BRRRR purchase/rehab checklist

[Brian Raike]

I just finished the BRRRR book by David Greene and I am developing a checklist/system for assessing a BRRRR deal. I would love some experienced BRRRR investor feedback!

Background: I am an out-of-state investor, investing back home. I own a couple properties there, but I've never done a BRRRR deal. I know the contractor, agent/manager (investment partner), and I have worked with the inspector multiple times.

A few notes/Questions: 

-Step 1: Any suggestions for additions for estimating ARV?

-Step 2: 1% rule properties usually cash-flow in this area (despite high taxes). That said, I'm using 1.1% to add an additional buffer for me to make mistakes on my first BRRRR.

-Step 3: Any suggestions on additions for rehab costs?

-Step 5: I'm going to do this first deal based on 95% ARV - another 5% buffer for me to make a mistake.

-Step 5: What categories should go into acquisition costs?

-Step 6: I am, at least at first, paying a a trusted inspector to go on the initial walk-through to tell me about the big structural/code issues.

Any feedback would be helpful.
Thank you,

Brian

[David Robertson]

Under the rehab section you have a couple of steps that you'll need to do more research on:

1. "Ask wholesaler estimated rehab costs"
2. "Ask wholesaler what needs to be fixed"
3. "Call contractor and get a rough estimate"

I would never trust a wholesaler's estimated rehab costs # or their Scope of Work.  Wholesaler's are notorious for underestimating rehab costs, so you really need to be able to identify the repairs, create your own SOW and estimates yourself.

As Miller suggested, you should pick up 'The Book on Estimating Rehab Costs".