All Forum Posts by: Patrick Winn

@Tyler Gibson

You’re absolutely right. I missed the mark there on my comment.

Thank you for clarifying!

- PW

@Brian Hood

I just did 4 BRRRR's this year and aside from things I chose to spend my time on, I didn't do anything that wasn't worth my time.

If you look at deal which one MUST do to truly find good opportunity, that is $1,000 or $5,000 an hour work. It is also something that can be systemized to an hour or two a day in the evening. I don’t count that time because if I wasn’t looking at deals, I would just be watching tv which is a negative dollar amount.

I have a contractor that manages the entire rehab for me (who we pay very well) & I visited the properties once a week (when I felt like it). I also have a great relationship with my banker that lends me the hard money, as well as a mortgage broker who does the refinance for me and I don’t lift a finger.

At some point you are going to have to spend your time doing something that is $0 an hour work but if you are diligent, you should only have to do that once, create that system around it and then repeat the process next time twice as fast.

The returns I made on my money this year is 45% (cash on cash) so I would do it all over again every single year.

It you are looking for truly passive investments, the stick market can be that but the stock market will never bring you a 45% ROI (cash on cash).

I’d like to go into this deeper if you want to chat.

- PW

@Tyler Gibson @John Yeglinski

From my experience, one does not pay capital gains taxes on your primary residence.

One person can realize a net gain of $250,000 on their primary home and two together can realize up to $500,000.

Just save your money, move into that fixer upper/ house hack you mentioned and then rent our your entire first home on Air BnB.

@Jeff Short

I live in the Dallas/Fort Worth area. If you find anything around here, I’d be happy to take a look at it.

@Austin Fowler

We have built our own spreadsheets to figure these costs based on square footage and past experience.

You can use the BP calculators to do some of the same things.

We have our own subs that we have used for a few years now and so we know what they typically charge. It’s tough using subs though and we have to continually rotate them when their prices suddenly double.

We also have a good friend on our team that has been a contractor for 20 years and he helps us with some costs and we share our crews with each other.

Here are a few quick numbers in my market. Yours is going to most likely be totally different.

Paint: $3 - $5 a square foot.

Wood or laminate Flooring: $5 square foot materials and labor.

Tile: $7 - $8

Electrical: Unpredictable haha

AC: Typically $3,500 for 1,000 sq ft.

$3,000 per bathroom.

After I run the numbers, I always add 10% to 15% on top for unexpected things that always arise.

When doing hard money, I also add 3 or 4 months of my interest payments into the rehab costs.

Let me know if you need anymore info, I love to help.

- PW

@Natan Gutt

I just finished my 4th BRRRR this year and what I do is get a hard money loan from my local bank.

They will give me the cost for the property & rehab costs. This loan is interest only for 9 months with an adjustable rate (prime + 1) with 20% down.

Here is an example from a recent deal.

Purchase Price: $145,000

Rehab Costs: $55,000

Total Loan Amount: $200,000

Typical Down Payment: $40,000.

Since the bank uses the ARV to determine your loan to value, it ended up looking like this.

Appraised Value: $230,000

80% of $230,000 is $184,000

The bank then only requires me to cover the difference of 80% of the ARV and the amount we agreed that they would lend me, in this case $200,000 ($145,000 + $55,000).

Instead of paying $40,000 to buy and rehab the property, u ended up only paying $16,000 ($200,000 - $184,000(ARV)).

This is why I was able to do 4 in one year.

After you have tenants in place you can refinance into a better loan product with a fixed rate.

@Jeff Short

Everything I have read says that the eviction protection is up on September first?

But to answer your question with another question;

do you have a plan for the cash once you have it in your account?

If not, it might be best to refinance and take the cash out, still own the property and then have the cash to sit in your bank account.

If not, the money is worth more for you in that house than it will in your savings account.

@Austin Snow

Let them leave, keep their deposit and get another renter.

The previous deposit should be enough to cover the mortgage while it is vacant.

@Jonathan Hasan

Jonathan, don’t be afraid to mess up. Failure in this game is just the cost of tuition.

You will learn so much by jumping in and making your best attempt.

You got this!!