ARV and Home Improvement along with introduction!

8 Replies

Hey everyone,

Had a couple of newbie questions and wanted to introduce myself. I started my REI journey during the middle of last year after stumbling into it from personal finance podcasts such as ChooseFI, and after listening to some of the biggerpockets podcasts which spun me into the amazing world of real estate and how it can help me reach financial independence. I have listened to many podcasts along with read several books and started browsing the forums everyday. After reading David Green's book on Long Distance investing, I think I will need to do out of state investing as my current , and possible future market (Washington DC and Denver), are overpriced and not conducive to cash flowing properties. I have been looking in the midwest and found a market I want to start in (Minnesota) , also reaching out to a BP member who is in the area who introduced me to a good property manager. 


I am currently saving up 20% for a conventional loan (as it may not be possible to owner occupy) and my biggest concerns at this point (along with all the other newbie concerns) is that one of my recognizable weakness is home improvement. I plan to buy a property under market value if possible and then use BRRRR in a SFH, or multi family if possible (duplex, triplex). While I have a passion to learn everything I can about rehabbing a property, I am starting from the ground up and was wondering if you guys had any good ways that you started. My main concern, as this will be out of state, is to not get ripped off by contractors and understand what needs to be rehabbed in order to improve the value and how to even estimate ARV accurately. I have read J Scotts introduction to estimating ARV and understand you need to look at comps and use the method where you compare similar properties. I also know that a team effort is vital in this as the property manager I have found has a good idea into estimating ARV, knows contractors and does BRRRR himself. I have a year or so before I have the 20% saved and wanted to start learning about what goes into home improvement such as the price differences between countertops, flooring, etc.

Any advice or resources you guys have would be great. Glad to be apart of this group. 

Originally posted by @Ankush Ratwani :

Hey everyone,

Had a couple of newbie questions and wanted to introduce myself. I started my REI journey during the middle of last year after stumbling into it from personal finance podcasts such as ChooseFI, and after listening to some of the biggerpockets podcasts which spun me into the amazing world of real estate and how it can help me reach financial independence. I have listened to many podcasts along with read several books and started browsing the forums everyday. After reading David Green's book on Long Distance investing, I think I will need to do out of state investing as my current , and possible future market (Washington DC and Denver), are overpriced and not conducive to cash flowing properties. I have been looking in the midwest and found a market I want to start in (Minnesota) , also reaching out to a BP member who is in the area who introduced me to a good property manager. 


I am currently saving up 20% for a conventional loan (as it may not be possible to owner occupy) and my biggest concerns at this point (along with all the other newbie concerns) is that one of my recognizable weakness is home improvement. I plan to buy a property under market value if possible and then use BRRRR in a SFH, or multi family if possible (duplex, triplex). While I have a passion to learn everything I can about rehabbing a property, I am starting from the ground up and was wondering if you guys had any good ways that you started. My main concern, as this will be out of state, is to not get ripped off by contractors and understand what needs to be rehabbed in order to improve the value and how to even estimate ARV accurately. I have read J Scotts introduction to estimating ARV and understand you need to look at comps and use the method where you compare similar properties. I also know that a team effort is vital in this as the property manager I have found has a good idea into estimating ARV, knows contractors and does BRRRR himself. I have a year or so before I have the 20% saved and wanted to start learning about what goes into home improvement such as the price differences between countertops, flooring, etc.

Any advice or resources you guys have would be great. Glad to be apart of this group. 

Welcome to BP!

You can learn a lot here.

Great question.

And you might not like my answers but I'd rather give you the truth you need vs. lies you want :-)

  1. Out of state investing specially BRRRR is tough. Not impossible but tough. Specially as your first deal. Why? With BRRRR, there are so many things that can go wrong as you rightly pointed out. You might get the wrong contractors, the wrong property manager, you might even get the wrong lender so your money is stuck and you can't refinance out.
  2. If you can do your first deal in your backyard, then that will be preferred. Maybe partner up with another experienced investor. He/she puts up some of the cash and do all of the work. You put up the credit and most of the cash and learn. Then you split the profit. By doing this, you have some semblance of control, you learn and your risk by working with an experienced partner becomes less (of course after vetting the partner very carefully)

Welcome to BP Kush!! I would start going to some of your local REI meetups. We have some out here and I've been to a few with contractors there so you can ask questions to them and I believe they provide honest answers since you're not bidding anything with them yet. Getting 2-3 bids is important because you'll want to see what the cost is based on the location. Lastly have everything in writing so the scope of work is agreed upon for both you and the contractor. Keep up the research and in one year you'll be killing it!

@Ankush Ratwani   As I read your post I had 2 thoughts and it turns out that @Michael Ealy & @Armin Nazarinia both touched on them. To clarify my thoughts I would recommend you find a Flipper that is local to your current market, work with this person as a mentor for no charge. Help in any way you can which will allow you to learn things the books don't teach. This will be your pay and could save you 10's of thousands in the future. For ARV you will want a local Realtor to the area you are investing (Minnesota). I highly recommend that the Realtor you use is also an investor.

Thanks everyone for the warm welcome

@Michael Ealy The truth is always better than lies. I've heard the same thing about of out of state investing as a starter and thats why I am cautious. I think seeing how a BRRRR actually goes down in my backyard may be a good way to start to understand what goes into the rehab, seasoning and how the cash out refi really works. I've always been a fan of the working for free method in the beginning to gain experience (i'm a resident physician and have been doing this for years essentially). I also like the idea of a partner to bring in capital and experience. I have contemplated the idea of a hard money lender in the beginning which may not be the best way to go right off the bat. At the same time as my out of state investment I was going to buy local FHA multi family and house hack which may be better to invest my time into first.

@Armin Nazarinia Thanks for the quick reply buddy. I'm actually going to my first REI meetup this Thursday in Ballston Virginia. Asking contractors would be a great idea to get a lay of the land. I think materials vary by location, but I will start getting an idea by asking local investors what they pay for things in my market.

@Cassidy Burns Thanks!

@Tim Swierczek Thanks for the advice Tim. I think you are right that books can only get you so far. Finding a mentor will be important to understand all the fine details with the process. 

Do you guys have any good book/blog recommendations in terms of rehabbing and flipping? 

@Ankush Ratwani

Welcome to Bigger Pockets, Ankush!

You'll find plenty of friendly, knowledgeable people willing to help respond to your questions. Many members are experts in their respective fields related to real estate investing, whether that is real estate brokerage, wholesaling, flipping, buy and hold, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.


There are some pretty cool discounts on various products and services offered as Perks to BP members that you might want to check out: https://www.biggerpockets.com/perks/pro



Originally posted by @Daniel Marjanen :

Ankush, where in Minnesota were you looking?  I do residential construction work near the twin cities, so if you would like help in that area let me know.

 Daniel, I will PM you with details. 

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