All Forum Posts by: Graham Northrup

@Ryan Shannon long story short, we bought in late May, started the rehab in July/August, finishing up early September. Finally rented out in late October, and just got the refi today. Longer than we wanted due to contractor issues. If everything went smoothly we could have tightened it all up to about 4 months

@Kyle Keegan we underestimated the cost of labor, and our contractor was working on a per task basis, rather than under one overall contract (our mistake!) And I think he was able to pad his expenses quite a bit that way. Lesson learned.

Thanks @Will Fraser ! That's the plan. I have a couple more rehabs in the pipeline, one that I know will go fairly well, and another that is kind of sketchy. Will report on those as they wrap up.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000
Cash invested: $20,000

HUD auction, 5/2 SFR. Updated with paint throughout, tile in kitchen/baths, painted kitchen cabinets, repaired rotting deck, new roof and repaired carport, new fence

What made you interested in investing in this type of deal?

The numbers looked good, and it seemed like a fairly light rehab.

How did you find this deal and how did you negotiate it?

It was a HUD auction, and we were the high bid

How did you finance this deal?

Cash from our own sources, as well as a private money loan.

How did you add value to the deal?

We spruced it up with new paint, replaced cracked linoleum in kitchen with tile, repaired rotted carport roof and replaced whole house roof, repaired deck, replaced corroded water heater, painted kitchen cabinets, repaired faulty appliances, and a few other smaller things

What was the outcome?

House looks great, got it rented to a nice family at our planned-for rate. It appraised for 130k, which is the number we calculated on, but of course were hoping for 140-150k.
Unfortunately, our rehab expenses were significantly more than we planned for. Budgeted for around 30, ended up being 42, which made us leave about 20k in the property at refinance. Took out 104k to pay back lender and reinvest in future properties.

Lessons learned? Challenges?

We needed to keep a close eye on our contractor, because the expenses seemed to explode, cutting into our ROI.

All told, we are getting a moderate return, have a nice asset, and a lot of experience gained!

Greetings BP community!

I've searched the forums but haven't found an adequate answer. Any help appreciated: How to best account for Private Money in the BP BRRRR calculator. Technically you are making the purchase in cash, but the cash comes from a lending source. How to account for amortization, etc.

Thoughts? What has worked well for you to get accurate numbers on the final doc?

Thanks!

Hi Teresa! Did you ever find an adequate answer to this question?

Thanks,

Graham

Just curious - what part of town are you in that can get $950/mo for a one bedroom? I haven't seen a lot of those in my travels...

@Justin Haberman Hey there! We've been looking in Pueblo for a few months. We're finding a number of full gut rehabs, as well as market-priced properties, but not a lot in between. The rehabs also tend to be in low rent areas, so have to be careful with the numbers to avoid overspending. Looking to purchase soon, but have yet to find something that is a "home run" as it were.

@Wayne Brooks Thanks Wayne. My investing partners insisted on an LLC... :)

@Kenneth Garrett Thanks for that. Helpful. In the case of commercial terms, the deal has to be even better I guess, huh?

@James Wise Thanks James. Had not been able to piece that together from the info available. And to @Phillip Davis' point, what is the point of having an LLC if you can't keep your assets it? I have heard of people transferring property into an LLC, as well as putting it in a Land Trust, but can't find any "how to's" or specific rationale. Do you or anyone have insight? Or a blog post that might be helpful?

Thanks!