Help with rehab process and pulling the trigger on DEALS!

[Andres Ayala]

I am struggling pulling the trigger on deals. I keep running the numbers for a BRRR property and they seem to work, but since this is my first deal I become a bit hesitant on committing on a deal. I am struggling mostly with the Rehab work, I am getting deals from a wholesaler and the properties need a significant amount of work. Because I am not 100% familiar with the rehab process from start to finish and I work a full time job I feel as if I won't be able to fully control the outcome of the property. I am looking at rehabs around 40k-60k and walking a property that needs this much work just makes doubt creep in of how to make it work after. If I could get any advice on how to get more familiar with the scope of work needed for rehabs this size or what the procedure was, maybe shadowing somebody I would feel more comfortable in moving forward. I also had a vision of what I wanted to do but not sure how to present that to any contractors for accurate bids. Does anyone have any reccomendations on how to learn this process either people or materials I can research? I am in Austin, TX which the market here is going up like crazy.

I also wanted to ask if anyone has had trouble finding an ARV for a property in an appreciating market? Where I was looking at the properties were selling for 280-310k for 1,500+ SF 3BD 2B. They were not flips at all or renovated to an extent, most of these were in very nice condition but no full guts in this neighborhood. How can I estimate the ARV on a fully remodeled property if there are none to compare the updated house with?

Thanks in advance!

[Robert Eyers]

Andres, if you want to connect I can run a CMA to get you a decent ARV. You do need to take the "appreciating market" factor out if you are planning to sell it after rehab. It won't appreciate enough between now and when you resell it. If you plan to hold though, anywhere in the metro area is still a safe bet.

I agree with the others about biting off more than you can chew... but there's another popular saying that could apply: "how do you eat a whole elephant? One bite at a time". You're doing the right thing by getting practice in, analyzing deals, and building your network. Do you have a good GC? If so, they should join you on your next visit and can give you a better idea on the cost of repair.

And if others weren't clear... the wholesaler is likely sending you their own set of numbers. You need to be EXTREMELY thorough in your DD, do not take those numbers at face value.

Let me know if I can help!