BRRRR Adding the most appraised value???

Question

I do understand the the brrrr concept as a whole. This is the concept that does interest me the most. What I like about it most is the quick equity gain right away which I think is superior to just buying a ready to rent property.

I just closed on a home the I intend to use the brrrr method. Hoping to get most of my money out but will be fine leaving some in the deal.

The question that I have for some of your experienced brrrr investors is what will add the most value when you go get the property appraised for refinance?

Are you looking mostly into comps in the same neighborhood when evaluating a deal and seeing if a deal would work?

I know other then adding extra bedrooms, bathrooms, or increasing square footage what else do you do to increase value.

From your experience do appraisers really care about when appraising your property?

Samara Huntley · Answer

Truly my best appraisals have came back when we didn't cheap out on the reno.

As Tim said, make it look above average to the appraiser. My best BRRRR's ever have been when we went the extra step i.e paint the exterior, go all out on the kitchen and baths, nice landscaping etc..

The best one I completed was located in Concord (sub city of Charlotte) in October of 21

Purchase price 94,000

Reno 47,442

Appraised Value 205,000 (we originally estimated a 175k ARV)

On this one, we carefully picked our finishes which needed up making it the nicest one on the block. To get a free BRRRR in the Charlotte, NC market is tough, much less getting one you can cash out on.

This doesn't mean you have to spend tons of extra money. Instead of a tub insert, do a tile surround (the price difference is a couple hundred bucks.) Instead of painting all the cabinets white, do the lowers a different color to create variety. Keep it simple, i'm not saying paint your lowers pink. A light sage green or navy blue will do. Pick nicer finishes - get the $300 v.s the $150 vanity. Wooden shutters help too.

Michael Noto · Answer

In no certain order this is what we find matters most on a BRRRR appraisal as far as things you can control

- outside curb appeal

- remodeled kitchens, baths

- Updated electrical and HVAC

- a new roof if the current one is a big eye sore

Andrew Syrios · Answer

In 2003, the National Association of Realtors came out with a study on the characteristics that increase and decrease the price of new housing (assuming all other characteristics, i.e. square footage, remain the same). Here is what it found:

• Full Bathroom: 23% increase
• Partial Bathroom: 15% increase
• Garage: 13% increase
• Central Air Conditioning: 12% increase
• Fireplace: 12% increase
• Basement: 9% increase
• Close to Golf Course: 8% increase
• Higher Ceilings (9 Feet): 6% increase
• Additional Bedroom: 4% increase
• Laundry: 2% increase
• Above-Ground Swimming Pool: 0% increase
• In-Law Suite: 5% decrease
• Professional Office: 5% decrease

Jibu V. · Answer

What’s the solution for that if you’re investing at a distance?

Tim Delaney · Answer

We focus on making our BRRRRs look above average to the appraiser. That usually means redoing the kitchen and bathrooms, fresh paint, and new flooring. Making the outside look nice helps with the first impression as well. Overall, you want to be a bit nicer than some of the recent potential comps in the area.

Samara Huntley · Answer