All Forum Posts by: Alexander Spira

Thanks @Tim Youse .The project is in zip 21215. I am not sure if I over did the rehab on the house I was just asking people in the market how their BRRR's typical look. My rule of the thumb is, if the bank is coming to refi you want to comp with the best. So we put in new heating and cooling plus duct work, brand new kitchen all new laminate flooring plus a third bathroom. In the long run all capex will pay off in the end.

Thanks @Ryan Blake for the compliment. Definitely looking to do more to get that passive income going.

Hi Bigger Pockets Members,

Great news I just refinanced out of my first BRRR as @Brandon likes to call it (Buy,Rehab,Rent, Refinance,Repeat ). We did a good quality job in Baltimore City.

From the buy to the rehab to rent and then to the refinancing it has been a real roller coaster ride. All very much worth it but you got to really want it to make it to the end, it's been a 8 month process. Here are how the basic deal looks:

  The house got appraised at $140K so the bank lent me $105. At the end of the day I have about 15K -20K left in the house. New mortgage payment is $799 and the rent in $1400.   I should clear about $5400 a year comes out a 25% cash on cash return. This is a nice return and I am happy to share this news with fellow members as encouragement for others and as a thank you to @Joshdorkin and @Brandonturner for helping me out with all the info etc. Of course all the great members get many thanks as well for having answered questions and picked up the phone for me. Thanks again, you all rock !!!!

For those of you who have BRRR in the past is it normal to have some of your money in the house or are the expectations to refi out everything plus some?

I am trying to figure if I over did the property ? Any advice would be helpful.

@Stephen Lee you are correct. I dropped the deal. The property is down town and we were looking at appreciation. Bottom line I would have to put in all this money and work, to get a average return. I might as well just buy a turn key same price and no stress. I am very happy with my conclusion. Sometimes the best deals are the ones you never do. Thanks for reaching out. 

@Thorney Gibson your concerns are valid for "turnover, lead issues, lawsuits, court, utility court". I still remember finding out about this "Lead Certification for Maryland State" a real pain and costly but it keeps people safe we hope . 

Our whole strategy is to go for the B+ A- group by making a nice apartment in this area that is changing over. We hope not to bring in those kinda of tenants that bring those concerns. 

For the general Baltimore city market that is a valid point. Thanks so much for the comment and sorry for the long over due reply back.

 @Brad Cogswell sorry for the late reply. Full time job, family and real estate can get person busy.

Yes the expenses  are on the low end. Part of the deal is that my partner will be doing all the leasing and management which definitely cuts the costs. I will review my annual costs to double check. Thank you very much.

Thanks for all the good tips @David Fernandez and @Brad Cogswell. The property is in Old Goucher and Charles Ville area. I just visited it yesterday. The area is nice, close to Remington. My partner thinks that there will be appreciation. Lots of new stores have opened up close by. Bottom line it's in a decent area. 

As for billing tenants back. The building has base board electric heat, it's terrible. If we want good tenants we need to offer a nice apartment. We must upgrade. The actual rehab per apartment is 5 to 7k. I was surprised it is in decent condition. The big expense is metering for gas and electric which will be 13k. If we buy for 230 plus worst case scenario 100k rehab costs total 330k all in. NOI 38k gives me a cap rate of 12%. The numbers make sense but it's a large job honestly I am a bit nervous.

 Any thoughts?

@Nathan McQueen thanks for the advice I am definitely going with regular furnaces 

Hi Fellow Big Pocketer's,

I am looking at a 4 unit in Baltimore city around John Hopkins area. Selling for about $230K range. Truthfully he will let us assume the current mortgage of $230K about $1500 per month. In the end it is a sale for $230K, we might bargain with him a bit, tops off would be 20K.

Sounds great. So here is the catch the building is 75% vacant. Plus it is so old it does not have separate meters for electricity. So basically we need to do over each unit. It could take up to $40K per unit to do them over nicely . So we would be all in for $350 about 88K per unit. We are looking to get 1K per month per unit. It will pass the 1% rule per unit.

Does anybody think this price after all expenses is to high ?

Also to keep costs down we want to avoid running gas lines to each unit and install heat pumps.

Is electric heat pump not base board except able to tenants in that area ?

Would a electric heat pump stand up to a Baltimore winter ?

Any information or advice would be extremely helpful. Thanks in advance to everybody.

Congratulations on your new property @Reggie Jackson. I am no accountant but I believe that if the property is your primary living area you can not claim write off on your taxes. Ask your accountant anyways he or she will know for sure.