All Forum Posts by: Kristin Feerst

Best ROI is in kitchen and bathrooms. Also, if you can add in extra bedrooms or bathrooms as part of the reno process that will boost ARV and rent rate.

I've personally never used auction.com, but I've heard bad things.  Even if you win a bid it could take months to actually get the property and you could be bidding against a computer.  

I don't know, but I've been told to stay away...maybe others have different experience they can share

A hard money loan is better than using a credit card. Carrying large balances on a credit card will hurt your credit score and could affect your ability to refinance. So even with 0% APR if your utilization rate is high your credit score will take a beating.

Time from closing to rent depends on extent of renovations, how quickly your GC can start and how many jobs they have going on (i.e. is there stoppage of work at your job due to other jobs they are doing), and timing for permits and inspections.  For a major project easily 3-4 months.  Minor jobs maybe 6 weeks. 

Even with a HML you do need to have savings for a down payment, closing costs, insurance and some of estimated rehab cost, at least enough to get to first draw, plus contingency.

Probably best to save more prior to starting something.  I would not use credit cards unless I knew I had the funds to pay them off right away. 

As long as its cash flowing and you can weather the storm then equity doesn't matter.  That said, here's some things to think about (i.e. what keeps me up at night)...

In downturns people lose jobs, that could mean increased vacancies or below market rents to keep the property occupied.  Is your market more recession proof than others?  Do you have a good cash flow cushion?  Are you financially able to weather out a couple years at break even or negative cash flow?

On the flip side a downturn it could mean more renters and less buyers.

What is the HUD fair market value for rent of your sized property? If you can cash flow at the HUD FMR you can explore the option to go section 8 during a downturn and Bernie will pay the bill! Look it up.

https://www.huduser.gov/portal/datasets/fmr.html

Usually they are cash purchases, but you can use private or hard money to lend on the cash buy plus the rehab costs.

You will still need your own cash to pay the down payment, closing costs, insurance and to front the construction costs before draws.  The construction loan is a reimbursement loan.

BRRRR is cash intensive and make sure you have contingency and a back up plan so you don't lose the property if construction costs go way over budget.

I just started my first BRRRR and have a decent amount of cash saved, but I am still anxious because its a lot of capital to front.

I wouldn't get into it without cash to cover the down payment + closing costs + 1/2 rehab costs + holding costs  + 15% contingency

For first one I'd ensure your DTI will allow for a refi on the second home. I find that the specialty products and local lenders deal only with experienced investors in many cases.

I''m not entirely sure if this is applicable because I just acquired my first BRRRR in my own name, but we have a builder's risk policy covering the cost of the property and rehab as well as general liability. Our insurer will convert our builder's risk policy to a landlord policy once the rehab is done. We are also putting this policy plus our homeowner's and auto under an umbrella policy.

I did have to change insurance companies as our insurer for home and auto didn't deal in commercial policies.  I got a recommendation from another investor in our area on a great agent that deals with these types of coverage. 

Hope that helps. 

Hi Everyone,

I am getting to close on my first BRRRR project next week and it will be a full gut rehab of the property. The area is "up and coming", but still has a long way up to go. I definitely want to secure the property and ideally would have some sort of alarm system in place during the construction phase. During demo I'm obviously not as concerned, and until there are windows there isn't much point....

...but once we have windows and a roof and start putting in new materials I feel there is a real risk of a break in since it will be obvious from the construction dumpster in front what's going on, that and the new windows :-)

What does everyone recommend for security systems?  I've heard Simplisafe is good, but what do I do prior to having electrical in the house?  Can Simplisafe or another system run off battery?  What about need for wifi?  We obviously wont have that till late in the project. 

Thanks in advance for the help!

Cheers, 

Kristin

Thanks everyone! I'm happy to answer any questions on my investor journey so far.  I am sure I will learn a lot in these next few months as we embark on our first project. 

@Nathan M. @Jason Sinclair So far my advice is three-fold;

1. learn as much as you can but focus in on a single strategy so you don't get distracted

2. Start to build a team asap which begins with networking and getting recommendations.  I love this forum and the investHER facebook group, also local philly meetups are great

3. Don't get stuck in analysis paralysis or endless pursuit of the "perfect" deal

@Kevin M. I'd love to pick your brain regarding managing and marketing of student rental properties as that seems to be the niche we've settled into.  I'd gladly buy you a coffee or a beer in exchange for any insight!  Shoot me a PM if you're open to meet. 

Cheers, 

Kristin

Welcome Rob!  Newbie from Merchantville, NJ here.  Good luck, sounds like you have a nice road map for success.