All Forum Posts by: John Mullen

Thanks for the wisdom on this point, Myka. As someone considering whether to do STR, MTR, or LTR on my first investment property (rehab with biz partner about halfway done), I've heard some scuttle from BP podcasts (mostly On The Market) about differentiating your brand from the AirBNB platform mainstream. For example: https://www.biggerpockets.com/...

Also, to keep doing free advertising for BP podcasts, here's an episode of the main pod that I listened to today.  Good content about how to position yourself to survive the STR shakedown that will fold up less experienced/professional operators: https://www.biggerpockets.com/...

Easy for me to praise the insights before actually having to practice them, but the advice to capitalize on 1) Amenities (pools, hot tubs, game rooms, even pianos), 2) Uniqueness (themed houses, unique rooms, etc.), and 3) High host ratings certainly makes sense.  

Finally, here's a link to the guest's company website, from the episode immediately above: https://www.airdna.co/

Looks like some good free tools to estimate STR income potential city by city, and options to buy more comprehensive predictive data.

I can't speak as much to OK or AK, but Columbus is one of the few metropolitan areas in the post-Covid US whose downtown life has fully bounced back. The city also enjoys consistent annual population growth and ongoing large business activity/investment. I'm guessing you know this already haha. But that benevolent cycle, which is about a couple decades old, means that lots of neighborhoods are up and coming after being down and out for decades. I'll give examples South and East of Children's Hospital. Some neighborhoods in that area are fully gentrified (German Village), some are strongly in process/nearly fully there (Merion Village), and some are on the cusp and are currently a mix of flips/rentals and more dilapidated properties (South Side). If you position yourself on the outer edge of that moving path of progress, there could be opportunities for STR/MTR/LTR all in the same neighborhood, which gives you that desired strong pivot-ability. Hope that helps!

Thanks everyone for the thoughtful responses.  I’ve taken away some optimism on this topic and found some local investors to meet up with!

Thanks @Karl B.! 

Hey BP, a nagging question on my mind: are free in-person meetups dead?  The ones I find are either 1) small, 2) defunct groups no longer meeting post-Covid, and/or 3) sleazy pitch meetings.  Am I wrong?    

This won’t be a huge surprise (hopefully), but after hedging, qualifying, and sometimes obfuscating counter-claims in articles from the past couple years, it’s good to see Fortune confirming what common sense hinted at all along: the housing market run-up of 2020-present was significantly contributed to by investors large and small:

https://fortune.com/2022/06/26...

What do you think?  Case closed or something important missed?  

Actually just listened to an On The Market podcast episode where this came up tangentially.  Overall a super good episode; had a guy on named James Dainard who said (if I recall) that in this uncertain market he ensures that his deals have 20% more margin on purchase price before assessing flip profitability.  So if a 20% drop hits you, you'll still be ok.  Of course, he benefits from a well-run property discovery pipeline and a large wholesaler network, so it's easier said than done for the rest of us.  

https://www.biggerpockets.com/...

https://www.instagram.com/jdai...

https://www.youtube.com/c/Proj...

Thanks for the response, @David Robertson.  First I'll say that FlipperForce has already been useful to me, and it's a powerful tool.  Thank you.

To answer your question, in some cases I stuck with the FlipperForce pre-built price ranges.  But for most individual values I used google to check those numbers (mostly from home repair web pages/blog posts posted in 2021 or 2022, as recent as I could find them).  In some cases I wasn't sure whether the FlipperForce $/sq ft number already included labor, so adding labor on top of built-in costs could account for some discrepancies as well.  

Overall, I'm glad you can confirm that I was being overly conservative with my estimates.  I was attempting to build in buffer wherever I could to defend against my inexperience and the price hikes in both labor and materials that we've seen lately.  

Thank you for giving me your $/sq ft range, and I'd be happy to give the detailed estimate report.  See below:

Thank you @Kevin Sobilo for the detailed and helpful reply!  I bet someone has taught a course on this very topic, but I'm mostly working from books and google.  

I'm definitely going to adopt the % Confidence column idea to help quantify my range of uncertainty and see where the deal ceases to make sense.  

It's funny how in my day job I've been familiar with the "Time, Scope, Budget - Pick 2" way of thinking for a long time, but hadn't yet connected the dots to planning a rehab.  Thanks for helping me see that application.

Hey BP, I have a question for anyone with knowledge of Columbus (or central Ohio, or maybe even the Midwest more generally): how do you like to estimate your rehab costs when analyzing a BRRRR or flip deal? The options seem to be:

- Lump sum (not recommended for beginners like me)

- Price per square foot, with a sliding scale based on approximate rehab severity

- Itemized breakout: most detailed and time-involved but greatest potential for precision

The issue I'm running into with my business partner is that we're both too green to know how to accurately scale our numbers appropriately for 2022.  Ask google and you'll get answers like "the price per square foot to significantly rehab a property can range from $60-$150" and "the cost to replace a roof can range from $5,000-$25,000."  Not super useful or precise. 

To give some specifics, I recently got a trial membership of FlipperForce and practiced analyzing a 3bd/1ba ~1350 sq ft property needing full moderate rehab (re-roof, repaint, replace windows, significant detached garage repair, likely full gut inside).  I used $110/sq ft rehab estimate and compared against my best guess at a full itemized rehab list (I haven't been inside the house), which told me to expect to pay over $270k (including GC fee of 20% and rehab overrun margin of 20%).  I'm no genius, but there's no way either number in my comparison can be right... right?  (See detailed rehab breakdown below)

In a perfect world, I'd be able to just quit my day job and go to work for an established investor.  But as a first step, I'd welcome any constructive input on the following:

- How to pick an accurate price per sq ft to rehab, specifically in the Columbus/Midwest market?

- How to correctly itemize the big things (see list below)?

- How to accurately pick a GC profit margin?

- How to accurately pick an overrun estimate %?

Thanks in advance!