Investing in a quadplex as a brrrr

[Natan Gutt]

For context here is the situation. I have a quadplex in minneapolis, in a solid area, for 200K. The seller is selling as is. Obviously the place is going to need to be rehabed. I am still a newb here so i apologize if the answers are obvious. My two questions are as followed. 

Firstly, I am investing for my first time with a partner that has 6 rental properties. We are in the middle, and almost done, getting pre approved for a conventional loan. Once we are approved, how would we get the necessary 80k or so to rehab the property? Hard money? credit line? is there a way to refinance the property to pay the initial mortgage and the money used to rehab?

or

Should we from the beginning use the brrrr strategy to accomplish this? 

Part of the reason I'm asking is becuase the process for this mortgage is very time consuming and i dont want to lose the opportunity if it means i have to start over with a different lender for the brrrr strategy.

Thank you for your answers!

[Patrick Winn]

@Austin Fowler

We have built our own spreadsheets to figure these costs based on square footage and past experience.

You can use the BP calculators to do some of the same things.

We have our own subs that we have used for a few years now and so we know what they typically charge. It’s tough using subs though and we have to continually rotate them when their prices suddenly double.

We also have a good friend on our team that has been a contractor for 20 years and he helps us with some costs and we share our crews with each other.

Here are a few quick numbers in my market. Yours is going to most likely be totally different.

Paint: $3 - $5 a square foot.

Wood or laminate Flooring: $5 square foot materials and labor.

Tile: $7 - $8

Electrical: Unpredictable haha

AC: Typically $3,500 for 1,000 sq ft.

$3,000 per bathroom.

After I run the numbers, I always add 10% to 15% on top for unexpected things that always arise.

When doing hard money, I also add 3 or 4 months of my interest payments into the rehab costs.

Let me know if you need anymore info, I love to help.

- PW