All Forum Posts by: Justin V.

So, I think this the best place to post this, as it's a starting out question...

Here's the situation: I'm just getting started on the BRRRR route (I've done turnkey in the past, but I want to see if I can get higher returns through BRRRR), and I've reached out to a bunch of wholesalers, am on all kinds of mailing lists, have bookmarked all kinds of websites, and am working with a realtor to help me scour the MLS.

So far so good.  I've identified a couple opportunities, and they seem interesting.  Whether or not they're good depends entirely, however, on how much in repairs are needed.  And that's where I've run into the problem: how do I get a reliable or semi-reliable estimate of the repairs needed?

I've thought through a couple ways below, and have identified the issues I see with each:

1.    I go and see the property myself, and I estimate the repairs.  There are two problems with this approach:

First: I know more or less nothing about repairs.  I'll learn over time, of course, but right now I'm no better than randomly guessing the repair amount.  

Second: I'm investing out of state :/. Combined with #1; this is the deal breaker. The ROI on flying me down to the area to just guess randomly at repairs is awful. This option's out.

2.     My realtor takes a look, and estimates the repairs.  Two problems with this approach:

First: My realtor does have a sense of how repairs cost, but he's still not an expert.  So we've reduced the margin of error, but it's still decent.

Second: it's really not clear that my realtor will want to do this; what's in it for them?  Some of these properties are wholesale deals; we're talking 10K upfront.  I'm probably going to have to throw in some money on an inspection by inspection basis to make it interesting for them.  Or do something, I don't know.

3.    My contractor takes a look, and estimates the repairs.  This has the advantage of going to the expert directly, but:

First: It's really not clear to me that my contractor will want to do this on a speculative basis.  If I have a real deal for them, yes, of course.  But if I need them to look at a bunch of houses, they won't want to do it unless they're somehow getting paid for their time.  Which...as I type this, I'd probably be willing to do.

Second: if they're available.  They're pretty busy, and probably not available to swing by properties all the time (and properties move fast, where I'm looking).

4.   I hire an inspector do an 'inspection lite'.  I don't need a full written report at this point; I just need someone to kick the tires and give me a rough estimate of repairs.   This has the advantage of using an expert, but has the slight disadvantage that these are estimates, not quotes.  Still, I can be fairly confident that they didn't miss any major issues.

Having typed this out, I'm leaning toward 3 and 4: having a conversation with my contractor and seeing if they'd be willing to give me estimates for a small fee, and if they're not available, talking with a few inspectors and seeing if they'd be willing to do the same.

What do others think of this approach?  How do you do it?

@Dan Krupa Thank you! After doing more research over the last couple of weeks, I think I've settled on the Independence and Raytown areas for now.

@Cara Lonsdale - sorry for the delay in responding.  Answers to your question below: 

> How did you decide on Kansas City, and which property?

In short: I was interested in an area that had good cash flow, but also some chance for appreciation, and Kansas City seemed to fit those requirements.  Is it the best area in the whole country?  I don't know; I doubt it.  But best probably changes every few years, and I figured it would be better to just pick a place rather than spend too much time analyzing geographic areas.

> Did you go through a turnkey website? [How did you pick the property] 

Sort of.  I actually went through Norada.  PM me for the details on my experience, but I found them valuable as a kind of turnkey real estate agent.  As for how I picked the property: I ran the numbers and picked a property that was in a low crime area.

I hear you on being leery of the turnkey property websites, but I think the best way to deal with your concerns there are just to verify the turnkey provider's claims and work: before you buy, have an independent inspection and appraisal report.  The appraisal will let you know you're not being cheated*; the inspector will confirm you're not buying a stinker.

* You're buying retail, so you're not going to get a deal, but the appraiser will run property and rental comps that will confirm that you're not over paying for the market and that you're not at risk of the rent ending up way low.

Thank you, all!  @Kim Tucker - that's great advice, thank you.  It's looks like I'll be able to make the January meet up, so hopefully I'll see you there.

Good morning BP!

I'm a newish investor looking to invest more heavily in Kansas City in 2018 - I bought a turnkey there this year, and so far it's going fine, but I'm looking for higher returns and will try the BRRRR strategy next year. So far I've got a lender, PM and GC lined up, but I'm just starting to talk to realtors, so if anyone has any suggestions, I'd love to hear them. (Piggybacking off of Gerry's post, Matt K, would it be ok if I reached out to you? Also, not sure how to do mentions with this system).

Beyond that - I live in the Bay Area and also have a turnkey in Memphis (through MidSouthHomeBuyers).  I bought my turnkey in Kansas City (Raytown) from Timothy Stauffer, and my current property manager is Voepel Management.  I'd love to meet up with anyone who's investing in Kansas City, either here, or in Kansas City (the next time I go down there; probably in January).  Also, you think there's anything I can do to help you (such as if you're curious about any of the the previous) please let me know.

Edit: uh, to be clear, I am _not_ asking for a mentor.

- Justin