Originally posted by @Van Blackman:
@Bryce Sablotny
Good morning, sir! Hope you're well.
It say's the total cost of the project (price + closing costs + repairs) is $237,500 and your after rehab value is $220,000.
I definitely wouldn't recommend starting off with negative equity in your project.
You'll want to buy homes in the 105-115k range (or lower of course) for a deal like this one, if you can.
If it needs that kind of work, the deals you're looking for are out there. You may need to search a little harder for a little longer, but they're "find-able". We're buying homes all over Chicagoland right now. Trust me, they're there!
I'm not sure this is the best deal for you, or anyone, sir.
Just my two cents.
Hope this helps!!
Van, thank you for your insight. We analyzed this property and made a low offer so we could get in negotiations. We gained access to all 4 units and found the Hvac system needed to be redone. The system in use had pvc pipes coming from the attic to provide air for each room... That was a first for me. Some units had cat piss and smoke smell in them so the floors and possibly sub floors needed to be done. The kitchen cabinets had not been replaced (but were painted white) since it was built. All new paint throughout. I will continue my search and try to create a deal. My goal with asking for help to analyze these numbers was to fully understand how much and why to use the percentages for variable expenses (vacancy, cap ex, repairs, management). I know now that accounting for management is a must. All of these responses have been super helpful.
I want to understand the BRRRR strategy more so I will do some research. When the best time to use BRRRR. For what properties and situations it is most useful.
I'm glad you and your team are killin it up there in Chicagoland. Thank you so much again for your insight.