All Forum Posts by: Grace Marie Weger

Thank you for your expertise, suggestions, and resources.

I will definitely look into a renovation loan the next time I don't have the 70% rule in a BRRRR

Hello!

I just bought my second home, a complete fixer upper that I plan to use the BRRR strategy on. I recently discovered that most cash-out refinance programs require that you maintain 20% equity in the home, which makes me concerned about my margins

Here are my figures:

Purchase price $380k. I was able to do the 3-2-1 buy down program so my mortgage the first year is 5% (2,300), 2nd year 6% (around $2,500) and 3rd year 7% ($2,700 monthly....if rates don't go down by then, which I assume they will). Comparable rentals are between $2,700- $3,000

Renovation is $30,000. I am a contractor and will be doing the work myself over the course of year (or longer, depending on the market) while I live in the home

The market in Bend, while slightly cooling off, is high. Comps in my area are currently around $450k. Working in the building industry, I know that supply is slowing down due to interest rates and slowed buying--which is exacerbating the underproduction issue. I wouldn't be surprised to see median housing prices reaching or exceeding 2021 levels which were $800,000.

I expect to have between $40,000 - $80,000 equity when I finish renovations, and if I can appraise at the right time. Is this margin enough for a successful BRRR?

Thanks in advance for your expertise!

Oh, and more info on my "portfolio"... I own another home that I pay $1,600/month  (2.9% mortgage rate) and bought for $317k. It is now worth over $400k but I did not refinance due to high rates. I am renting it out for $2,400/month. Maybe I should cash-out refinance that house when the rates go down? Does having that asset allow me to take out more equity in the renovated house?

Welcome Jarrette! I live in Bend and work for a non profit builder as their director of land acquisition and development. I also bought my first house last summer (such a lucky time to get in!) and am looking at purchasing another. 

I live in and rent my current home and completely cover the mortgage by doing so. I'm 29 and hadn't lived with anyone since college so it was a sacrifice that I knew I'd have to put up with for a little while. I'm ready to live on my own again and hope to purchase a house that has potential for an ADU.

The housing market here is crazy with the median house price at 778k, so I’m also looking into buying and building since that’s something I have expertise in from my work. 

Let’s stay in touch about our ventures! 

Last year I bought my first investment property and use the rental forms from Brandon Turners book "the book on rental property investing". I read through them and edited to fit my state and situation, but I overlooked that there is nothing said about breaking the lease.

I believe in Oregon the tenant is responsible for up to the full amount of rent during the signed lease period if they decide to leave early- but the landlord is required to look for a new renter and once found, the old tenant isn't responsible for paying anymore. However, without this defined in the lease I want to check that my understanding is correct.

Any advice on how to proceed?

@Jeff Wolfe Thank you! I reviewed some comps and see that most of them have large yards or covered porches. I am going to see if my HOA will allow me to build a pergola off the front porch

Good ideas I hadn't considered! Thanks for the advice! Unfortunately HOA prevents major work outside the house, but I really like the idea of making the half bath a full!

I just need 10k of upgrades, my home as already increased 100k in the past year market value.

Hello all,

I bought my first investment property last year, its a 3 bd 2 1/2bth new construction that I owner occupy with 2 roommates who cover the mortgage. I am now looking at buying another property, and don't want to wait as interest rates are projected to rise even more and not start to lower until 2024. My only barrier is my debt to income ratio looks very high since acquiring my first property. I was advised by a mortgage broker friend that if my house appraises for enough to give me 70% equity in the property, then it will not count against me. 

I bought the house for 317k and need it to appraise for around 430k. The area I live in has exploded (like most the country) and I think will probably appraise for 420k as is... What upgrades are worth investing in to raise the value of this new construction home?

I have started replacing light fixtures, plumbing fixtures, I added nice cabinet pulls, I redid the guest half bath with wainscoting, replaced the master closet door with a custom barn door, installed wooden sills on windows

I am considering adding a built in closet system in the master ( right now it is cheap wire shelves with a metal dowel and thats it), I'd like to replace the vanity top in the master bath (currently its just a laminate, would like to do solid material), I would like to replace bathrooms and laundry room flooring with LVP (currently linoleum), and I've been considering adding a tile backsplash in the master. 

I can do all these renovations myself so the only cost is materials, but I don't have time to do them all. What do you think will give me the best bang for my buck?

Good for you!  I read “the book on rental property investing” and it had information on how to access rental documents. I highly recommend reading (or listening, it’s on audible) to this book before jumping in. Best of luck! Keep us updated on how it goes!

UPDATE: sorry it took so long!

I ended up purchasing a townhome in July 2021, it is 3bed, 2 1/2 bath and I have two roommates who completely cover the mortgage. They are both my age and know that I am the landlord, it has been a very easy living situation. I used the rental agreement from one of Brandon Turner's books and spent a lot of time screening applicants and meeting with them to ensure it was a good match. I have gained 100k in equity in a year without having paid anything since my down payment- which was only 3%