BRRRR, Appraisal, and Renovations

[Patrick C. Bellamy]

Last year, I made an off-market house purchase next door to me to start a BRRRR in an A quality tenant area. The seller/neighbor was interested in selling but staying as the tenant. We worked out a sale price and rent, and pulled the trigger. Over the last year, I've fixed up some things here and there, but the house needs a lot of work. I attempted to price in the cost of the repairs accordingly into the sale price, which I got $100k knocked off the sale price.

She just recently moved out and I've begun the renovation portion of the BRRRR; fully renovated and expanded kitchen, two full bath renovations, full porch renovation, finishing the basement, etc. I expect the ARV to be closer to $700k (which isnt unreasonable on my neighborhood) after the purchase price of $400k and $100k in the renovation.

I haven't pulled the trigger on the full kitchen renovation yet, but wanted to see if anyone in the area had a company or crew they recommended.  Im in NW Atlanta area.  

But my main question for you all was logistical;  should I have the house appraised post-renovation and approach my insurance for higher coverage to protect my investment.  I'm wondering in a worst-case scenario (a tenant burns down the house) and the insurance doesn't acknowledge the new estimated value.  How should I approach this to safeguard the investment?

thanks for any and all advice,

Patrick

[Andrew Postell]

@Patrick C. Bellamy to answer your question about insurance - this is what "builder's risk" policies are for.  Your insurance agent should be fully versed in this type of a policy...if they aren't, then seek someone else as that policy's sole purpose is to provide protection to us while a property is under construction.

To answer your question about a company or crew in the area - lean on other investors in your market for this.  I understand that's what you were asking for here but some yahoo in Texas shouldn't be answering this...this should be from others in your area.  Try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. But post locally for this. That’s the best bet.