All Forum Posts by: Jason Zhang

Newbie investor here. My understanding is that there are ABCD class properties, and also ABCD class neighborhoods. You can have D class property in a A class neighborhood. Class of properties depend on their condition, I doubt there are strict guidelines...I guess a totally rehabbed house would be A, and a crapy ugly disgusting property would be D, everything in between are up to interpretation. 

In term of class of neighborhood, I suppose a low crime, good school, wealthy, amenity rich communities like Georgetown, northern arlington would be an A. High crime places which often mention in news would be a D. Places where gentrification is taking place is blurry, often block by block. Hope this helps. Different opinions are welcomed.  

Thank you for sharing!!

Originally posted by @John Leavelle:

Howdy @Jason Zhang

It is not as impossible as you may think. Just because the ARV/Market Value is $400K does not mean your Refinance loan will be that amount. As @Christopher Phillips pointed out the Lender will be providing a loan that is 70 - 80% LTV. 70% of $400K is $280K. If you can purchase a distressed property at a significant discount and maintain a solid Rehab budget you may not need the whole $280K.

Example if you Refinance @4.5% APR/30yr your monthly P&I payments could be:

$280K is $1,419

$250K is $1,266

$200K is $1,013

If you purchase for close to $200K or under and can limit the Rehab to $50K then it may be able to provide positive Cash Flow. Most BRRRR deals tend to end up with lower Cash Flows after the Refinance.

 Thanks John. Very good point!

Originally posted by @Christopher Phillips:

@Jason Zhang

BRRRR isn't buying at retail prices. BRRRR is buying at heavily discount prices due to the condition or motivation of the owner. Then rehabbing the property. Renting it out. Refinancing it to get your initial investment back out. Then repeating it.

https://www.youtube.com/watch?v=B9MVEg0LI1w&t=49s

 Sorry I wasn't clear. I meant the retail price would have to cash flow. Otherwise when you buy at discount, fix it up and refinance at retail price, then it won't cash flow...

Newbie here. I'm been looking for deals that I can implement the BRRR strategy. Correct me if I'm wrong...BRRR will only work in a market where people can buy retail and still cash flow? Because it assumes refinance at the new appraisal value, which is retail price, to get my investment back. That being said, if market retail price is 400k, market rent for that is 2000/month.. I can't really refinance out what I put in..

J Scott good point.. thank you!

I'm preparing myself to negotiate with a landowner. He has paid to do an appraisal. However, it's vacant land, which is very subjective. I know what I'm going to get selling the finished pad, and how much to develop. The land price I can afford is about 1 million below the appraisal. I'm wondering if anyone has encountered that before, and any tips and thoughts on negotiating are welcomed! Thank you!!

@Account Closed Also a friendly reminder that vacancy is not in your equation... 

@Account Closed Thanks for sharing the numbers! I love Arlington, but the cash flow is not quite where I want it to be. Especially I'm very conservative with my numbers such as factor in Property Management, 20% down, ect. As long as you can make the numbers work it's great. It's funny that you live in MD but looking in Arlington, and I live in Arlington looking for stuff further out. 

BTW watch out for the condo fee increase if it's not on your list...my unit in Arlington just increased by $40...gotta check HOA financials as part of the due diligence.

@Stephanie P.@Victor Evans@Robert Fountain ... Super helpful points! Thank you!