All Forum Posts by: Brian Larson

Hey @Dean Suzukisorry I missed your call earlier. Now I see what you meant in your VM :)

My thoughts on this. They may not be terribly helpful in getting to a decision but considerations you may want look at:

- I am no expert on this but that interest rate seems high based on what conventional rates are at. Are you sure this buyer will pay the equivalent of HML rates (in Phoenix at least)? Si

 - You were looking to sell these in order to get capital and do some other great stuff (per our discussion) that would be closer to a 15% return. Does getting out of these properties and carrying the note really get you what you are looking for (i.e. 9.5% vs 15%)? You are not getting any extra capital (just covering note, closing costs, etc). Based on my comment above, if you the buyer is not willing to give 9% does that make this a nonstarter? Maybe sit and wait for an offer that will yield full payoff and capital?

- Last note, maybe you seller finance the one free and clear and then wait for a buyer finance/cash offer on #2?

Good luck man, I am around tomorrow fi you want to bounce anything off me (not that I have a better answer than BP)

Brandon, I will likely expand this over time with taxes, insurance, etc but am simply using the NOI ratio for now. Basically I change this ratio based on my market knowing that it is close to 50% in Indy, but is better and closer to 55% in KC, etc.

By keeping it a little more vague I thought others could then apply their own percentages for maintenance, vacancy, capex, etc. I use 10% for main/capex, vacancy and PM but some folks will individually manage, not save for capex, have lower vacancy, etc...

thanks for checking it out.

b

Originally posted by @Andrey:

What do you mean by "Rehab Contingency"? Thanks!

I use this as my 'buffer' on the rehab estimate. I have found that different GC's estimates can be aggressive and others conservative. Heck, one of my guys for my flips is pretty much always within 1% of estimate so I don't buffer but another guy consistently needs more so I put in a 10% buffer.

For the sake of the calculation it is simply adding that percentage amount to the Rehab estimate cell. you can keep this 0% and do the math yourself if you like when entering

brian

I am not sure why my BP fileplace is locked down. Maybe I need to be a Pro member? not sure.

I reuploaded again here:

http://www.biggerpockets.com/files/user/peeklay/file/brrrr-calculator

I also put the file on OneDrive. It is located here on Onedrive. sorry about this issue.

http://1drv.ms/1h3gXqA

Well that's not good. The link works for me so not sure what's up.

Maybe see if you can hit my fileplace and then click into file from there?

http://www.biggerpockets.com/files/user/peeklay

Or here

I have created a post with the calculator. I hope it is useful. See details here

Here is a screen shot so you can see what it has in it before downloading

I am not sure if this is the right place or not but I have recently bene going at the BRRR strategy exclusively and have build a spreadsheet that lets me quickly analyze a deal that comes across my inbox.

I hope this is useful to others. Pretty basic, just insert the inputs that are BOLD and then it will give you some analysis on the deal.

Default values are for an actual deal I am pursuing now.

For more info on BRRRR strategy see @Brandon Turner post here

You can find my file here

I welcome any feedback (good or bad) and as you can see by the current version I tweak often. I have tried my best to keep it clean and keep the !REF errors when values changed to a minimum :)

I am just beginning to use this method (transitioning from doing flips to get me DP money to buy a rental) and have just made an offer on a property and plan to get it rehabbed and rented ASAP. My only 'variation' on this is that I want to free my capital up ASAP so I have created a small network of friends/colleagues that like to do short term trust deed loans (12month @ 7%).

I will essentially buy, rehab in cash, then put that TD loan in place and wait my 1yr seasoning before I refi into conventional via a rate and term refi. In order for this to work you need to get a solid deal so you can be cashflow positive while carrying the higher interest rate in year 1. Harder but doable and then years 2+ get a nice little bump in CF.

I have created a calculator to help me quickly analyze a property and will share it in the forums shortly. It is a BRRR specific calculator and I hope it is helpful. I will follow up with a post here once I get it scrubbed/uploaded.

That's my thought as well. As I mentioned, I have no idea if my realization is a reality or not but it sure feels that way.

Since this post I asked other grandparents(85+ yrs old) and every one of them has done a seller carry. Tiny sample set for sure but interesting. I then asked my parents, wifes parents and some neighbors (55-65yrs old) and they all said no, they had never needed to do it. I don't feel like I have to ask my friends (30-40 yrs) as they will just ask for clarification on the question ;)