All Forum Posts by: Chris Carollo

Remember the old adage of trust but verify?  I'd taken it even a step further, be suspicious, take a look, due your diligence, verify then trust. 

Looks at the financials of as many properties you can. The more deals you review the better you'll be able to see if something looks off.

@Michael Prim Welcome from one Western Springs Resident to another! I've got a fair bit experience in the neighborhoods you called out. Happy to review the deal for you if you want another set of eyes on it. Feel free to post more concrete details here or PM if you want. 

There is also a MeetUp that @Account Closed hosts semi regularly in Downers Grove that might be beneficial as well. 

What about removing the wall tile and installing Beadboard or Shiplap siding over the (probably) damaged drywall? I've done it a couple times with good results. Its also pretty quick and cheap.

This might be some helpful data for you..  Take a look. Hint: Rents never really dropped even as home values did a few years ago.

https://www.apartmentlist.com/rentonomics/rent-gro...

I've done 5 kitchens with Ikea Cabinets over the years and couldn't be more impressed. I actually was able to recycle a whole kitchen by disassembling it and installing into a new project I was working on.  The other positive is that I needed to replace a couple kitchen doors after a tenant let their kids draw on the white cabinets with a purple market and all I needed to do was to head down to Ikea and grab a couple new doors to pop on. Plan on 30+ minutes to assemble each cabinet if you are assembling them yourself. 

Quick thoughts...

Have you factored in costs to turn over almost daily? Someone has to change the sheets, clean, etc each time(I hope). 

Does the building allow it? If the HOA bans short term rentals do the numbers still makes sense as an annual rental?

If Seattle does regulate and charge taxes, do the numbers still work?

It sounds like this place isn't turnkey nor rental ready. Any tenant is going to bring up the same concerns, especially the AC and Microwave. 

If you're buying turnkey than I would it expect it to all be done. 

You could check Redfin.com for closed properties in the area that match your criteria.

@Malcolm Darensbourg , Sorry, I didn't mean to confuse you. The intent of BRRR is to create a value that is more than the sum of the parts, in this case the Purchase Price and Rehab cost. The intent is to create at a minimum of 25% more value than what the Purchase Price and Rehab cost, allowing you to pull most, if not all, the money you invested. The 75% LTV from this allows you to pull your money out.

In my example above the total cost was $150k(Purchase + Rehab/Carry Cost) so if I was spending this much for a BRRR deal I would want to make sure that it would appraise out at $205k, roughly 75% LTV

When looking at property I would look at a formula like this:

Purchase Price (A) + Rehab AND Carry Costs(B) = Post Rehab Value(C) x 75%

Example:

House Price(100k) + Rehab/Carry Cost(50k) = Total Cost 150k

Minimum Post Rehab Value= $205k x .75= $154K Allowing for a little wiggle room. 

Now if you are trying to identify which properties might fit.. Take a look at closed transactions, I love redfin to see a map view of all properties that have sold. You can filter to all 3 bed/2 bath for example, to see what they are closing for. You can then see that comparable houses are listed for OR if you can convert a 2 bed/1 bath to  a 3/2 or take a half bath to a full.

I also look at Zillow regularly to map out rentals in a market to get a sense of what the competition is.