All Forum Posts by: Kuba F.

Welcome @Kristen Olson!

A couple of statements leapt out to me in your post. The first that the owner's agent/friend is giving you advice on repairs. His loyalty is to the owner, not to you. It doesn't matter how experienced he is -- giving you a low estimate for repairs means your purchase offer will higher because you will not have accounted for everything needed for a rehab.

As already mentioned by the others, Zillow Zestimate is usually inaccurate. I don't rely on anything or anyone to tell me what a property is worth; it's not their money on the line. I highly recommend you learn how to find comps and calculate ARV yourself eventually. It gives you a very good idea of the competition in the neighborhood, how they compare to your property, the level of repairs/types of finishes you need to bring a property up to rental standards, and how much rent similar properties are bringing in.

Speaking of bringing up to standards, if you are going for a BRRRR and not flipping a property then it doesn't need the level of finishes that a retail buyer would demand. That should reduce your rehab costs somewhat.

One last thing I want to mention is that duplex means everything comes in two's. That means twice the rehab. It means two furnaces, two ac units, etc. Everything eventually breaks, and you need to account for the ages of the fixtures and appliances and try to map out how much life they have left and how much you'll need to hold back in reserves to get those fixed when they do finally break.

I wrote a few Biggerpockets blog posts that may be helpful:

First, since your post was aiming for this, how to estimate repairs and some cost guidelines for those repairs:

https://www.biggerpockets.com/blogs/8814/72452-how-to-estimate-construction-costs-for-these-29-common-rehab-projects

This on how to find comps and calculate ARV:

https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

And finally, this one on the 18 key metrics for analyzing an income producing property, such as at a minimum cash flow:

https://www.biggerpockets.com/blogs/8814/73755-18-essential-metrics-to-a-complete-real-estate-investment-analysis

Feel free to reach out if I can help or expand on anything.

@Matt Schuberg - appreciate the reply! These methods are definitely doable for a lot of people, both experienced and those just getting started out. Always something new for the marketing toolbox. Thanks again!

Hi Everyone,

This is Kuba Fietkiewicz, founder of online real estate investment software REIkit.com. Glad to be a part of this amazing community here on Biggerpockets. Today I wanted to talk about a popular real estate saying: "You make your money when you buy."

What does it mean to "make your money when you buy?" In a nutshell, it means that your profit potential is determined by the amount of due diligence you perform on a property, and how accurate your numbers are.

While most real estate investors are familiar with the work of running comps and averaging them to get to an After Repair Value, not as many are aware that they should be including an additional step in the process.

This extra step, which usually takes less than an hour, is in adjusting the comps you've found for differences in features, such as garages and pools. If all of your comps have a garage, and your subject property does not, that's going to be a 10-20k hit to your wallet when it comes time to sell. The time to find this out is before you buy, not after the rehab. That's what is meant by "you make your money when you buy," and that's why it's so important to adjust your comps.

I built out a Comps Adjustment tool within the free ARV Calculator on REIkit.com because this step is so crucial to your success. It's easy to use, and it's thorough, being based on the Uniform Appraisal Report that nearly all appraisers use.

I encourage you to check this tool out and take just 30 minutes from your day to evaluate your latest potential property, and to get to a more accurate ARV:

https://tools.reikit.com/comps

If you have any questions or suggestions about the tool, chat with me on the site, or you can leave a comment below.

Cheers!

Kuba

Hi Everyone,

Kuba Fietkiewicz here, founder of REIkit.com real estate investment software, based out of Los Angeles.

Real estate investors today know that finding deals is not as easy as it was just a few years ago. Properties on the MLS are going for tens and sometimes hundreds of thousands of dollars over asking. This makes finding a deal on the MLS very difficult, although there are still deals to be had if you can find a property that is hugely undervalued.

The alternative to the MLS is to think outside of the box, and utilize every single method, strategy, and website that can possibly net a deal. Such sources of deals can be as well-known as putting out 'We Buy Houses' signs on every street corner. Not so obvious methods would be looking at property seized by the IRS or other government real property surplus sites.

That's just one example of how to find wholesale and off-market deals online. For the other 54 methods, check out this post: 55 Resources to Find Real Estate Deals Online

Let me know if I missed any online techniques in the comments below.

Cheers!

Kuba

@Brandon S. 

You might find this BiggerPockets post I wrote to be helpful in analyzing an income property. It not only explains what each metric in a complete analysis is but also what the formulas are (for example, NOI) and how they all work together: https://www.biggerpockets.com/blogs/8814/73755-18-essential-metrics-to-a-complete-real-estate-investment-analysis

Reach out if I can help with anything and best of luck.

@Jewell Ford and Angela, Welcome to BP!

Yes, wholesaling can be a great way to get started. The way to go about it is to create win-win-win situations, and to listen carefully to your motivated sellers to eke out why they are selling and what their sticking points are. As Gareth said, learning how to run the numbers accurately is also of utmost importance, especially when it comes to marketing the property to your buyers -- they will not go for the deal if the spread is not wide enough.

I wrote a few biggerpockets posts on how to run comps, estimate rehab costs, and find motivated sellers and off-market properties, they are all here: https://www.biggerpockets.com/blogs/8814-investing-with-rei-kit

I feel that the most important information is how to run comps, as without that you are at the mercy of what the seller says their house is worth and have no baseline for where to start negotiations: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

You should start creating a buyers list right away, as getting a property under contract and running out of time to find a buyer is a real possibility.

@Charlie Clough Welcome to BP! 

With a background in sales you'd be a great fit for finding properties off-market, talking to motivated sellers, and the like. I wrote a few Biggerpockets blog posts on finding off-market properties online, offline and by building relationships here. The same techniques work for multifamily as for SFR: https://www.biggerpockets.com/blogs/8814-investing-with-rei-kit

I also wrote a post on how to evaluate a residential multifamily that goes quite in-depth and might be useful right now: https://www.biggerpockets.com/blogs/8814/73755-18-essential-metrics-to-a-complete-real-estate-investment-analysis 

Best of luck!

@Scott Thorne I definitely get that. Unfortunately, there is really no best and quickest; it's all going to take time, a lot of reading and some understanding of basic repair. This is how you ensure that you get what you pay for when it comes to contractors, that you're not getting gouged on bids, and that the work in the scope of work is actually being performed. 

One thing I do when I'm looking for properties is take a video with my iphone when walking a property and note everything verbally that could be wrong, and then go over it many times when I get back to the office.

I wrote a BiggerPockets post that may be helpful: https://www.biggerpockets.com/blogs/8814/72452-how-to-estimate-construction-costs-for-these-29-common-rehab-projects

@Ann Binstock Check out an article I wrote on BiggerPockets to evaluate a multifamily or apartment: https://www.biggerpockets.com/blogs/8814/73755-18-essential-metrics-to-a-complete-real-estate-investment-analysis

There are software that can calculate IRR and NPV.

Welcome to BP, @Vanrith You!

I'm also in L.A. Used to flip in Saint Louis, but reined it in to try my hand at investing locally. The process was the same for me whether St. Louis or L.A.:

Education, finding a realtor to be "everything," finding wholesalers for deals, vetting contractors, the whole process. My realtor was fantastic. She'd go to any property and walk it for me with me with an iphone and me on the line. I'd record the video call and then look at it over and over to get a feel for repair costs and condition.

By the sounds of it you are looking to find rental opportunities?