What rehab repairs Should I do?

Question

Hey! I’m getting ready to do my first brrrr deal. PPis $200 and the ARV is $290K. I want to make sure I do the right rehab to increase my ARV. What rehabs do you suggest? BTW, the rehab for this project will consist of only cosmetics. The house Ingrid shape!

Whitney Hutten · Answer

@Simon Obas Can you describe what is needed? Maybe post pics from the inspection. Hard to say when ya have not context. That said, here are some ideas on where I concentrate:All new flooring (LVP or LVT)All new paintAll new light fixturesNew kitchen (granite countertops, backsplash, painted cabinets, hardware, matching appliances)New bath (I like matching the kitchen finishes)Ceiling fansGood mechinicals (HVAC, water heater, roof, foundation... no leaks or drafts!)Clean manicured yard. Doesn't have to be fancy... just clean, and easy to care for especially if you are renting it.

Zach Westerfield · Answer

rehabing for BRRR is different than rehabing a straight rental property. its a lot more like rehabing for a fix and flip. It takes experience (im still learning myself) to learn which areas to focus on for the most cost efficient rehab. My thought is, almost all SFR appraisers are used to looking at a house through the eyes of residential buyers. So the same thing that a buyer in that area would want to see the appraiser is going to like. 1. learn your comps. If you ARV is 290K, look at 290K homes nearby that are similar and sold recently. This makes the job easy for the appraiser and you. if these homes have stainless appliances, granite counters, etc, you need to do that as well to get that ARV. 2. Focus on Kitchens and baths: just like selling a home, this are the big ticket areas, so spend your extra budget her. I use new stainless appliances and granite countertops even though it will be a rental. i have had several appraisers positively comment on that, and i have found i attract a higher end tenant for the market. Also, granite is more durable (tenant proof) than Formica. 3. make sure the "cosmetic rehab" is complete. if plumbing and lighting fixtures look old or out of date, replace them. this is a relatively small expense for a 290K house. You dont have to go expensive here, just something that is new and in style. i go with low end oil rubbed bronze fixtures. a faucet runs $30-50 but makes a big difference in a bathroom. 4. Flooring - i use Luxury Vinyl Plank flooring throughout the entire house, bathrooms and closets included. its durable, tenant resistant, in style and looks great. and its affordable compared to other hard surface flooring options. 5. spruce up the landscape - dont spend much money here - your tenants will most likely not keep up an expensive landscape. your goal is to get curb appeal for the appraiser and initial tenants. Trimming bushes, mowing grass, and having pinestraw and mulch can go a long way to making a property look nice from the outside. 6. pressure wash - speaking of curb appeal, any cheap way to make sure a house looks good is to wash it. a pressure washing runs about $200, but can make a property look new. I definitely spend more on my BRRRs than other landlords do in the same area, but I do spend less than I would if I were flipping the same property.

Michael Doherty · Answer

@Simon Obas Hey Simon, congrats on locking this up. Before you commit to doing a BRRRR- check out this article. https://www.biggerpockets.com/blog/surprise-mortgage-newsIf you plan on BRRRRing it I would go for items that are tenant proof. You do not need to go for as high end finishes if you do BRRRR. If you sell, i would recommend granite counter tops, stainless steel appliances ect. With the market as hot as it is in hartford county, I would consider flipping as well.

Zach Westerfield · Answer

@Simon Obas from what I can see in the pics, this property needs very little. The floors look great. Outside - trim everything up, clean any trash, put out fresh mulch Based on your budget you can consider painting the outside. Shutters are cheap and add curb appealInside - Paint and updated electrical fixtures. I would keep the cabinets if they are in good shape, and paint them and install new handles. Those are nice appliances. I would add low end granite countertops. For the bathrooms I would paint everything, including vanity, and install new faucets and lights. Finally I would paint or replace the old brown closet doors. Looks like a great property

Sarah Brown · Answer

What does the home currently look like? There are several features that will increase salability, but not necessarily value, but I wouldn't overlook them for the sale. What do other homes in that price range look like? There are a lot of questions that need answered before you can determine what to repair.

Gerald Gardere · Answer

I'm new at this so each house gets its own budget that fits the cash flow and equity and the Deal. Cost is everything as an investor, so I'd probably reverse engineer the BRRRR to make sure it cash flows and has equity. Based on the numbers I decide how much is available to renovation while satisfying the 2nd sentence. Clean the carpet or install indestructible floating floors? Install 1" granite or go with the manufactured solid surface? What about holding costs?

Tara S. · Answer

@Simon ObasMy motto is people pay for pretty! Update what NEEDS to me done to make the house functional and pretty. Get creative when shopping too don’t just buy builder grade everything see if you can find a $30 light instead of a “boob light”. Primarily focus on kitchens and bathrooms if their pretty your good. Exterior just needs to be clean landscaping is not important from my experience it makes very little difference.

Zach Westerfield · Answer

@Simon Obas that depends on your comfort level and systems. BRRR is flipping, it’s just flipping to yourself. If you develop good systems for rehabbing and flipping properties, you can handle as many as you want. Two years ago I was doing the work myself and could only do one at a time. Now I have better systems, and have had three in various stages at once this year, and would feel comfortable handling 5-6.

Simon Obas · Answer

@Zach Westerfield how many brrrr deals would you do at one time?

Simon Obas · Answer

@Zach Westerfield VERY HELPFUL!!! Thank you.