All Forum Posts by: Sunny Burns

So we just finished step 3 of the BRRR method on our first real estate purchase. Never could've done it without biggerpockets as you can read from the post where we got a lot of advice and support here.

But long story short, we bought our first property one year ago, yesterday. A four family for $430k, we put 10% down and put $25k into it. We just closed on our Cash-Out refinance and the property appraised fro $550k($120k over what we bought it for) and we were able to pull out $67k in a cash-out refinance. And now we are ready for the "Repeat" part :)

Anyway during the refinance process, I created a spreadsheet to help my banker better understand our financial status. I wanted to share it with the biggerpockets community, because this is such a great community, and I think this simple format can help people really organize their finances, and help get them a mortgage.

So in the title I say "Best spreadsheet ever made", really its the best spreadsheet I've ever made... hope people find it helpful, let me know if you have any questions about it. I create a binder of all the bank statements, investments and numbered it using Adobe Acrobat.

Spreadsheet can be found on Google Sheets Here.

Just wanted to update this post, going the BRRR method: So we closed on our first real estate purchase (Four Family Home) a year ago - Yesterday. We just closed on our cash-out refinance and were able to pull out $66,930. We also lowered the interest rate from 4% to 3.5%

So we purchased our house for: $430,000
We put 10% down, so Loan of: $387,000
Our appraisal came in at: $550,000 ($120k more than we bought it for)

So the Equity we have in the Property is: $550,000-$387,000 = $163,000

so

$163,000/$550,000 = 29.63% Equity

So we went from 10% equity to 30%. And we went from a 4% Mortgage Interest rate to a 3.5% rate.

On 9/29/2016 we finally closed on our refinance. Total Closing costs were a lot lower than expected at $1,646. We ended up pulling out just under $67,000 for our Cash out Refinance. This amount is almost dollar for dollar what we put into the propety. $43k for our 10% downpayment, and ~$25k for renovations. And the real beauty here is that after pulling out all this cash we still have a higher equity position in the house than when we first purchased the house.

The algorithm was more just for my Wife and I to determine what we felt were important factors in a quality tenant.

I guess the reason for the forum post was to see what other factors people have seen to be important in judging a tenant...

But I was also curious to see if you judged each person according to the same criteria, if you could get away with being so selective. I was under the impression that as long as you don't discriminate against the 7 protected classes, and you didn't randomly just change your standards for different types of people, that you would be okay... Seems like from responses this would not be the case.

Since we are owner-occupied we have a lot more leeway in being selective with our tenants; but just for fun and kind of to standardize what we felt made a good tenant we created this algorithm. Do you think this would fly as a legal way to accept or deny one tenant over another?

Most Eligible Tenant =[Monthly Income]+(3[Credit Score])+(250[# of Years at Job])

+(1000[Fluent English]+[Education Level]+[Profession]-(1000[# of Time Moved in Last 3 Yrs])

-(500[# of Cars]-(1500[# of Tenants outside Immediate Family])

@Sal H. sorry I thought I had responded to this. After calling http://www.state.nj.us/dca/divisions/codes/offices... a second time, I was put on the phone with a much more knowledgeable man. He clearly stated that because the two structures on my property were unconnected, they were considered to be duplexes and did not require a green card. 

So I didn't have to go through it all, wish you the best of luck through...

So it seems like these days a lot of companies are popping up following the uber business model. Today I ran across the http://plowzandmowz.com/ app. I was wondering if anyone has given them or a service like that a try?

Seems like you can request a quote, or just schedule the work, and the app will just charge your card on file when the work is done, and then a  picture of the finished lawn or driveway will be sent to you.

@Karen Margrave, @Michaela G., the tenant says the reason is mainly about not being able to put things on the counter. A 30" Vanity would increase the width by 6" and add ~25% more surface space, I think that is a valuable improvement especially since there would be more cabinet space as well. 

She already has a over the toilet storage unit for those wondering, almost identical to the one @Joe Splitrock posted.

This is what I ended up replying to the tenant with:

"Good evening XXXX,

Sorry we were a little slow in getting back to you, we have given your request a lot of thought. If you read the Alterations section of our lease, our policy is to first determine whether a change to the apartment is worthwhile or not, if it is we will give permission to allow the change. With permission given, our policy is to have the requesting tenant pay for the change with the knowledge that the alteration shall become property of the Landlord. All that being said, we feel that we have encouraged you to search for this new vanity, without directly expressing our policy; because of this, we have decided to make a one time exception, and pay for 50% of the Cost of the Vanity itself and Installation(New Supply Lines, Valves, etc.). We feel it is best to leave the acquisition and transportation of the Vanity to you, but will take responsibility for the removal of the old vanity and the installation of the new vanity. We are okay with the change of the Vanity, but we do not feel the mirror it comes with is an adequate replacement for the current Medicine Cabinet, and do not approve its alteration. Please also confirm that the 30" vanity would not violate any building codes as referenced in our earlier correspondence. Hope you have a great night, let us know if you have any questions."

 This is precisely what I am afraid of...

But it seems like every landlord who has responded has had a different approach, and I guess it really depends on the tenant in question. Still contemplating everyone responses and deciding what approach fits best with our tenant.

So my tenant has been asking about upgrading the vanity in her unit. The current Vanity is a small 24" vanity, it's not in bad shape, but I agreed a 30" vanity would be nicer in that space. So far I've told her I might be amenable to the change so long as it doesn’t violate any building codes. In our lease it states that the tenant must ask permission before making permanent modifications to the property, it also states that any tenant upgrades shall become the property of the landlord when completed and paid for by the tenant, and shall remain on and in the apartment on the expiration of this Lease.

I am curious to hear what others do, when a tenant wants to make an upgrade that is an improvement to the property? Just say no? Go in 50/50? Pay for the materials, but allow them to install it? Have them pay for the item, but you install it?

Below are some pictures of the current Bathroom: