All Forum Posts by: Ian Kisbert

After speaking with my local bank, I am able to qualify for a $25k personal line of credit at a 13% adjustable rate. Has anyone had experience using a personal line of credit when creatively financing deals? My thinking was that this gives me the ability to deploy more capital of my own at a rate that I would probably be paying for hard money anyways. I know $25k isn't a whole lot, but I was thinking of using this as well as money that family has offered to lend. Also, by using a personal line of credit, will that hurt my credit when applying for my own mortgage on a personal home? I'm planning to BRRRR so theoretically this would be paid back in 6-12 months, but just want to make sure all my bases are covered.

I'm trying to make sure I have multiple exit strategies when running numbers on potential BRRRR deals and want to make sure the strategies I'm looking into are possible.

This might be lender dependent, but if I use hard money and I find there might be a better return with a flip after the rehab has been complete, will a hard money lender allow the loan to be repaid sooner than a 6-12 month term that would have been originally agreed upon based on trying to go the BRRRR direction?

If I do more of a cosmetic rehab and use a normal loan, will that lender allow the loan to be repaid sooner than 6-12 months if that deal makes sense to flip right after rehab?

Pretty much want to make sure I have the ability to flip a property if I need to. I know even a failed BRRRR can result in great returns with little money into it, but I just want to prepare for any scenario.

Hoping to start my first BRRRR and had a question about the timing of getting bids for the rehab and really the process in general. Once I have run numbers on a deal and have put it under contract, I plan to have a home inspector take a look at the house to add to any items that I may need to add to the rehab scope of work. Is it also common to have contractors bid out the work while under contract, or even at the same time the home inspector is there, in hopes that as soon as you close, numbers are set and everyone can start work day one? Is it also common to share the inspection reports with the contractors to have them make any recommendations off those findings and adjust accordingly? Once you have your inspection report and bids, if things are much farther off than anticipated or big unknowns come up, would it still be ok to back out of the deal?

@Taylor L. thanks for the response.  I would think using the security deposit to go towards move out damages is the way I would proceed, so with that said, how would you add this to a proforma?  Would this be a capex line in which you just add "turnover costs" and take a certain percentage of the security deposit on hand and put it towards that assumed cost?

After doing some digging on RUBS, it does seem like most properties in my market are billing back RUBS.  With that in mind, can you start billing this back day 1 of operating, or are there steps that need to be implemented that take time, or any legal implications of giving certain notice to tenants since it is a new charge?

Doing a little digging on down time too, it seems that my market is relatively hot right now so downtime is rather short.  I think depending how much work is needed, and how much time that work takes will determine if I need to outline a monthly detail, or if I can start a year one very soon after renovations are complete. 

Thanks again!

I am a new investor trying to dial in my proforma so I can start analyzing deals better and I have a few questions about where to add certain items.  I am looking for 2-4 units with a value add component to the deal.  Any help is very much appreciated.

1.  Where do I add security deposits, (under income, expenses, or turnover costs)?  Does this get factored into vacancy at all, or possibly somewhere else if there is a value add component to the deal and current tenants will be vacating and get replaced by higher rents?

2.  Utilities - if a property is showing that the landlord is paying for all utilities, how much can be passed back in RUBS, and how quickly can this happen?  Would it be safe to assume about 80% of water, sewer and trash can be passed back as RUBS income right after you close on the deal, or does it take time to implement.  Also, can gas/electricity always be paid for by the tenant, or are separate meters necessary to do this?

3.  Renovation costs - If the deal is requiring renovations to be done, would that be added to year 0 capex, then year 1 starts as soon as the renovations are done?  If this is the case, would you add higher assumptions for vacancy in the very beginning of year 1 in case it takes a while to fill the units that were just vacated due to the renovation?  

https://www.dropbox.com/scl/fi...

Excel is attached.  One question I did have - is it typical to use your year 1 cash on cash as the main return metric, or do you use an average of the cash on cash throughout the hold period as the main cash on cash figure?  I am also curious if my make ready costs are in the right place and the returns are pulling it into consideration in the correct ways.  Any feedback is very much appreciated!

New investor here - I have been putting together a proforma template to start analyze deals, but wanted to see if someone with some success could possibly look at it and tell me their opinion.  I think I have captured all of the inputs I will need as well as the returns I would be looking for, but would love another opinion as to what I may be lacking or if there is anything that might be smart to change.  I am currently looking for 2-4 unit deals if that helps when looking at this. Thanks!!