All Forum Posts by: Josh Baker

On a positive note the property already has great cashflow, I'm more concerned about the ARV and whether I can recoup my investment during refinance.

@John Warren thanks.  I am paying others to help.  Agree that the cost per square foot is highly dependent on the initial condition and the intended final condition of the home.  I underestimated the rehab costs going into this buy and hold deal. In hindsight it would have been helpful to have this spreadsheet set up prior to my first walk through.  I used a rule of thumb to estimate costs, which I think is what most newbies would like to have, but it doesn't really work.  I might modify the spreadsheet so the material and duration estimates change when I enter a square footage so it takes less time to analyze properties.  Overall a better process for this would be to have a checklist when going through a house so the walk through is more of a structured activity.  

@David Robertson Thanks. Estimated labor costs are in the item column at the bottom under Misc. ($22464).  The costs on the right of the item column are all material costs except for the labor row.  Labor is calculated by multiplying the estimated duration in 8 hour days * hourly wage for two ppl $26/hr ($13/hr per person).

I will be starting a remodel of a duplex next week and I've put together a spreadsheet of estimated costs and durations for the various subtasks.  The home is 2000 sqft. and has an additional 500 sqft. partially finished basement.  I'll be working on it with one other person.  I'm estimating about $74k in costs and 108 eight hour days to complete.  That is around $30 per sq. ft.  

Looking for feedback on my estimates.  Feel free to tell me they are way too high lol!  The order column is the order in which we plan on completing the tasks.

@Eric C. True I should dig into the STR operating expenses. I'm inclined to go STR on all four! I'm in the Midwest in a hot area. That jump from $210 to $299 in one year is crazy though. The house is not rehabbed.

@Jason DiClemente Thanks. I should also note it has been on the market for 90 days. The attic is unfinished and there a few other areas I can force appreciation.

Looking for some advice on a potential deal. Specifically I’d like to know how you would present the offer I have in mind based on the information below.

I am a newbie.

4 unit class B multi-family in a class B location (close to downtown)

List price – $299k. The price I have in mind is $271k

Comps are $250-300k

I'm house hacking this one so I can use FHA.

Current rental income is $2800 / month for all four units. All of the units are currently rented.

I plan on raising the total rent to $3400 (it is currently under priced)

I plan on putting $5-10k into rehab

At the $271k price I’m looking at an estimated -$26 cashflow loss while my wife and I are living there and a $355

cashflow gain when we leave.

$391 doesn’t seem like much so I may put one or two units on AirBnb. Similar units in the area typically pull in $500 more per month on a short term basis vs. long term

The seller purchased the house 1 year ago for $210k

I’m inclined to offer $265k and see if the owner counters. I’d also appreciate any feedback on whether this is a smart first deal.