All Forum Posts by: Chris Risi

@Chris Seveney thank you for the help i really appreciate it!

Hey Lee, definitely super helpful! I really appreciate it. Clears it up for me now. 

Hey thanks Aaron! Appreciate it

Hi Guys! I do flips in Los Angeles and Phoenix and I'm trying to use the BRRRR Calculator to analyze some deals. Does anyone know the variables that effect the Cash on Cash NOI calculation the most? Like increasing rents, decreasing monthly costs, etc...

Thanks!!

I was using the BRRRR calculator and wondering: what are the biggest contributing factors to the Cash on Cash ROI calculation? Say it is 8% but i want to get it to 10%, what areas should I focus on to get that increase?

Investment Info:

Large multi-family (5+ units) buy & hold investment in Phoenix.

Purchase price: $311,000
Cash invested: $10,000
Sale price: $344,500

This one was a lot of heartache, and thankfully made a little bit of money in the process. Originally it was planned to be the first in a portfolio of long term rentals, but ended up having too many difficulties and wanted out.

What made you interested in investing in this type of deal?

I originally wanted to buy this because so many real estate investors talk about small multifamily being a great asset to have. The key is having the RIGHT multifamily. This one was a long distance investment for me, and the property manager that came with the property was really terrible.

How did you find this deal and how did you negotiate it?

Found this through MLS.

How did you finance this deal?

A partner who used a HELOC.

Lessons learned? Challenges?

Lesson learned on how important good property management is and good tenant screening! It was a rough property in a rough neighborhood, and as Brandon says, this will produce "rough renters."

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Purchase price: $189,000
Cash invested: $35,000
Sale price: $293,000

This was a wholesale property that I found from an email list I'm on. I was EXTREMELY hands-on with this one and had a lot of sweat equity in fixing the place. This was one that I managed 100% on my own, and thanksfully found a hands-off investor who believed in the deal.

What made you interested in investing in this type of deal?

It was my second fixer project. My goal and strategy has been to do a few of these to try to build up a bit of cash to start investing more in rentals.

How did you find this deal and how did you negotiate it?

This was a cash wholesale deal that was sent out on email to me from a wholesaler in AZ. There was no negotiating on this one. Just a "buy it now" price.

How did you finance this deal?

Partnered with a cash investor.

How did you add value to the deal?

I added value by remodeling the whole place. I didn't need to add square footage with this one. I was able to buy it low enough that a cosmetic fix would still work financially. I also added value by doing a lot of the work myself with a family member. This way I was able to keep the budget extremely lean.

What was the outcome?

I learned a lot more about budgeting and construction because I was "in the trenches" with this one. I was able to make a good enough return on this one, and was able to be pretty accurate with rehab costs and ARV.

Lessons learned? Challenges?

The main lesson learned on this one is how much an ugly neighboring house can hurt the value of a project. If I hadn't had an ugly neighboring house, the sale would have been much faster and purchase price higher.

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Purchase price: $291,000
Cash invested: $150,000
Sale price: $535,000

Phoenix, AZ. First fix and flip. Spent a lot more time and money than originally budgeted. I learned a lot, and made a bit of money in the process! I encourage everyone to do good research, know your numbers, and dive into your first deal! You gain so much knowledge, experience and confidence!

What made you interested in investing in this type of deal?

I'm from a real estate family so I have seen my dad do tons of flips and development in my life. I worked in a lot of start ups and industries, and finally decided to dive in full time as an agent and investor! I was inspired by Bigger Pockets podcast and Rich Dad Poor Dad (like so many thousands of others). I decided I needed to dive in.

How did you find this deal and how did you negotiate it?

I found it through Arizona MLS. I was able to partner with someone who had cash, so we were able to buy cash and quick close.

How did you finance this deal?

Cash partner.

How did you add value to the deal?

Bought it undermarket, renovated the whole thing, and IMPORTANTLY added square footage.

What was the outcome?

More time and money spent, but TONS of learning and confidence from it, plus a bit of profit.

Lessons learned? Challenges?

The biggest lesson I probably learned is how to budget labor and materials. I also found that most of the time, using high end finishes and materials is not the most important thing in a home of this price point in this neighborhood.