All Forum Posts by: Luke Stewart

I couldn't agree more, a BRRR this size wasn't my number one choice for this. But there is a property where the numbers are really appealing, so I am doing my due diligence and preparing so I can make the right decision. That being said I am just trying to figure out the things I should know before talking to a contractor.

I do have a realtor who can definitely connect me with someone. I know they cant give an estimate until they see it, great advice having them come with on inspection. I just want to come into the conversation with the right info to ask. Ill get that book today. I do not know 100% it will be a BRRR but if this one property ends up being the one, then that's the approach. Thanks!

I am looking to possibly do my first BRRR on a duplex this spring. It is two units of 2BR, 1BA with unfinished basements that will include 2 br, laundry room/storage and living room. So in the end 4BR, 2ba in each unit. The kitchens also need to be redone with minimal wall construction. What kind of questions do I ask contractors when talking to them on the phone?

I have a 2br 2.5ba in Denver CO on a 2.25% 15 year mortgage. I purchased it in Nov 2019, refinanced Spring 2021. Purchase price $318,000, currently estimated $425,000. I rent it MTR and this is my first year renting it. I just did the final numbers and barring any disaster over the next 2 weeks I will end up with $606 monthly cashflow this year. Its my first move into real estate, but now I have the bug and am currently preapproved to buy a duplex in Denver looking for a BRRR/House Hack.

Quote from @David Robertson:

Quote from @Luke Stewart:

Hey, I am in the process of buying a true duplex house hack and I was curious if anyone finds the Bigger Pockets Rehab Estimator tool to be accurate. The property has a small kitchen 212 sqft, I want to redo the tile floor, and new cabinets, counters, sink, and appliances. I would estimate 3 top cabinets, 4 lower cabinets, and at most 25 sqft of countertops (quartz would be the first choice), and a new fridge, dishwasher, and oven/microwave. The estimator is giving me a $63k rehab for the kitchen. This seems insane to me as when I do product lists from home depot or lowes I can barely get over 10k for the total cost of supplies. Even if I go expensive and spend 15k on supplies have a hard time seeing there being almost 50k in labor. Just curious about other's experiences with the rehab calculator.

To answer your specific question, is $63k accurate for a 212sf average grade kitchen renovation?

Here's how I would estimate a 212sf kitchen renovation in Kansas City assuming an average grade materials from a big box store like Home Depot or Lowes.

Overall my price is around $10k for materials, and $7k for direct labor/installation costs + $8k for GC's OH and profit for a total of $26k. 

You could certainly save money by eliminating some scope of work, buying cheaper materials, and managing the subcontractors yourself (instead of hiring a GC) which could bring the cost down to $15k ish.  

I'm sure you could also pay substantially more if you are relocating walls/relocating plumbing locations/electrical locations, buying luxury grade appliances/materials, and hiring an expensive retail GC, but I personally would expect to pay anywhere from $15k to $25k for an average grade renovation. 

 Thank you!! This is much more in line with my numbers, I havent spoken to any contractors yet since I am still analyzing properties but your numbers seem much more in line with what I was expecting for that size. I kind of pannicked when I saw the rehab estimator numbers. Obviously I need to speak to a contractor but this definitely helps me not feel insane. 

Hey, I am in the process of buying a true duplex house hack and I was curious if anyone finds the Bigger Pockets Rehab Estimator tool to be accurate. The property has a small kitchen 212 sqft, I want to redo the tile floor, and new cabinets, counters, sink, and appliances. I would estimate 3 top cabinets, 4 lower cabinets, and at most 25 sqft of countertops (quartz would be the first choice), and a new fridge, dishwasher, and oven/microwave. The estimator is giving me a $63k rehab for the kitchen. This seems insane to me as when I do product lists from home depot or lowes I can barely get over 10k for the total cost of supplies. Even if I go expensive and spend 15k on supplies have a hard time seeing there being almost 50k in labor. Just curious about other's experiences with the rehab calculator.

 I would, it wills stand out more and you can charge more.. equaling more cash flow... which you could use to update the other older units and create a second furnished rental!

@Brad Hunton If I was in your shoes, I would take it one at at time. Furnish one nicely, then save that cash flow, if it works out well use that cash flow to furnish the next. Baby steps. But I would definitely furnish on the nice side, not the cheap side. People like a nicer place if they are there for a month, at least in my experience.

To be factual to definitions, we are in a recession right now.. period. A recession by definition is 2 consecutive quarters of negative GDP, which we had first and second quarter. Just because the government tries to say we aren't in a recession by "changing" the definition, it doesn't change the data. The numbers never lie. So that being said, YES this is a recession, whether its a long one or a short one, a bad one or a light one, we must wait and see. But with mass layoffs at huge companies poping up every week, the fed continuing to raise rates and forecasting more rate raises, and the potential for a large number of people being overleveraged in debt... I would say things have to get worse before they get better. Build your nest egg, be ready for a good deal! 

Food for thought. Do you have both 4-2 and 2-1 units? Why not do one of both and feel it out? Then if one doesn't do well you can convert it back to LTR. I think, just as the other people have stated it depends what the demand in your area is. Is your city growing quickly? = families moving and needing temporary housing, 4-2 better. Is it a traveling work/nurse/contract type city? = 2-1 better. I do think you can charge more for 2, 2-1 units than 1, 4-2.. but I don't have data to support it, just my thought.