My first BRRR Project

[Mohammad Khan]

Hi everyone, 

After 4 years of being a landlord and owning a few rental properties, I have decided to take on a more complex project which requires building a dwelling unit, ADU and enclosed parking garage. I found a multi-family property in the greater Los Angeles area. The property currently has two dwelling units and is in a much-needed rehab. Also, I am planning to build a dwelling unit and an ADU. So far I have confirmed with the city that I am allowed to do the construction. Also, I have shortlisted a contractor that I want to work with on this project. Just a bit of a background about me. I am a finance professional(nerd) and I have been working in the industry for 10+ years. My strong suit is working with people and budgeting and forecasting and running my business. Recently I have built a real estate BRRR calculator model in excel that anyone can use to calculate the cost of the project and calculate ARV, interest, net cash flow, ROI (5-year forecast), Cap rate etc. [Solicitation Removed by Moderators]

I am reaching out to you to see any Guru out here who can guide me through the project. Any help you can provide will be much appreciated. I am very motivated to take my real estate journey to next level and eventually quit my 9-5 job and do real estate full-time.

I am very passionate about real estate and I am loving my real estate journey so far. 

Best Regards

Mo 

[Dan H.]

Originally posted by @Mohammad Khan:

Hi everyone, 

After 4 years of being a landlord and owning a few rental properties, I have decided to take on a more complex project which requires building a dwelling unit, ADU and enclosed parking garage. I found a multi-family property in the greater Los Angeles area. The property currently has two dwelling units and is in a much-needed rehab. Also, I am planning to build a dwelling unit and an ADU. So far I have confirmed with the city that I am allowed to do the construction. Also, I have shortlisted a contractor that I want to work with on this project. Just a bit of a background about me. I am a finance professional(nerd) and I have been working in the industry for 10+ years. My strong suit is working with people and budgeting and forecasting and running my business. Recently I have built a real estate BRRR calculator model in excel that anyone can use to calculate the cost of the project and calculate ARV, interest, net cash flow, ROI (5-year forecast), Cap rate etc. Please reach out to me if you like to utilize the calculator and I am happy to share it with you.

I am reaching out to you to see any Guru out here who can guide me through the project. Any help you can provide will be much appreciated. I am very motivated to take my real estate journey to next level and eventually quit my 9-5 job and do real estate full-time.

I am very passionate about real estate and I am loving my real estate journey so far. 

Best Regards

Mo 

Question: have you looked at what you plan does for the financing options?  Are you aware that it currently could eliminate Fannie/Freddie loan options?  Without F/F loans, the value is often reduced as the loan terms are less ideal.

Do all of your homework. Make sure you understand all ramifications before proceeding. This includes what the changes will do to financing options as well as understanding how the ADU will be valued by appraisers. Determining that they are allowed is really only one aspect that you need to research.

Good luck