All Forum Posts by: Account Closed

These are the two BRRRRs we executed a month ago.

I have attached screen-shots of the BRRRR analyzer we use in our due diligence below. If anyone is planning to BRRRR and have questions about the process, I will be happy to share what I know and have learned.

Although, @Ashish Acharya and I am still looking to do more BRRRRs, we are focusing more on analyzing/underwriting small apartment complexes (Purchase Price <$1.2M) right now and plan to purchase one within next 6 months. Looking for partners and investors to buy the first apartment with us. Let's connect. 

PROPERTY SUMMARY

DUE DILIGENCE

CASH CLOSE

REHAB PRIOR TO APPRAISAL

MORTGAGE

Pictures of the properties: 

BRRRR Analyzer we use: (2 of 9 tabs) 

Have to looked at westview, Atlanta ? 

@Rebecca Cardona, I have 3 units side by side and the one thing I dislike the most is if one of the residents is dirty and attracts rodents or bugs, it impact all units. So, you might have the cleanliest resident but if neighbors are not then their problems become yours. 

Sometimes regardless of the cleanliness,  rodents/squirrels move into (attic/walls) one of the units and the wildlife control will need to treat all adjacent for a complete treatment.

@MK Boatswain, Atlanta has an investor meetup every last Wednesday of the month at The IVY Buckhead at 7pm.  

@Erron Fayson, First, congratulations ! Here are my few observations: 

1. Why is your cash closing cost so much?  I have never paid more than $700-$1500.   

2. Your refinance closing cost will be way more than $1500. You can include all of your cash-out refinance cost (and prepaid) in your mortgage (If ARV supports). Talk to your lender.

3. Make sure your rehab estimates include 5%-10% overage given this is your first project.

4. Interest rate of 5% is very good for an investment property. Is this just an estimate? 

5. Have you considered reserves/expenses for: vacancy and credit losses, turnover cost, Pest control, landscaping ? 

@Kyle Grimm, Congratulations !  

1. I didn't see the built year but $100 cap-ex and repairs seems little low for 4 units  ( Remember that there will be 4 furnace, water-heater, ACs toilets, kitchens, and so on) . 

2. Don't  you need lawn-care? And pest (termite) control if you are planning to hold this for a long term? 

3. Closing cost is definitely low. Ask you mortgage broker to send you a preliminary closing sheet. It should be around $4000- $5000 in my opinion. Talk to the seller so you can finance the closing cost: increase the offer price and the seller will pay the closing cost. 

I hate that you have to put down that much but I think it is still a decent deal if the rent will go up at the national avg rate and such properties are hard to come by. 

Good luck. 

@Brandon Blue. Congratulations for finding something like this. I started with something similar. Few things I noted: 

1. Pest control/Termites control cost 

2. Lawn-care/snow-removal/Gutter cleaning cost 

3. 4 months of vacancy is not normal (should reassess your rent/tenant pool expectation if you have that long vacancy)

4. Insurance seems low considering it is a new house (Replacement Cost will be higher than your purchase price). I pay around $170/month for a good coverage for a Triplex. Your market might be different but get a quote for an agent. 

5. Agreed that the cap ex reserve is not crucial for next few years. However, if I were you, I would set 1-2% aside
 just for the sake of building some reserves. When you will start looking for another property, you will be asked to show reserves (2% (6% if you have more than 4 properties) of Unpaid Principal Balance) for all financed properties. 

I think it will be a good purchase given you will be house-hacking, making mistakes, and learning. All the best ! 

@Julie Desautels, Things I noted:

1. Paying $3,000 closing cost for $20K property does not make sense. Do you already have the lender lined up? I ask because alot of them have a minimum loan amount. 

2.  Taxes and insurance seem high. 

3.  Pest and Lawn Care Expense? 

4.  Even though Cap Ex % of 15% seems high, the dollar amount of $90 is low considering the age, condition and likely upcoming capital expenditures. You might be overstating your income right now with la ow cap ex reserve. 

@Robin C., send me your email. I will share what we use. 

@Frantz Joseph, congrats. I own a triplex in the same subdivision.