All Forum Posts by: Kenneth Garrett

@Bob Stevens

Hi Bob, sorry to hear about your situation. Condemnation only means the house is unfit for occupancy. It doesn’t mean anything more than that. I disagree the city only cares about revenue. It is there obligation to ensure the unit’s are compliant with building codes. Fees are just a means to get compliance.

During due diligence, I always fill out a FOIA request (Freedom of Information Act) through the city. I ask for any code violations on the property, history of permits, outstanding permits, outstanding water bills, zoning district and compliance and litigation that might be ongoing. The information is free and takes about a week to receive the information or less. That would have avoided this unfortunate situation.

Contact the city and work with them on what needs to be done. I think it’s unnecessary to move tenants out for them to inspect. This is going to be sensitive with the city. Just because a property is condemned does not mean it’s recorded. A title search will not necessary reveal this.

You may need to hire an attorney if it becomes ugly with the city. I was a building and zoning official for over 30 years feel free to dm me.

@Gurjot Grewal

The higher you can force equity up the better the deal. I've done many BRRRR projects unfortunately they require new kitchens, new bathrooms and at time I can add a bedroom. I like to find 2 bedroom SFH that have enough square footage to remodel to create a 3rd bedroom. Those are $20K to $50K rehabs almost flip style.

As far as getting them to cash flow it’s market dependent. I’ve bought a lot of foreclosures. They are in pretty rough shape usually but once in a while I get a small remodel and it works out great. The more rehab the project takes, the less capex and maintenance I have to calculate. Don’t just throw a random percent at each analysis really analyze per deal. You will probably start to see more deals become reality.

When I first started I was way to conservative with my numbers and could never find a deal that worked. I got better at rehab numbers, ARV and the rental market. I will say refinance rates are high now so it does create a challenge, but you can still find deals.

@Juan Vargas

Hi Juan,

I've completed many BRRRR projects. Feel free to reach out to me.

@Ricardo Hidalgo

Nice job Ricardo.

I moved to Florida a few months ago. I own a STR in Miramar Beach and few properties back in Illinois. I live down the street from Fort Walton Beach. Looking to connect with you or any other investors in the area.

@Christopher Dru

It's difficult to find an investment property off of the mls at this time. I believe in looking for fixer uppers by using the BRRRR method. When you force appreciation it reduces your cash outlay and you can use that same cash for the next one.

I've had great success contacting local banks in my area and inquiring about properties they have foreclosed. Banks seem to just sit on these properties until they must sell them. I was able to acquire many properties this way and either flip or BRRRR them.

This is where private lending comes in hand. I met many private lenders at local REIA groups and built relationships which helped build my portfolio.

In my opinion, I would not buy at negative cash flow. That is not a good investment. Things are not going up in value, they are actually going down or will be stagnate for a while.

As some others have said wait for the right property that will have positive cash flow. It’s not but a bad property that will only cause pain, frustration and regret.

@Dave Overall

I would say if you had a BRRRR investment by the time you refinance out, you essentially have a no down payment investment.

@Patrick Britton

I self manage all my properties and have done so for the past 10 years.  I had a bought a property a few years ago that had a pm in place.  They were awful and fired them 6 months in.  I won’t say all managers are bad, but I don’t think self managing takes that much time.  No one will manage my property as well as me, it’s mine.

@Jessica Lamont

I think it depends on your situation and of course the numbers. At $160,000 mortgage at 8% at 30 years you are at $1174 add in taxes, insurance, maintenance, capex, pm it will probably cash flow 300-400. I had to assume cost. Flipping it at the same number and being conservative and adding closing cost of 8%, puts you around 12,000. Profit is $38,000. That's pretty good. If your going to BRRRR or flip it your rehab numbers are going to be different, which will effect your numbers. I have not included holding cost of any kind. Either way works. If you need cash flip it, if your in for the long haul and your cash flow is 400-500 I would hold it. The revenue from holding will almost exceed flipping the only difference is if you need the money now.

@Brad Whit

I would turn the project into a BRRRR at this time. No profit is not an option for me. Refinance it, put a good quality renter in it and if you decide to flip it later you'll be way ahead by enjoying the cash flow. I self managed my properties while working full time to increase my cash flow. Remember in the long term rentals produce higher profits then flips do it just takes more time.