All Forum Posts by: Kuba F.

@Lindsey R. You don't mention if your strategy is to fix and flip or buy and hold, and whether the investment area is out-of-state or just in neighborhoods in Los Angeles (being from Los Angeles, I know that areas can be three hours across!) 

I'd definitely join a real estate investment club in the market you are looking to invest in. Even if it's long-distance, they will have forums and online resources where you can get a good overview of different areas the way investors see them.

I echo the statements of others in saying that you should look at comps in getting a feel for what areas are valued at, however I can also see your conundrum in that you need a birds-eye view to start and then narrow down areas.

My biggest suggestion would be to look at the Redfin blog and then Data Center on Redfin. It supplies a wealth of information on a housing market data for a city or even a zip code. For an overview of information on market trends, crime, etc, you can try Trulia local scoop section.

For comps, if you don't have access to a realtor who can pull them for you, I always recommend Redfin if it's available in that area, as it is a brokerage with direct access to the MLS and so data is updated every 15 minutes or so. I often combine Redfin with Zillow comps because between the two of them you get a pretty well-rounded picture of the property data.

I wrote a BiggerPockets blog post on how to find comps and calculate ARV that you might find useful: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

Feel free to reach out if I can help with anything else.

@Tom Saccente This is in reply to your update. Unfortunately, deals to be found on the MLS are getting slimmer by the day. Here in my neck of the woods, conventional homeowners are bidding or offering very high on ugly properties just to finally get into the neighborhood they want to be in. This makes it very hard to find deals with any kind of spread.

If you really want to find properties with margin, you need to be looking -off- market. There are a lot of ways to do this, and I've listed many of them in a few biggerpockets blog posts. These methods and techniques are not just for wholesalers, (and I include wholesalers as one of the ways to get deals sent to your inbox) they apply to anyone who wants to find discounted property. It's not as easy as getting a daily list from a realtor, and it requires reaching out to people, but it's likely you'll find the benefits outweigh the discomfort. 

The biggest difference between getting properties from a realtor (and he or she IS an investor-friendly agent?) and finding them yourself is that the realtor presumably runs a CMA for you using comps, whereas if you find your own properties you will need to learn how to run comps and get ARV yourself to know if they are worth your time and money.

Here are some posts that you might find handy:

https://www.biggerpockets.com/blogs/8814/72016-55-resources-to-find-real-estate-deals-online

https://www.biggerpockets.com/blogs/8814/71506-27-ways-to-find-off-market-and-wholesale-real-estate-deals-offline

Best of luck and feel free to reach out if I can help with anything.

Hi @William Carr -- there are many choices -- what are you specifically trying to accomplish with the software as a wholesaler, today?

As far as which are best, there are tiers of software based on price, quality, and available features, but truly the best real estate software will be one that is tailored to your business, and that you'll actually use.

Hi @Austin Mueller, Redfin is a great start for finding comps, since they are a broker with direct access to the MLS.

As far as methods, I wrote a BiggerPockets blog post on how to find comps and calculate ARV that you might find helpful: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

Adjusting the comps is a really important facet of calculating ARV that is often overlooked, and the post shows how to do this. Essentially, every feature, such as bedrooms, bathrooms, or garages, should be assigned a dollar amount and the comps adjusted up or down to reflect the subject property. This adjustment will give you a much more accurate ARV as a difference in features, such as garages, could amount to tens of thousands of dollars.

Happy investing and feel free to message me if you'd like specifics on tools that may come in handy.

@Michael Wilson Welcome to BP! You are definitely in the right place, and your analysis paralysis should ease as you get more comfortable with analyzing potential BRRRR deals.

One of the aspects of purchasing that is most anxiety-inducing for investors is in doing a CMA and figuring out the After Repair Value of the property. Most properties need some type of updating, even if just cosmetic updates to entice renters, so you need to know what other properties that are similar are selling and renting for rehabbed, and that requires comps analysis and adjustments. Adjustments are dollar amounts assigned to features -- for example, if similar properties have parking spaces or garages, and yours does not, could throw your ARV off by thousands of dollars.

I wrote a Biggerpockets blog post on how to analyze comps and calculate ARV here if you'd like to check it out: https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value

Happy investing and feel free to reach out if I can help in any way.

Hi @Michele G.

Here's a BP blog post I recently published on how to estimate some common rehab costs:

https://www.biggerpockets.com/blogs/8814/72452-how...

When I walk through a property, I use this punchlist to ensure that most of the items are accounted for:

https://www.biggerpockets.com/files/user/kubaf/fil...

When you're walking through the property make sure that you record the whole thing top to bottom on your camera phone so that you can re-watch it over and over again while you come up with a scope of work.

As to your deal numbers, I like that you have a large contingency if this is your first flip.  You don't know what you don't know and that usually results in extra costs.

Generally you should stay away from gut rehabs on your first try as they will cost way more than normal due to poor planning, risk mitigation, and extended timelines.

Your selling costs are indeed low.

Hi Everyone,

My name is Kuba and I run my real estate investment software company, REIkit.com, out of Los Angeles. REIkit was born when I made some serious mistakes while flipping houses and wanted to find THE magic formula for how to make sure it didn't happen again. Through building REIkit and doing more flips, I finally figured out that there is no magic formula to be found. The only thing we can do is educate ourselves as much as possible and try to account for every single risk and cost we can think of before jumping into a new project.

That's what I had in mind when I built out all the tools for REIkit. With each tool I build, I ask myself: "Does this tool help my customers prevent the mistakes I made back then? Does this tool help my customers succeed?"

The comps adjustment tool is particularly close to my heart, because I lost over $10,000 on my first flip by not accounting for features and amenities of my comps (such as garages and pools) when I did my initial deal analysis. This tool is free for everyone to use and will improve your estimated ARV in under an hour. Is an hour of your time worth $10,000?

I'll leave you with the link to the free comps adjustment tool if you want to try it out:

https://tools.reikit.com/comps

Comment below if you have any questions or chat on the site to let me know how it worked out for you.

Cheers!

Kuba

It doesn't necessarily not work, but you do have more pressure on your margins due to more people being involved making it that much more important to buy at a serious discount, and that is going to be your biggest challenge.  If you figure out finding off-market distressed properties remotely, then the rest is about effective delegation and all of the project management fundamentals (risk, scope, budget, communication, etc).

@Ryan Breen that's a great accomplishment, very exciting! 

As far as needing to know the items and costs for the rehab, costs vary across the country on a material and labor level, but for just a high level overview of costs you could look at averages. This will at the very least allow you to see if the deal is still worth pursuing, before you start really breaking those costs down in a detailed estimate.

If you'd like a primer on what systems and items to look out for and an approximate range of how much they cost, you can check out this BiggerPockets blog: https://www.biggerpockets.com/blogs/8814/72452-how-to-estimate-construction-costs-for-these-29-common-rehab-projects

Happy investing, and feel free to reach out if there is anything I can help with.

@Justin Torres, Welcome to BP! You are definitely in the right place, and you are right that there are many avenues for your money -- fix and flips, BRRRR, buy and holds, and house hacking. Each has pros and cons that you will be able to read about in the forums.

One great way to get a handle on which of the above investments is working well in your area is to join the meetups and investment clubs where you'd like to invest. There is a good BiggerPockets list of investment clubs here: https://www.biggerpockets.com/rei/real-estate-clubs/

Happy investing and feel free to reach out if I can help with anything.