All Forum Posts by: Tu Hoang

The contractor was communicating through the wholesaler, how does that even make any sense? How did that happen? That's a hard no. You sound overwhelmingly not ready to do this in my opinion and are ripe to get burned. A contractor's estimate can be a million things - it can be just labor costs which lead new investors to think everything is in there and then no materials and no flooring and no toilets and no everything is included. Appliances would not be included in most contractors prices unless you want to get upsold on the appliances and the installation. Most of the time, your plumber will install the appliances not the contractor. If you are allowing the contractor to use all of his or her subcontractors you are already losing a ton of money. I would take a step back and ask yourself if you really have the knowledge to get started. It sounds like you are about to lose a ton on the reno portion.

Thanks for the concern. I'm pretty versed in project management like this through my corporate finance role. The wholesaler was a new hire from my buddy's brokerage so I don't know his intention on communicating through him. As far as pricing goes, I have detailed estimate of what I want to do, just happens to be missing a couple of things. The reason why I am going through a general contractor and not hiring each job out is 1) due to inexperience on what to look for in a rehab and 2) required by my HML (Civic Financial Services) until I have 5 deals under my belt. The numbers make sense for a flip even if the reno goes $30k over. I just rather have that $30k go into my pocket.

0 Votes

Thanks for the input everyone. I am waiting on another estimate from another GC2, but don't have anything to compare to yet.

The GC1 seems to be on point with everything and is very knowledgeable about the area. One thing that did made me uneasy was that he was communicating through the wholesaler instead of directly with me. Does that seem out of character? Also appliances were not included in the quote. Is that normal in a flip/BRRRR?

0 Votes

Hi BP,

I am about to acquire my first project and needed to figure out my exit strategy. I am currently at Buy.

Purchase price: $120,000

Rehab: $95,000

ARV: $280,000

For the Rehab portion of BRRRR, I have received bids from GCs, but have a hard time understanding how the proposal work. The GC left out a some things we discussed, which I have requested to be put in scope before signing. Is getting everything in writing before the project start the best way to protect myself? Also, the budget is higher than i would like. What happens if we finish the project under budget? Does the GC keep the difference? What if it was over?

As for the Refinance portion of BRRRR, I have a hard time understanding how the refinance works. Since I am taking out a hard money loan, interest rates are expected to be 10.5% with a 1-year term. The rehab is expected to take 3 months from close to finish. If the seasoning period is 6-12 months, I would have additional carrying cost for 3-9 months. Are there lenders out there that would work with a lower seasoning period. If there are, can someone point me in the general direction?

1 Vote

Hi, I am new to the BP forum. I have listened to several podcasts and really like the idea of BRRR, but do not know how to start. How do you find deals? Who provides the initial cash for purchase and rehab? Who would do a cash out refinance? How much do I need to start?

0 Votes

All Forum Posts by: Tu Hoang

Tu Hoang has started 2 posts and replied 4 times.

Post: BRRRR Strategy help needed

Post: BRRRR Strategy help needed

Post: BRRRR Strategy help needed

Post: How do I get started with BRRR?