All Forum Posts by: Shaughn Lee

Ramzi, yes I think that BRRRR strategy would get you more gains rather than putting money into a basement and renting out the property.

But it also opens my eye to Matt's comment. I personally wouldn't like to do business with my friends or families money. Have you calculated your costs to acquire the property with whomever you use for financing? Have you calculated the holding costs while you repair it? Factored in realtor fees? Closing costs? Repair costs? Staging costs? Do you have an exit strategy if things go south? 

Not having the right capital and right fix and flip can put you in a really hurt position especially if you're gambling your families money and wind up in a stuck in the middle position. 

Not saying that you don't, but you must do all the math right first. Because if you don't, it can cost you your pockets. 

Check and specify which kind of issue this is coming from. Is it the HOA? Is it the city? Is it the builder? (Builders don't have dictation after house is sold I'm sure) but if you have an HOA and they say no (for whatever reason) then yes you will run into fines and probably legal issues to have it removed if you don't comply. If it's the city, what's their reason? They won't allow a building permit? Sometimes the city can be negotiated with to make ends meet. My opinion honestly is that if your in a single family neighborhood and you try to turn it more Into a duplex the neighborhood HOA won't allow it and to have two separate units in one building you'd probably need to knock out walls and add a divider in the middle for privacy, which is going to cost you more money. It might be better to just rent it at extra cost due to the extra space available to renters.

Update- arv value to last post.

Let's do the math, figuratively. If you fix up the basement and rent out the house what will your gross profit be per month? Times that by how long it will take to make *estimated* 150k profit from turning a 450k house into a 600k house. Which one weighs more?

A few words of wisdom. Hire a property manager who has resources to get your properties listed and rented out much earlier than five months and can also process, screen, and weed out the bad ones. They do this typically for around 100$ per unit. It takes the stress off your back and is well worth it. Had you have done that you might not have had tenants run off with appliances, and been able to fill the vacancies sooner to re coop losses. Also, if you're going to use Craigslist, never take a contractor at their word. Check their reputation, reviews, history of work, and BBB rating. Hopefully this advice might help you avoid the same mistakes in the future. Don't give up, you can do it.