I have 3 newbie questions

[Cindy Shiblie]

Hi all, I'm a newbie to Bigger Pockets and have 3 questions that came out of the 90 day challenge webinar. Here they are:

-How can I estimate reno costs if I don't have a clue on prices and I don't bring in a contractor until after I buy the home? I'm so afraid to underestimate costs.

-If you do a long term rental, how do you pay back the hard money lender/private lender (if you use one)? I understand for a flip they will get a percentage of the profit, but I'm not sure how they benefit from a buy and hold. If they get a percentage of the monthly cash flow, won't that cut too much into my profit?

-What's a good monthly passive income when calculating a deal? For example, is $150/month enough to be worth it with potential maintenance costs? $200? $300? 

I appreciate all of your help and wisdom!

[Bradley Buxton]

@Cindy Shiblie

1. You can buy a turn key or a flooring and paint property to start. To start look on home dept and you can price out counters sinks flooring etc to get an idea of materials.  As you get into it you will practice getting quotes and bid for the costs. Estimating repairs can be done during the due diligence period when a property is under contract. Some contractors will bid out a job once a house is under contract.  Many times during the inspection if you can get a handyman there they give you a rough estimate of repairs. 

2. Usually you get a long term loan from a conventional lender like a DSCR loan that is based on the property income. There are many different structures for loans. Make sure the numbers work for the property.

3. The amount of monthly income will depend on your goals and the rest of the deal design. Are you appreciating at 25% per year then $150 per month doesn't sound bad for a longer term investment. It will also depend on the amount of capital you invest, if you buy in cash most properties will cash flow. It's only one metric. 

Look for local meet-ups and networking events.  Talking to local investors and others in the industry can help you get rough pricing for rehabs, loan structures, and if your cash flow calcs are accurate. Do some research on your local market and network. Keep in mind you'll never have every number that will be perfect. You'll build in some cushion if something goes wrong.