All Forum Posts by: Alex D'Anjou

Hi All,

I own a few rental units in the Boston area and I recently came across an apartment building (16 units) that seems to be a good deal. I know nothing about investing in buildings this large as the largest I own or have owned is a 2 unit duplex. Can anyone point me to a good guide or advise on any major differences in this type of investing? 

Thanks in advance!

@Greg Kasmer Thanks for the advice. I'll look into ROE.

@Dan Weber@Andrew Postell I replied to both of you but the "@" thingy didn't work apparently. Just calling your attention back to the post here.

@Dan Weber Hi Dan, thanks for the reply.

You mention what do you want to spend your time doing? Can you clarify what the two approaches entail?

Thanks!

@Andrew Postell Hi Andrew, Thanks for the reply.

IRR can be explained here https://www.biggerpockets.com/blog/2014-07-08-irr-use#

The long and short of it (to my understanding) is that IRR is similar to CoC ROI but it takes into account the time factor. So what if you had taken your money and used it elsewhere over whatever time-frame you choose.

What I've seen is that with BRRRR, you're doing a reno up front and therefore adding a ton of value right upfront and after that you are just spreading/diluting that equity when you hold it longer over time.

Hence my original question, how do BRRRR investors justify and make the argument to hold the property instead of just flipping?

Hi All,

Question from a newbie here on the strategy of BRRRR vs Flipping.

My wife and I bought a condo in Metrowest Boston in March 2020 for $132,000 in cash, rehabbed it for approx $20,000 and its current value is approx $200,000. It is currently renting for $1,800 a month. When we bought the place, we intended to just rent it, not flip it. However, through BP, I found the IRR calculations and that shows that every year we hold the property we are losing IRR? Wouldn't that mean it would be better not to BRRRR and always flip from a pure money growth standpoint?

Currently looking at getting a HELOC on the property for $156k for use when/if we find the next deal but the IRR number has made me think maybe it's better to just sell it now with the hot RE market that is still here. How do other BRRRR investors view this? Why go one way or the other?

Thanks in advance!

Hi all,

My wife and I bought a condo in metrowest Boston in 2020 just as covid was starting and I'm now trying to check up on my actual investment return and need some help calculating my return and potential suggestions on what other numbers/calculations to look at.

Specifically (but not limited to), I'm trying to figure out my COC ROI. Given this is a BRRR what I'm unsure of is now that I'm ready to refinance, I can get $164,000 loan (Which means I get all my money out + $14,000, which is great!) but that means my COC ROI doesn't calculate properly because it is a negative number. Any ideas on how to handle this?

What other metrics should I look at? I've heard of IRR but not entirely sure how to run the numbers on it.

Quick parameters of the deal:

2 bed, 1 bath, 770 sq feet.

Purchase price: $132,000

Repairs: $18,000 (roughly) - New kitchen, bath, flooring, and paint - most work done by me directly (not paying myself)

Total Spend: $150,000 (all cash)

Current property value (with crazy covid house value price hikes over the past 2 years): Approx $205,000 (YAY!)

Property is now what I consider a Class A- property in a B+ location. (the town it's located in is pretty suburban so not a ton of demand for rental units (and not a lot of rental units available) but good schools, great community, super safe, and the lack of rental units actually creates enough demand.)

Rent: currently $1,600 per month with tenant leaving end of April. This is below market as they are friends who needed a place to stay while renovating their own house. Expect to raise the rent to market $1,900-2,000 for the next tenant.

(Note: Mortgage is not currently active as I haven't closed on it yet but I put in payment for analysis purposes).

Any help and/or suggestions on what to look at would be appreciated!

@Bill B.@Lori Williams@Laura Marks

Hi all,

Thanks for the responses! (this was my first post on Bigger Pockets).

So it sounds like it's very possible to raise the rent on a section 8 tenant at the end of the lease, but both the housing authority and the tenant need to agree on the new rent. Otherwise, it's up to the tenant to find a new property to rent if they disagree with the rent increase.

Any issues with Section 8 renters and asking them to vacate? Do they get any special protections beyond just standard/formal notice?

Thanks!

Hi All,

I'm in the process of buying a multifamily that has an existing section 8 tenant in place. The unit she lives in is a 3 bed, 2 bath. She has been living there for 21 years paying $1200/month for that ENTIRE time. She has never seen a rent increase in 21 years. Why, I do not know.

Question: The HUD payment schedule for my area says a 3 bed runs (up to?) $2625 per month. At the end of this tenant's current lease can I raise the rent to $2600/month?

Thanks in advance!