Tearing down a house

[Hunter Emond]

I'm looking to get into the city of Schertz, Texas while exploring all possible ways of getting there. One property I came across was one that I'd rather tear down than renovate. Not sure if this is the right forum to write on but just wondering if anyone would have any knowledge/experience on doing something similar. whether it would be a calculator you liked best or anything on how to calculate doing something like that before diving into it.

[Andrew Postell]

@Hunter Emond thanks for the post.  This is a good forum to post in and hopefully we can give you some things to think about.  

Here's what I want you to think on for this deal (or any here in Texas):

1. Who's your contractor that will do the work for you?

2. What is the ARV of the property? How do you know that (we are a non-disclosure state)?

3. What is your exit strategy for the property?

4. Who is your lender for this transaction?

Yes, I could assume you are doing a BRRRR method property since that's this forum but lots of people post here...so I thought I would ask about the exit strategy.

Tearing down a property is a pretty big deal. 25+ years of doing the BRRRR...I've never done that. There are people who HAVE - but they started renovating first and then built their experience into larger projects.

BRRRR SKILLS NEEDED

Generally speaking you will need several things to successfully complete a BRRRR:

1. ARV - being able to calculate the Value on your own (meaning, without the wholesaler telling you the value) is really important.
2. Repairs - You will likely need to know how to budget the repairs as well. Getting a contractor can be extremely frustrating especially if you need to make an offer without even looking at the property. How do you calculate repairs without a contractor? You may need to lean on other local real estate investors in the beginning. Or maybe even just focus on properties with a very light rehab?
3. Lenders - You will need a lender on your BUY step and on your REFINANCE step. And I would HIGHLY recommend to read this article I wrote for Bigger Pockets on how to find good lenders that you can find HERE. If they are good, they should be absolutely definitive on rate, terms, costs, etc. Trust me, many lenders will tell you they can do this...but it's very rare to find. When I first started BRRRR'ing my properties lenders would tell me "That's illegal"....it's not, they just didn't know anything about it.
4. Finding Properties - and this is the absolute hardest step of anything right now. So network like crazy and find some good resources. It's going to be hard...but if it were easy then anyone could do it.

Out of State

Now, as a 15 year, out-of-state investor my recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in. Keep in mind that you may never see your asset. That's an ENOURMOUS amount of trust/money to put into a stranger's hands. What I mean here is that if you know someone in a different city...but that city may not have as good as numbers as this other city...then stick with the city where you know people. One wrong move, one wrong contractor, one wrong vendor…will erase any "benefit" one city has over another. Your network is the most important piece for any potential returns when you invest out of state.

*WHEW*  Hope you don't mind me commenting that much on your post but truly just trying to help.  Feel free to ask anything else and thanks for posting.