$60k ARV, $30k Rehab. Looking for a BRRRR offer price

[Brian Stieler]

I've found a seller looking to unload a flip project they didn't get around to finishing. I'm looking at it as a BRRRR project, however I've included some estimates that would leave some of my money in it. Would you mind checking my numbers for me? Let me know if there's anything else you'd like to see.

2bd, 1ba, SFH, ~850sqft, 

• Asking price $35,000
• Potential monthly rent: ~$1100
• Mgmt 10%, Vac 8%, Maint 10%, Resv 5% = $235/m cashflow

Total Rehab estimate: ~$30,000

Property is currently gutted. No kitchen, no bathroom, some open-faced walls.

• Kitchen $10,000 (Tile floor, Appliances, Cabinetry, Sink, plumbing)
• Bathroom $5,000 (Tile floor, Drywall, Doors, Shower, Toilet, Cabinetry, plumbing)
• Carpet in two bedrooms (~400sqft) $750
• Finish walls $1000
• Furnace $5000
• Water heater $3500
• Remove chimney $3000
• Powerwash Exterior $500
• Potential Termite repair ??

What should be my highest and best cash offer price?

if Cash-out Refi at 70% ARV = $42k - $30k Rehab

• Offer with 0% of my money in ($0) = $12k
• Offer with 10% of my money in ($6k) = $18k

Cash-out Refi at 80% ARV = $48k - $30k Rehab

• Offer with 0% of my money in ($0) = $18k
• Offer with 10% of my money in ($6k) = $24k

Any thoughts? Need more info?

[Sebastian Marroquin]

draft a plan: 

1: buy and hold and for how long? 

2: buy and flip and sale 

if you choose #1: do all of your numbers: and go to your local real estate office: talk to realtors or other people that can recommend good subs: or contractors : (you can go to your local building and safety permit place: they usually see people that are good and organized and people that are bad: as them for a referral: ask realtors for a 'whole sale' flipper contractor as they will be more reasonable. Subs will be cheaper but you will have to manage them and will take the hit if they F**** it up.... 

800 sq ft should really not be $30k (a cheap kitchen should be about $5k to 7k specially because it is probably small. (white shakers will do the trick) 

bathroom: about 4k to 5k if you are doing plumbing and some electrical : if not maybe closer to 3k to 4k (use 1.50 per sq foot for tile)

drywall and paint: laminate flooring : I don't know about chimney : but maybe don't take it out: just cover it with drywall....

make sure to get a $300 home inspection before putting another penny in there.... of course a flipper will say: I ran out of money.... blahhhhh : We can make a better return on other projects... really.... they know they can't make money here ... and thats the truth... (judging by this: I bet you can't ) but it could be a good home to buy and hold. 

specially if prices went up in the last 6 years. 

offer 10k : 20k for renovations: you are at 30k (if he doesn't want the 10k be willing to walk away: he will come back trust me) and if he doesn't , you just got better at negotiations ! 

Look at the rental market: bc you may have to hold it for some time. 

check in with banks and see if they will refi- cash out for you. (make sure you do your homework before hand: if you dont after reading all this.... then, good luck). 

I'm sure you can find other deals if this one doesn't come through : every month I tell my Girl friend: damn - "this is the deal of a lifetime" lol 

Is this a SFR or is it 2 units?

Learn construction numbers and material costs:  (i.e. go to home depot and act as if you were doing this home: and get pricing for everything: see what everything costs) 

learn ARV calculations

learn rental rates for your area

learn how to find your own deals or work with a realtor that is "investors friendly" 

good luck