All Forum Posts by: Anton Ivanov

@Steven DAmbra

Like Henri pointed out - Google "COUNTY tax assessor" or "COUNTY tax collector" for the property you're interested in. Every county in the US has a public website that you can search to pull up previous tax bills for that property. Each tax bill will have the owner's name an mailing address.

You can try to google their name + address in the off-chance something will come up to get their phone number.

As far as finding an accurate ARV - this is challenging and would typically require you to look at comparable sales for similar properties in the same area in the last 6 months or so.

@David Olson

I think so, I looked over the screenshot and don't see any glaring errors. Just make sure all of the numbers you're inputting are correct and I would do this a few times for different properties until you feel comfortable.

Also, what helped me when I was starting out is actually go through the math (at least some of it) with a calculator and just understand how it's calculated. If you don't know what some of the terms mean (like cap rate, ROI, etc.), search up at the top and there will likely be a blog post that goes over the formula in detail.

@Max Keller

There are better ones out there, but it's a good starting point.

@David Olson

No, the purchase price is just that - the purchase price. On the second tab of the BRRRR calculator, scroll down to the section titled Purchase Loan Details. That's where you need to enter the hard money loan details you're using to buy and rehab the property.

If I'm reading your sheet correctly, here is what you should put in the calculator:

Purchase Price: $110,000

After Repair Value: $175,000

Purchase Closing Costs: $0 (but could include finder's fee, inspection fee, etc. if you have any)

Estimated Repair Costs: $32,000

Purchase Loan Details

Cash Purchase: no

Down Payment: Click Provide Actual Value

Enter Loan Amount: $122,500

Interest Rate: 11.99%

Points: 3%

Other Charges From Lender: $6,667.50 (can also be entered under Purchase Costs above instead - but not in both places)

I don't know the answers to the rest - those will depend on the exact loan terms they're offering you.

The next section is "Refinance Loan Details" - I think you've already filled it out. This should include the hypothetical long-term (conventional) loan you will use to refinance into after the rehab work is complete.

@Matt B.

1. Closing costs will depend on the purchase price of the home and the escrow company you're using. High home prices will drive up things like title insurance, so there isn't much you can do for that. You can try shopping around for an escrow company instead of using the first one you find - often you can find some that do things cheaper.

2. I think @Andrew Kerr was spot on here - all of these numbers are highly dependent on the city/neighborhood (A/B/C/D) and the hose (size, age, etc.). It's very hard to give general estimates that would work in every situation and I would discourage anyone from doing that, in fact.

I'm not surprised that you're finding it difficult to find properties with strong cash flows in the Northeast. For the most part, those coastal markets are expensive, with low cash flows.

@Kathy Evert

It sounds like since you're looking at an existing purchase and trying to estimate closing costs for the next purchase - they will be similar?

Your origination/prepaid interest/loan points may change if you're getting a different loan or interest rate.

The title/escrow charges should be relatively the same if you're buying a similar property through the same escrow company.

How much is taken for your initial escrow/impound account will depend on how much the insurance and the property tax bill is. I typically don't include this in my closing costs, when calculating it, however, since these are not real expenses - you will get this money back eventually.

You may want to add a property inspection fee and an appraisal fee to your total.

@Michael Garcen

You're not going to find a calculator that gives you the exact numbers you're looking for. The reason for this is that there are too many variables that affect your taxable income, your effective tax rate and your actual tax bill. Without knowing your entire financial situation and looking at your past and upcoming tax returns, it's unrealistic to calculate this number exactly.

Also keep in mind, that cash flow will be taxed, so that will potentially increase your tax liability.

@Rebecca Belvin

Some things you may want to do during escrow/closing:

• Get the property inspected by a professional inspector. I would suggest being present when this happens so you can see any issues yourself
• Get copies of current lease, operating statements for 2 years, any appliance/HVAC/Water Heater purchase receipts, utility bill copies from the seller
• Decide what you're going to do for property management. If you're going to use a property manager, you need to find a company, sign a management agreement with them and ask them to turn over with the current owner/property manager. If you'll be managing the property yourself, you don't need to do this
• Set up a property insurance policy for this property
• Review the title search done by the escrow company. Make sure there are no unpaid debts, property taxes, liens, etc.

After buying the property:

• If you're self-managing the property, introduce yourself to the new tenant (or send them a letter). Provide your contact information, the contact information of maintenance technicians you'll be using. Also send them your new direct deposit information or instructions for sending the rent. If you'll be using a property manager, they should be doing all of the above for you
• Set up a system of keeping track of accounting, maintenance scheduling, random miscellaneous items
• Make sure you receive a signed copy of the deed from the escrow company

@David Olson

You didn't enter the loan amount. If you look into the Acquisition section, it's listed as $0, so it's assuming you're buying the property with cash from the get go. Go back to the first few pages of the calculator and enter the hard money loan amount you'll be using for initial purchase. That's the way BRRRR works, you buy a property with hard money (or private money), rehab, refinance and rent it out.

@Edward Kiser

To second what Scott pointed out - if you're buying at market value (paying about how much the home is worth) and putting 0% down, your initial equity in the home will be $0.

There are two ways you can build up equity - the first is loan pay-down. As you pay off your loan, a little every month, your equity will increase. However, it will take many years to get to the 20% equity this way that you will probably need to refinance out of the VA loan into a conventional mortgage.

The second thing you can do is improve the property to increase it's market value. This of course isn't guaranteed and you need to carefully consider how much the property value will increase after any upgrades you do.

If the property value appreciates over time by itself, your equity will also increase.