All Forum Posts by: Nicholas L.

@Account Closed

If you're asking about running the numbers on a BRRRR, just post them here and you will get feedback.

I personally think it's tough to BRRRR right now based on the economic and market conditions - high prices, contractors booked months out, materials expensive. So - run the numbers conservatively. Assume it will take longer to find a contractor. Assume it will take longer to rehab. Assume a higher interest rate on the refi.

Another thing I consistently see is that people don't include closing, holding, and refi costs in their calculations.  And these are not trivial items. Especially if you're refinancing into a DSCR loan, you can pay 5-10K in points and fees.  So, your numbers have to account for that.

If you haven't yet check out Tarl Yarber's videos on the BP YouTube channel.  He goes into granular details on some of his BRRRRs in Washington state and talks about holding costs and refinance costs.  They are at higher price points, but they're still spot on and a great walkthrough.

Hope this helps.  Ask any question you want.

@Shilpa Matlock that all makes sense.  I just think that folks sometimes underestimate how hard it will be to get started OOS.  If you pick a market you can drive to... you can do everything in person.

@Shilpa Matlock just curious, why not invest in MN?  If Minneapolis is too expensive, I have to think there's a market within 2-4 hours of you that is more affordable.

@Leo R.

nailed it.  100 likes.

@Christian Requejo

in a BRRRR you're not hoping for the market to appreciate, you're hoping to increase the value to pull all of your cash out in a refinance.  so there are actually TWO transactions from a financial perspective - BUY, and REFINANCE.  and, the hope is to refinance 3-12 months after the buy, not 2-3 years.

it's harder to illustrate a BRRRR with financing - much easier with cash.

you buy for 100K cash, fix up for 50K, and the new ARV is 200K. you'd try to refi to get your cash back. you'd get 140-150k.

in your example you bought for 20K down.  you have to do something to increase the value of the house from its 100K value at purchase. if you can't increase the value it's not a BRRRR. it might be a perfectly fine investment... again, it's just not a BRRRR.

if you can get it to 140, say, you could refi and you'll get 98000-105000 on a refi.  you have a loan for 80k (100k - 20 down).  you pay that loan off with the new loan.  you have 18k-25k left over.  you get (hopefully) some of your down payment and the rehab costs back.  in this scenario, you're going to "leave money in the deal," but you have more equity because you increased the value of the property.

make sense?

BRRRRs and syndications are miles apart on the investment spectrum - BRRRRs are hands on and syndications are hands off.

hope this helps

No one seems to be reading the post.  He is calling listing agents. 

@Toby Shacalo you need to get your own agent, and have your agent call the listing agent.

@Robin Simon I think OP is calling the listing agents...

@Shawn Getty

I don't know anything about your market but am curious - what's the cash flow like on these $500K rentals you speak of?

@Toby Shacalo

I'm confused

Are you calling the listing agent for each and every property?

Why not find your own agent?

@Byron Bailey

no pivot whatsoever - just trying to find good deals that I can add value to

if monthly CF is slightly lower than it would have been 1 year or 5 years or 50 years ago - that's OK