19

Nice, congrats on getting the first one under contract!

Are you planing to finish the basement?

Get multiple quotes and meet many GC's.   I would say, pick the one that seems to click with you this first time around even if he/she isn't the cheapest.  pick someone who is willing to explain the work well and you will learn tons from the interactions with him/her during the rehab.  Get references and actually call them all. cross check his name in the dallas civil court system to see if he has any lawsuits.

There is a great DFW investor group on facebook, I don't have the name but it's the one with like 40k users.  tons of contractors there and also tons of local knowledge shared on that group, including a list of con artists to stay away from..

I think it may be this one.  I am not on facebook anymore.

https://www.facebook.com/group...

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Mohammed Rahman
  • Real Estate Broker
  • New York, NY
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Mohammed Rahman
  • Real Estate Broker
  • New York, NY
Replied Jan 26 2023, 07:26

Hey @Yong Lai congrats!! Basements are super rare in TX I've learnt from my friends there, that's an awesome find! 

I own properties that have sump-pumps (on the East Coast) and as long as the pumps are always working then you shouldn't have any issues. Just be mindful that I've had tenants unplug them to save on their electric bill, which resulted in minor flooding... so make sure when you rent it out to explicitly tell your future tenants to never switch off sump pump. 

Agreed on the bit with the contractors, it is a good idea to collect multiple bids - If I'm in your shoes, I would also ask my agent to see if they can recommend some contractors. Most agents that work with investors also have their own network of contractors/vendors/etc. that primarily work with investment properties so they'll have a better grasp of what work is needed. 

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Joe Funari
  • Real Estate Agent
  • Keller, TX
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771
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Joe Funari
  • Real Estate Agent
  • Keller, TX
Replied Jan 26 2023, 08:12

@Yong Lai I would suggest you reach out to Finishing Touches remodeling. https://www.facebook.com/Finis... They have helped many of my clients over the years with rehabs. They are reliable, reasonably priced, and will definitely itemize your quotes. Let them know I referred you. 

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David Greathouse
Pro Member
  • Real Estate Agent
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David Greathouse
Pro Member
  • Real Estate Agent
Replied Jan 26 2023, 10:52

Also keep in mind with sump pumps, it might be wise to have a backup battery for them in case you lose power in a huge storm

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42
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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
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42
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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Jan 26 2023, 14:18
Quote from @Joehn B.:

Nice, congrats on getting the first one under contract!

Are you planing to finish the basement?

Get multiple quotes and meet many GC's.   I would say, pick the one that seems to click with you this first time around even if he/she isn't the cheapest.  pick someone who is willing to explain the work well and you will learn tons from the interactions with him/her during the rehab.  Get references and actually call them all. cross check his name in the dallas civil court system to see if he has any lawsuits.

There is a great DFW investor group on facebook, I don't have the name but it's the one with like 40k users.  tons of contractors there and also tons of local knowledge shared on that group, including a list of con artists to stay away from..

I think it may be this one.  I am not on facebook anymore.

https://www.facebook.com/group...

Welcome to Biggerpockets!

 Hi @Joehn B., Yes, I need to finish the basement. It has 2 bedrooms and 1 bath down there. Thanks for the facebook reference.

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42
Posts
15
Votes
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
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42
Posts
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Jan 26 2023, 14:19
Quote from @Jay Hurst:
Quote from @Yong Lai:

I just got my first BRRR deal accepted in North Richland Hills! Excited but also nervous about the rehab work needs to be done. It has a basement in Texas! I was worried about the flooding as it happened last August. My agent told me it was due to a sump pump malfunction and the seller replaced it with 2 pumps. The basement is unfinished and the whole house needs an inside out rehab, replacing the floor, knock down some walls, redo the bathroom, drywalls, etc. I have a contractor saying the work can be done in 1-2 month but I am not sure. I am planning to have a couple of contractors coming to give me bids on rehabbing. Learned from David's book, I think I need itemized list from each bids. How's everyone's experience with having contractors bidding and giving itemized bids? Any good suggestions on finding good contractors on your first BRRR rehab? I am also open if anyone has good contractors to recommend. Thanks!

 @Yong Lai  Yes, basements in Texas are unique!  I actually have one in a 100 year old plus house in Dallas as do most of my neighbors. We do have a sump pump but it rarely is used. The key is making sure you have proper drainage around the house, with down spouts going to french drains etc. 

Thank you, @Jay Hurst, will make sure the contractors do a good job on the drainage system.

User Stats

42
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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
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42
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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Jan 26 2023, 14:21
Quote from @David Greathouse:

Also keep in mind with sump pumps, it might be wise to have a backup battery for them in case you lose power in a huge storm

 Thanks for the tip, @David Greathouse!

User Stats

42
Posts
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Votes
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
Votes |
42
Posts
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Jan 26 2023, 14:29
Quote from @Mohammed Rahman:

Hey @Yong Lai congrats!! Basements are super rare in TX I've learnt from my friends there, that's an awesome find! 

I own properties that have sump-pumps (on the East Coast) and as long as the pumps are always working then you shouldn't have any issues. Just be mindful that I've had tenants unplug them to save on their electric bill, which resulted in minor flooding... so make sure when you rent it out to explicitly tell your future tenants to never switch off sump pump. 

Agreed on the bit with the contractors, it is a good idea to collect multiple bids - If I'm in your shoes, I would also ask my agent to see if they can recommend some contractors. Most agents that work with investors also have their own network of contractors/vendors/etc. that primarily work with investment properties so they'll have a better grasp of what work is needed. 

 Well said, thank you, @Mohammed Rahman!

User Stats

42
Posts
15
Votes
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
Votes |
42
Posts
Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Jan 26 2023, 14:30
Quote from @Joe Funari:

@Yong Lai I would suggest you reach out to Finishing Touches remodeling. https://www.facebook.com/Finis... They have helped many of my clients over the years with rehabs. They are reliable, reasonably priced, and will definitely itemize your quotes. Let them know I referred you. 

 Thanks for the reference, @Joe Funari!

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Jacob Maes
  • Real Estate Agent
  • Dallas, TX
45
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92
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Jacob Maes
  • Real Estate Agent
  • Dallas, TX
Replied Feb 1 2023, 20:19

Hey @Yong Lai congrats on the first purchase. Biggest hurdle in my opinion is rehab and to make sure you aren't getting taken advantage of with contractors. I work with investors and invest myself. Happy to give you some rehab numbers on around what contractors charge for certain tasks. When it comes to itemized bids, can be a little tougher if you're getting a bid from a more investor friendly contractor. If you get a bid from a larger company they will have it broken down but typically charge quite a bit. Let me know if you want me to send it your way!

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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
15
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42
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Yong Lai
Pro Member
  • New to Real Estate
  • Dallas, TX
Replied Feb 2 2023, 05:54

Hi @Jacob Maes, yes, please, PM sent.