All Forum Posts by: Dan Shelhamer

@Garrett Quathamer great question!  

So we actually bought the house in cash and paid for the rehab in cash. So all in, we are just over $81,000. If it appraises out for $100,000 and we get a loan at 75% LTV (mortgage would be $75,000), we would only be in the deal for the difference of the $81,000 - $75,000 = $6,000.

I believe you are right though in your scenario, if I were to finance it right away instead of paying all cash, I would have more money left in the deal.

Scenario:  If a prospective tenant was evicted due to not paying rent, but now they are on a Section 8 housing voucher, do you make an exception or look at this any different than a normal eviction?

@Andrew Syrios thanks!  Loved you and your brothers podcast.  Very inspiring!

Going to definitely read Getting Things Done.

@Minh Nguyen I actually found this one on the MLS with my realtor. We had agreed on $45,000 with the seller's agent, and I signed the contract. That same night, before the seller signed the contract, their agent reach out to my agent. They said "we received 2 more offers, and need your highest and best". Pretty shady but long story short, we came up about $5k to get the house but were not happy with how everything went down. However, the numbers still worked at that point so I was happy to just get it under contract and move on.

@Russell Holmes thanks for the kind words! I like what you said about the contractor, and that me having worked with him before counts for something. I never looked at it like that before. I will be sure to update this post once I get the financing on the house, and good luck to you on your first BRRRR!

@John Acheson have you considered doing a house hack?  I would recommend looking for a 2-4 unit property that you can get with a 3.5-5% downpayment, live in 1 unit for a year while you rent the other ones, and then move out and have all units rented out.

@John Acheson I first discovered BP about 3 years ago. I spent about 9 months reading everything I could get my hands on and joined a local REIA group before I felt confident enough to jump into rental investing. Currently, I have 5 other rentals in this same town so I felt like I knew the numbers on comps very well. It is a low income blue-collar town, but the crime rate is also very low which was appealing to me.

I have family in Southern Cali, so I definitely know these numbers are probably not realistic on either coast and certainly not in California. I think BRRRR is possible in California, but you definitely need to have a good idea of rehab costs and make sure you leave some cushion because it always goes over budget and takes longer than you had planned.

Also, one thing I could improve on going forward is to get multiple bids.  I had worked with this contractor for 6 months on my other properties and felt comfortable using them on this project.  However, you give up a lot of leverage when you don't have different bids to compare against each other.

I just finished my 1st BRRRR deal! None of this would have been possible without Bigger Pockets!

Breakdown of the numbers:

• Purchase Price: 3 bed/1 bath/850 square feet.Listed at $75,900, negotiated down to $50,250
• Rehab: $31,433 (leveling sub floor, vinyl floors, drywall, doors, cabinets, bathroom, re-glazed tub, new toilet, new glass block windows, paint, removed a door in the master bedroom and closed off with drywall)
• All-in: $81,683
• Expected ARV:$95,000-100,000

Planning on refinancing after 6 months of seasoning at 75% LTV. Will only have $5k-$10k left in the property when it's financed.

Today is my 1st showing to get it rented and I have 8-10 people showing up.

Rental #’s:

• $1,350 for rent
• $318/month cash flow (factoring in 8% for PM, even though I am managing it)
• 51.35% Cash on Cash return (based on $95,000 appraisal)
• 191.64% Annualized Total Return

I have been investing in Real Estate for just under 2 years, and the moral of the story is ANYONE can do this! It just takes a willingness to learn (Bigger Pockets) & then take action! Already looking forward to my next one! Please let me know if you have any questions as I would love to help others who might be trying to break into buy & hold investing or their first BRRRR!

I am currently self managing my properties, but as I scale, I know that won't be a possibility at some point.  Does anyone have any recommendations on property management companies in the Northern Suburbs of Illinois (Lake County)?  I would like to start speaking with a few of them and seeing how they operate. 

Also, for those that use PM's, what are some good questions to ask when interviewing them? 

Thanks in advance!

Chad Lanting I would either go the BRRRR route or look into doing a 2-4 unit with a low down payment 3.5-5% and live in it for a year and then move out and have it fully rented. Great way to get started with very little skin in the game.