I am brand new to this website and have started reading some of the bigger pockets books to educate myself. My girlfriend and I have decided that we want to buy our first home this summer, and we are looking to get a multifamily and live in one of the units.
Through the reading that I have done so far, it is recommended to buy a property at around 80% of what it is actually worth, that needs some work done so you can get some forced appreciation. The part that I am really struggling with is being able to walk through a property, see the state that it is in, and determine how much money I would need to fix it up to realize that forced appreciation. Does anyone have any suggestions on books or any other way of learning how much these renovations will cost. Or is this one of those things that you just have to figure out as you go?
First, I commend you for taking that first step in your real estate investing career, and that is reaching out on BiggerPockets.
To answer your question, I would sign up for your local real estate investment club in your area and network with a few contractors and renovators. See if one of them would go with you to the property to assess the work and how much it would cost to repair the house and capitalize on the "forced appreciation".
Or, you can perform "sweat equity"...doing some of the work yourself if you have some experience with renovating and repairing property.
Also, be sure to soak up the free knowledge here. There is a wealth of information in the podcasts, blogs, and articles.
Finally, when you have a deal brewing, bring it here so the more experienced investors can help you structure and close the deal correctly.
Happy to help any way I can.
Congratulations and I wish you the best in your real estate investing career!
First, I commend you for taking that first step in your real estate investing career, and that is reaching out on BiggerPockets.
To answer your question, I would sign up for your local real estate investment club in your area and network with a few contractors and renovators. See if one of them would go with you to the property to assess the work and how much it would cost to repair the house and capitalize on the "forced appreciation".
Or, you can perform "sweat equity"...doing some of the work yourself if you have some experience with renovating and repairing property.
Also, be sure to soak up the free knowledge here. There is a wealth of information in the podcasts, blogs, and articles.
Finally, when you have a deal brewing, bring it here so the more experienced investors can help you structure and close the deal correctly.
Happy to help any way I can.
Congratulations and I wish you the best in your real estate investing career!
Rental Property Investor · Yorba Linda, CA · Member since 2017 · 140 posts · 58 votes
8y
@Aaron Misiph if you have an understanding of Real Estate Investing and just need more knowledge on estimating repairs/rehabs, I would strongly recommend reading @J Scott book on estimating rehab costs. You can find it on the BP Store.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
Go look at properties for sale with a realtor bring along a carpenter or contractor with you ( buy them lunch) bring a tablet and write down the issues and costs as they rattle them off . Looking at property will not only show you what to look for but it will help you determine value and knowing that is huge . When a great deal pops up you’ll recognize the value and act because you were trained and knew in your mind what a 50-100-200k house should look like
Investor · Coppell, TX · Member since 2008 · 2k+ posts · 646 votes
8y
Hello Aaron! You asked a good question and hopefully helps you with answers that help you make a good decision. Just so you know about who I am and the experience I might have. I have about 30 years of construction management full time experience plus I was a licensed real estate broker in the Dallas, Texas area. I'm 61 years old right now and tend to be very opinionated when making real estate answers.
I became a member of BP about 3 1/2 years ago and have been learning about real estate learning full time ever since then mostly because I am bedridden because of a brain annuerism and a stroke when I was 54. I also read a book about every 2 weeks. In 1980 I graduated college with honors with a business degree that emphasized real estate.
The first thing I would say about your questions is to not depend on any book on construction costs. By the way, I read that book mentioned by Joshua, and like every book that talks about construction cost depicts a cost that is localized. In other words, costs vary by state and that maybe why the costs items are different or undependable.
I believe your cost estimate is best received from a general contractor you trust. I would probably start with soliciting 3 bids and use an average amount on my evaluation of the subject property. You should start looking for you first deal in your "backyard" so you can go there multiple times that wont be expensive on your travel.
You can definitely do that without doing houses first. That saying made by some is a myth. Start off with a lower quantity and work your way up in the quantity. You might start off by managing your first rental property and then hire a good management company with a minimum of 30 units so you can afford one and will takeover the daily involvement to take care of those emergency calls and new tenant screening.
If you have or can get YouTube, watch a man named Grant Cardone who has many videos on there and believes in buying apartments. He owns over 4,000 of them and has been doing this for about 25 years. He can teach y'all a thing or two. He is a little pushy but he knows very much that you can learn from.
The next thing I would suggest is to visit the competition apartments in your subject area to see what they do to move forward, both in rent they charge and the exterior first impression of the exterior that works. The common area things they provide and their looks of the entryway provided will also help you know what to look for when purchasing.
It's location is very important as well as its access. Its better to be close to a highway and have good amenities, school and the school districts, parks, and bus stops for schools and work. I do not know where you are so I am reluctant to say anything geographical except that I hope you are somewhere down south. When y'all are financing shop around for your best deal and do not forget to ask an individual if they will provide you with the financing.
If y'all think that I can provide y'all with anything, please contact me through this site. I am on it just about everyday. Good luck!
Clovis, CA · Member since 2017 · 18 posts · 9 votes
8y
Hi Aaron
I have a couple of suggestions for you.
One is to make sure you take pictures of all walkthroughs that you think have potential. You can look at those later and see more details that you might’ve missed. This also gives you a chance to see what needs to be changed right away or could wait.
Sweat equity that you and your girlfriend can do yourselves will be a plus. Talk to people in your area to find reliable contractors. Look at recently sold homes that have been remodeled to see what was done that you love.
Good luck finding a great place.