BRRR deal seemed great until the contractor started rehab

[Jeremy Anan]

Calling out to all investors!!!

This BRRRR deal seemed great until the contractor started rehab. This is a 5-Unit multifamily. The property has been vacant for a while (maybe 10 years; not exactly certain). It is a gut rehab. We've completed demo to the studs; all walls are now open, as well as the ceiling. We now realized the property is unstable due to the rain all these vacant years. A lot of "lumber" work is needed in order to stabilize the building.

So far, I’ve purchased $12,400 worth of wood (2X6X16 DRY, 2X10X14 DRY, 4x8x3/4 OSB T&G, 2X10X20 DRY, etc…)

Looking at the labor costs my contractor is charging to stabilize the building, the financial figure is quite concerning.

I have rehabbed small multifamily before, but they were not gut rehab. The previous 2 projects (7-unit & 5-unit) with the same contractor went super well.

I am reaching out to more experience rehabber, investor. Are these labor costs reasonable to you? These are all 1bed/1ba apartments.

[McKade Evenson]

@Jeremy Anan

I agree with Kris, definitely ask some other professionals to make sure the numbers are correct. But I would also say that it looks like you should look at alternative exit strategies if BRRRR isn't going to work for you. Not every deal is going to work out exactly how you plan it to, that's why alternate exit strategies are so important! Best of luck!