All Forum Posts by: Nicholas Lohr

In my opinion if it comes down to only CapEx and Repairs as to whether or not it's a good deal then it's not a good deal. It's the equivalent of making a bridge that will take 1100 pounds and the weight of the cars are 1000 pounds. It's too close. I want a bridge that will take 2000+ pounds.

I am MUCH more willing to pay for things that come up because I have that cushion.  I could see myself trying to skimp or avoid repairs costs altogether if the margins were that thin and if I did that both the tenant and the property would suffer. 

But to give you some actual numbers I figure this...

$400-$600 per unit per year for repairs(depending on age) and $250-$350 per unit per year for CapEx.

But I am in the multifamily space where all the units are under one roof so it's a bit different for single family. 

good god i had to google map that town name to see where one could buy a 7 unit for 129k!! 

made sense when i saw on the map. 

Nice job.  I just built 2 townhouses in midtown Sacramento CA.  Almost verbatim the same exact numbers aa yours across the board.  Also this part too, "We spent a lot of time on this project (time = money)"  2.5 years for me. Unreal! I've decided that things like this have to be much bigger to justify the time. But what's done is done and the feeling when it's done is pretty damn good!

Honestly at first what I did is just went on Yelp and sorted by the profession of the thing that needed fixing.  I then sorted by the highest ranked and went down the list calling each one. I now have about 30 phone numbers saved in my phone of all the various trades who know me, show up, and do a good job each time. 

because you have the Income growth set at a 2% increase each year. When you come to the part where you are inputting Rental Income there's an option box right there to add a percentage.  Remove the 2% and you'll see a difference. 

What I personally do is make it very clear what the qualifications are and then not have the prospective tenant pay the fee until it's their turn in line on a first come first serve basis. 

I could take a bunch of people's applications, make them all pay the fees, and then pick the best ones but I don't personally think thats fair or needed. 

Also I can usually tell the good ones from the bad by having a phone conversation first and letting the ones who wouldn't make it weed themselves out. 

All of my BRRRR deals have started with 20% to 30% conventional loan. In fact that's the good way to go about it if you can arrange it and the numbers make sense. And yes you can refinance too.

Sometimes with a BRRRR deal the property is in such bad shape that you can't get a conventional loan because banks wont do it and you have to get a hard money loan which can have less favorable rates and terms.

The only thing I get are minor easily fixed repair requests through messaging.  When that happens I call the appropriate repair person, the repair person goes to unit and fixes whatever it is, and then I electronically pay the repair person. Problem solved. 

You'd be surprised how little work it is. Of course I worked as a waiter in restaurants for 15 years so I'm comparing it to that.  The amount of work I had to do in a typical lunch shift where I maybe made 100 bucks FAR outweighs what I do on a monthly basis managing my 14 units.  I could see it getting out of hand at maybe 50 units, but until then I plan on just managing with the good ol iPhone and the Internet. But thats just me. 

I also have well screened tenants in all my units but of course we all already learned how to do that from the BP podcasts. 

Oh and in 5 years I've never got a 3am phone call. Even if I did I'd be sleeping and they would have to wait until morning anyway. 

Just to chime in with a different response from the others above...

If you use a contractor, get a specific and in writing line item by line item scope of work with all prices and make sure those numbers actually make sense.  (use J Scott's BP rehab book perhaps)

On my first BRRRR deal my contractor said it was going to be 30k.... it quickly went to 70k. And no I did not have it in writing.

It was just dumb luck the deal was good enough to save it. 

@Lori Agajanian  I highly recommend you fully exhaust all other options before embarking on a new build. All other options being that you can find an existing property to buy and fix up.

I bought a 4-plex a few years back that only used half the lot and thought to myself, "yeah why not I'll just throw in a few more units back there."  

2.5 years later I finally completed it.

In literally a third of that time I bought, rehabbed, and refinanced a much bigger property and made the same money. (and it was WAY easier)

For example, when you're in month 6...7....8.... and still going back and forth with the building department about design, plans, etc... you'll see what I mean.