All Forum Posts by: Amir Khan

Trying to understand this...you had this under contract for $850K and assigned it for $860K, but put up $8K non-refundable earnest money? So your profit was $2K. How did you earn $17K marketing fee and who paid for that?

@Jassiem Robinson excellent feedback from Andrew Postell above. I may add; is the duplex currently producing income? How much are the rents? Your whole BRRRR strategy depends on rather good estimate on ARV. Have you consulted local realtors on how much this property would be worth when updated? Also, one good measure of what 'updated' properties are selling for within the subdivision is by looking at listed property's interior pictures. Look at average per sq. ft. price of those homes compared to not updated homes...

@Katherine Roberts great answers above to consider. Another thing is if you are confident about your analysis/underwriting, then put in your offer. There is a direct relationship between how many offers you put and how many deals you end up closing. The process alone will help you get better.

In your offer, briefly explain why you are offering that price to the broker. Sometimes, there might be additional details and/or market data that the broker may be able to provide that may change your analysis. 

Finally, you never know whether the seller is willing consider your offer until you try. You don't know their situation (I once bought a property at well below market price and found out that the seller was going through bankruptcy process and court had required him to consider all offers).

Quote from @Daniel Tanasa:

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $161,000

I bought this property out of the MLS. It's been sitting on market for over 80 days. Was listed for 240k but it needed a bit of cleaning and touch ups for the messy rehab that was done. I negotiated it down to 161k cash. Closed with hard money. Cleaned and painted it for 5k. ARV came back at 255k, I refinanced and pulled all my money out. Is rented for 1800 and is just breaking even. But I got 75k in equity in the deal for 0$ out of pocket. So I still count it as a great deal.

Congratulations! Yes well done. When you enter commercial REI, it gets even better. You control the improvements in NOI and therefore control the value of the property. You can BRRRR the same property many times...

Interesting discussion. Cap rates vary across the country and across asset classes. For example, you can still find 9%+ cap rate stabilized Class-C properties requiring heavy value-add. I am in Texas, and yes I am aware the average cap rates for commercial multifamily in major metropolitan Texan cities (DFW/Austin/San Antonio/Houston) is about 4.2%. However, there are tertiary markets, where there is a lot of inventory in smaller units (6 - 20 units), which are older and offer value-add opportunity. So I have seen BRRRR investors go into these deals, update these properties, improve NOI, put them back on the market at 5-7% compressed cap rates. And yes, they are sold to another type of investors (perhaps turn-key solution seekers/passive income seekers) who come in and buy these assets.

Elena, I currently own an out-of-town apartment complex. The most important hire for me was the property manager. Your situation may be different and this may not seem important, but for me to have a reliable, trust worthy PM has been crucial. In addition, I have a local bank, real estate agents and handymen in my team.

DFW offers so much opportunity. I started in buying/flipping SFHs in Ft. Worth years ago. There is still such opportunities available in DFW area today if that is what you want to do. For rentals, the cap rates are very low (2022 average cap rate in DFW area was around 4.3% in multifamily)...

This is a great question! So here are few tips:

1. Know that whichever market you choose, it will be almost impossible to check ALL the boxes.

2. Decide on 4-5 major criteria that are important to you when investing in your first REI project. For example, only buy in a market where there is job growth etc.

3. Based on these criteria, decide on one REI strategy (ex; flips, wholesale, BRRRR).

4. Then scan BP forum for favorite cities where BP investors are investing based on this strategy. Short list 5 cities.

5. Then reach out to BP investors in these 5 cities and see if they'll connect you with their local contacts (agents/brokers/contractors etc).

6. From these 5 cities - choose 1 and then fly/drive in and meet/create your team.

7. Now begin researching properties in this city (with the assistance of your team). Your team will help you focus on specific parts of city that will be more profitable for your REI strategy.

Hope that helps. DM me if you have question or want to chat..

@Raj Shah another suggestion (if you like/trust the tenants), is to offer them to lease-purchase the house from you.

1: Why is this method so difficult and unreliable now?

I deal with commercial multifamily, so while higher interest rates are a factor, you can make it work as long as you do the numbers right. I say that because unlike residential REI, commercial multifamily values are derived from increased NOI. And in the commercial multifamily realm, you can create forced value appreciation based on improved NOI.

2: What methods of investing are you using instead of the BRRRR method?

Still using BRRRR..