I close on my first BRRRR next week--a duplex in need of 40k of repairs over the next 6 months. Both units are rented through next year (including one to a tenant with an ankle bracelet who hasn't paid rent since April and is not going to be super cooperative with anything). Anyways, I live 2.5 hours away from the property, and going down there is possible but a headache.
I am considering options about how to manage the rehab process. I've got a number of processes figured out, but I can't figure out how to inspect contractor work before paying them without relying (and paying) a PM to do it. Having a reliable handyman helps, but they are busy and work all over and can't just run over to a site whenever a contractor calls and says they're done. Relying on a contractor to send photos seems like a bad idea.
Paul, you've been sold a bill of goods if you believe managing this BRRRR from afar (for your first time) gives you a good chance of getting a renovation in at or under budget and properly done. Some areas of the country are worse than others. Anywhere around here, I wouldn't give a tinker's damn for your chances. If you're going to do this, you should be prepared to sleep in the driveway of the place for weeks and possibly months. And even then, I wouldn't give much for your chances if you don't have the construction knowledge to GC this yourself and vet the subs while they're working. A good 99% of people doing their first BRRRR certainly don't.
Is it possibly you'll get through this smelling like roses? Sure. But not likely, and if you intend to run a string of this you're going to need the kind of luck to pull it off successfully that only Publisher's Clearing House winners ever experience, 1.7 billion:1 odds, six times worse than your odds of winning the Powerball jackpot.
Property Manager · San Diego, CA · Member since 2020 · 205 posts · 162 votes
6y
Hey @Paul Witte congrats on the BRRRR deal! Are you going to be doing the rehab with the tenants in place?
Doesn't sound like the tenants would be reliable people to help you oversee everything. And if you are not open to having a PM do it, and if you're not comfortable with pictures or facetime checking with your GC, then you aren't leaving yourself too many options other than to drive there yourself. Which isn't too bad if you went a few times a week no? I know some people though doing BRRRR deals on the other side of the country and they have been very happy using their PM to check the work of the GC.
Maybe consider opening up to the idea of using a PM. While you will have to pay them, you will be saving yourself time, gas money, wear and tear on your car, food expenses on the road and lots of head aches. Find out if it would be cheaper to just pay a PM than to drive there and back all the time yourself. A good PM will make sure the work gets done properly and your units have the best possible return.
Paul, you've been sold a bill of goods if you believe managing this BRRRR from afar (for your first time) gives you a good chance of getting a renovation in at or under budget and properly done. Some areas of the country are worse than others. Anywhere around here, I wouldn't give a tinker's damn for your chances. If you're going to do this, you should be prepared to sleep in the driveway of the place for weeks and possibly months. And even then, I wouldn't give much for your chances if you don't have the construction knowledge to GC this yourself and vet the subs while they're working. A good 99% of people doing their first BRRRR certainly don't.
Is it possibly you'll get through this smelling like roses? Sure. But not likely, and if you intend to run a string of this you're going to need the kind of luck to pull it off successfully that only Publisher's Clearing House winners ever experience, 1.7 billion:1 odds, six times worse than your odds of winning the Powerball jackpot.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
6y
If you think driving 2.5hrs Is a headache just wait for the headaches you'll get managing that rehab from 2.5hrs away.
Alot of long distance investors in my area are usually the ones with the super run down properites. Why? Probably because there's no over sight when you self manage from afar.