BRRRR - Resources for materials, appliances, etc

[Vincent Filia]

Hi BP, I'm looking to start my first BRRRR project asap. My father and I have been looking around my area (Pittsburgh, Pa) and I think we found a good one. It's listed at $49,900 and in surprisingly decent condition, 3bedx2fullbath. ARV is $125k however, I'm a bit cautious with my numbers because there aren't very many recent (within 6 months) sales to go off of. I calculated ARV by finding all 3x2 homes in the surrounding area but I went as far back as sold in the past 3 years. I'm not sure how much of a problem this is but to counter any potential problem I included market appreciation in the selling price of the comps. So if the house sold for 100k back in 2017 I calculated what it would sell for today using my target area's appreciation rate. Any experienced investors have thoughts on this?

Anyways, my official question is: What are people using to get decent quality materials and appliance packages. Our end game is to hold this as a rental for a long time so we want to use tenant proof materials, appliances, hardware, ect. Where is everyone getting their materials from? Big box stores? online for appliance packages? Craigslist? 

Like I stated earlier, this would be our first BRRRR project. Like most new investors the cost of renovations is a highly sought after formula. I have not yet read J Scott's book yet (I plan to) but saving money where you can, in my opinion, is very important to help your bottom line when BRRRR'ing.

Thanks in advance!!

[Michael Tyler]

The ARV is ultimately decided by the appraiser at time of refinance. Typically an appraiser is focusing on only the last six months of sales.

We've been pretty steady the last few years, and so factoring in sales from 2yrs ago will not be wildly off target. But the appraiser probably won't figure those in. If there are no comps in the last six months, the appraiser has to widen the search area and everything gets even more unpredictable. This could be bad for your deal, or it could be a huge win. 

For example, go listen to the "Montana" podcast episode of the Investor's Journey. They're two guys who invest in San Antonio. They bought a brokedown house in the Denver Heights neighborhood (which is sketchy). There were lots of travails in their deal, but they came out alright in the end because the bank's appraiser had to pull comps from the neighboring Dignowity Hill neighborhood (which is more gentrified). The appraisal was amazing.