All Forum Posts by: Sean McCluskey

@Dave Passey thanks for the comment. I guess I was approaching this as, "appraisers place valuations on having xyz and then grade xyz by a quality score, to assign their value". And I wasn't as focused on the direct comparisons with the surrounding comps.

To that point - how do appraisers know what the quality level of the nearby comps are? Do they mostly use homes that they have been able to see inside? Or are they swayed by curb appeal and listing photos?

@Alexander Felice thanks, I wasn't trying to call you out, just wanted to get a better idea of the types of deals you were doing, and try to learn from your method so that I can start doing deals! 

Are you able to use the same contractor(s) on all of your deals? Or do you end up needing to bid things out each time?

Hey @Alexander Felice - does this mean you never really replace a kitchen or bath on your deals? Driveways, siding, soffits, plumbing, electric are all good enough to get that higher ARV appraisal w/o investment? Or does your $10K lipstick rehab include those types of items as well?

I guess I'm asking, to what level do we need to bring the overall quality level of the home in order to get that ARV on appraisal?

Hi @Alexander Felice thanks so much for your reply!

Your target of being all-in at 75% of ARV definitely makes sense, and that is where this deal I'm referring to falls apart.

Regarding rehab costs, how do you make your back of the envelope estimate of what it takes to be all-in? Are you using an average PSF number based on your experience in a certain market? Applying a flat $ amount based on a quick scan through the photos? Or do you move right to identifying a specific scope of work and then looking at where that takes you?

You also made an interesting point re: potentially taking a point out of the deal. I hadn't thought of that for modeling an REI investment, which is funny since I just did exactly that (to a lesser degree) on my primary home purchase! Do you make an estimate of your hold period and calculate a breakeven? Or are you more looking at velocity of money and saying, this deal still pencils at 5.85% and I can use the point to help do another deal right away?

Hey BP! I've been learning passively for awhile and am trying to find the right deal for my first BRRRR.

I'm analyzing a SFH wholesaled deal in a high quality neighborhood, which would be acquired for $100k, which is approximately 55% of ARV, and I was surprised that the deal wasn't cash flowing after theoretically BRRRR-ing the property.

Note that I include PITI, 10% vacancy, 10% PM, 1 month leasing fee, $50/mo for repairs/maintenance calls, and an item by item reserve for future CAPEX replacement, when I calculate monthly cash flow.

This brings me to my question: what are your screening criteria that you use for weeding out bad deals when you're looking to BRRRR?

Is it a rent to price ratio above x? Is it a combination of price % of ARV and final rent to price ratio? Or do you start by looking for assets that are below $75k? Etc.

I'm assuming that I should model the deal as 100% financed at the ARV at 5.5% interest, to test the asset's ability to cash flow w/o including the emphasis of my own equity (which I'm trying to extract, after all).

Thanks in advance!

@Patrick Crotty If you are still exploring this as an option to reduce your DTI, I would advise figuring out which one of your loans has the largest payment for the lowest balance. IE, $200 for a $10,000 balance vs $50 for a 20,000 balance. If you paid off an entire loan early while still making the minimum payments on the others, you would reduce your monthly debt and improve your DTI ratio.

Hi @Monique Vandenberg - did you find any feedback on bildwise, and/or go ahead and use them on a project?

Hi @Christina Kim - did you go through with this purchase? How did it go?

Also, did you use bildwise to do the scope and renovations? I'm looking for people who have used them as I'm interested in doing very similar deals. Thanks!

Hey @Jeff Betschart - did you end up working with Bildwise? I would love to hear about your experience!

@Phil DuChamp

That's great, thanks Phil! 25% COC is really nice - that's in about 1.5 years, right? I'd assume some of that is appreciation?

How fast do you need to move in order to close a deal from them, when they email them out? Do you feel like you have enough time to conduct some due diligence on the location?