All Forum Posts by: Semilore Lawal

@Marcus Auerbach. I am with Marcus on this one, I’ve been doing it for 10+ years have an in house construction company and we still struggle to be completely accurate.

The best way to do have a range on line items and be able to live with the worst case scenario.

We tell people that want to BRRR you should plan to leave 5-20% in the deal. When they ask us why it's such a large range we tell them because of the amount of variables.

Will the market go up or down? Will material costs go up? Will we hit rental projections spot on 6 months in advance? Will we find knob and tube behind the wall? Will the appraiser hate your color scheme and dock you for it subconsciously?

These are the questions that I have found fit better with my philosophy degree than my business training.

My thoughts is that you should find a good GC that can walk the property and get rough scope of work estimate. Maybe compensate him well for his time so he can give you an objective estimate and not feel like he needs to downplay the repair costs so you'll be more likely to buy it and it's not a waste of his time. If you can find one that also has inspector experience, that would be a unicorn you don't want lose. Good luck!

I have been BRRRR-ing for 15 years and still don't get it right LOL

First you need a good scope of work, and this is already the first problem, because its difficult to write up an accurate SOW and if you add things later (and you will) you'll blow your budget.

My experience here in Milwaukee is about $50 per SF for a full rehab recently. We used to be around $35.

ARV is an art and a science. Many agents struggle with it, it takes a lot of practice to get that part right consistently. So you have to find an agent who has experience and also understands your SOW.

Really depends on what is needed. Cosmetic fix is pretty easy to estimate. Bad plumbing, rotten facia , leaking roof, crack on the foundation are much harder to estimate. I suggest contact at least 3-5  G.C and compare the estimates. Also it would be in your best interest to find contractors that specialize in certain fields. A G.C. has a painter, electrician, etc and he charges you 20% on top of their bid to him. As the homeowner you can pull permits yourself. 

Right now the ARV is going up, look for comps in the area of the same style home you are looking at. You will do well if the rehab is in line with the other homes. Adding more to it is a waste of time and money. Let the new owners add their touches. Under built will lower the price.

@Semilore Lawal

You can ask your agent to run some comps for you on what you plan to do to your property. This is what I do, and I’ve had great success with it.

Hey @Semilore Lawal, welcome to the BP community!

The best way? If by best you mean the most accurate, that would be having a reliable GC come out and walk the property with you. If by fastest, that would be you understanding rehab costs and estimating that yourself. This requires experience though so I'd recommend building a relationship with a contractor first. 

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!