All Forum Posts by: Dave Vona

Hi @Maxwell MacVeety, I live in Denver, but I'm attempting to invest in Omaha. I purchased my first BRRRR property last year, and I'm looking for additional properties now. I think it is a strong market and has seen population growth of around 1% per year, for the last few years. Let me know if I can provide any other information.

@Jeffrey Dorman You may want consult with a property manager as well.  They can give you some input on what the rent would be for different levels of rehab.  

I made the mistake of not vetting my contractor on a recent out of state BRRRR. It wasn't a very large rehab and I was getting inpatient due to other delays, so I quickly decided to use this guy. The contractor would sending me a couple of photos, but not of everything I asked. Finally, I flew out there and found he had only completed about 25% of the work, when he had been paid 75%.

I plan to continue with a few smaller projects until I find  good contractor and feel that I have good systems in place.  

Since you've already purchased the property that requires a major rehab, I would ensure you have the PMC checking on them regularly, have the contractor send as many photos as possible, and schedule a few trips of your own to visit the site.

Hi @Billy Farley, a bank will determine whether you qualify for an LOC, but there isn't any reason you can't use a business LOC to invest in BRRRR's. I have my own, single-member, LLC with an LOC, and I have a partnership LLC that also has an LOC. I've used both of these LOC's to invest in flips, and I plan to now use them to BRRRR. I completed my first BRRRR earlier this year and had enough cash for the purchase and rehab, but the LOC's are available when I need them.

I'll be performing the BRRRR within the single-member LLC, so that will be my primary LOC. However, I confirmed with my attorney that I can also borrow from the partnership LOC if needed.

@Harshdeep Gupta I completed my first out-of-state BRRRR earlier this year. I purchased the property from a wholesaler, but I was working with a real estate agent who was then given the keys. Even though I had to pay the real estate agent a commission, it helps to have someone there that can coordinate these details. I ended flying out there shortly after close and put the new lockbox on, but that wasn't required.

I could have also had my property manager receive the keys, and I think I'll involve them on the next property so I don't necessarily have to make another trip. Even if you're going to BRRRR it helps to get a property manager involved right away. They can take care of mowing the lawn and shoveling snow in the winter. Mine was also able to meet contractors at the property if needed, although many were able to just use the lockbox. They can also provide input on what rehab you should perform in order to have the place ready to rent.

There's a small monthly fee (mine was $35/mo) for the property management administrative costs prior to renting.  There is also a cost for them to visit the property and do the mowing/shoveling, but you would have to find and pay someone anyway.  My place needed space heaters since the furnace was not working yet, so the property manager placed these in the house.  Mine also handled the final make-ready work and the cleaning, so they can do more than just manage the property after it is rented.  It's really good to have someone providing input on what rehab/improvements are needed to get the place rented for the most $$, that's what the property manager can do.  

@Khaled Morad Do you offer 80% LTV cash out refi's by holding on to the mortgage, and not selling the loan off. I know Fannie Mae and Freddie Mac have 75% limits on the cash out options for SFR's (70% for 2-4 multi-family). I ask so I can talk to my banks more intelligently next time I do a BRRRR. Thanks.

Hi Erik, hope you're doing well in Tampa, it wasn't a great week down there.  

I refinanced a BRRRR property in Nebraska back in June, and 75% LTV was the highest I could find.

Andrew, I appreciate the reply.  I started reaching out to plumbers, and they usually can provide 24 hour turnaround on a sewer scope, which is what I need for these wholesale properties.  Some of the properties are under contract within hours, but everyone is in the same position and maybe they are willing to take that risk.  Like you mention, if I decide not to inspect the line, I should at least include enough for replacement in my rehab budget.  

I also found inspectors that will perform a risk assessment on electrical, foundation, and mechanicals.  They can turn these around quickly as well.  I can get a contractor to do same day quotes, but for some of these other (expensive) systems it may be worth having a second set of experienced eyes to take a look.  Thanks.  

I recently completed my first out-of-state BRRRR. I purchased the property from a wholesaler, so I wasn't able to perform an inspection or sewer line scope prior to signing the contract. After closing I had a sewer scope performed and discovered a new cast iron line would be required. Once they started the work, the plumbing company found that the other branch lines in the basement also needed replacement. The total job ended up costing around $11K.

I probably should have included some rehab budget for the sewer line since it was a 1915 property. I was wondering how other people are accounting for a potential sewer line replacement when purchasing a property? If it's earlier than a certain year, do you always include an extra $10K in the rehab budget? It seems this could kill a lot of deals by making the rehab too expense for a BRRRR to work.

Fortunately, by the time I completed this property I was able to rent for more than I originally used in my calculation, and ended up cash flow positive after the refi.  But, I don't expect to be that lucky on every property.  I appreciate any input.  Thanks. 

Hi, I recently purchased a rental property in Omaha and I'm looking for a handyman or contractor to help get the property in rental condition.  I've completed all of the mechanical updates.  Now I'm looking for someone that can replace carpet, paint, landscaping, even frame in a basement bathroom.  

Thanks,
Dave