All Forum Posts by: Kerrick Long

That site seems to be down now -- is there a replacement that you have been using lately? @Ardie Mansouri @Lynne Hart

I'm curious how this turned out for you now that it's been almost two years. I know St. Louis City has some differences in how its Land Tax Sales work compared to the rest of Missouri.

I used rentometer and also made a spreadsheet of comps in the area, and that validated that not only is my $1,200/mo reasonable, it might be a bit low -- assuming I renovate to a nice level of finish.

I've also reached out to a real estate agent to help me run comps so I can figure out what the ARV might look like. I'm still looking for solid advice on figuring out how to get this number as accurate as possible, if anybody has more.

Thanks for the advice!

Thanks for all your responses! I guess I wasn't being clear when I asked how to get more confident in my numbers... I should have asked, "How can I get more accurate numbers?" :)

I'll definitely be talking with a local real estate agent to try to get a bit of a range for the ARV. How can I get accurate rent estimates besides talking with a Property Management company?

I've never done any real estate investing before, and I'm considering a BRRRR owner-occupied quadruplex. I've run the numbers and they look good, but I don't know that I've done them right. The acquisition price of the property seems really high in my gut, even though the numbers seem to work. Plus, the numbers I filled in for rent are way too uncertain for my comfort; I don't know how to estimate what post-renovation rent will be.

The Numbers:

Purchase Price: $85,000
Renovation Costs: $350,000 [Estimating high here due to structural damage]
After Repair Value: ?????? [No idea, shouldn't matter because I'm holding for cash flow]

HomeStyle Renovation Loan: 5% down ($21,750), 4% interest rate
Acquisition Costs: $4,000? [Guesstimating cost for detailed plans to close on a HomeStyle loan]
Loan Costs: $1,490?
Total Cash Investment: $27,240

Rent: $57,600/yr (4 * 1,200/mo) [VERY unsure about this number]
Vacancy Contingency: ($5,760)
Property Taxes: ($1,000/yr) [I can get a 10-year tax abatement to keep it this low]
Property Management: ($5,760/yr)
Repairs & Maintenance: ($2,880/yr)
Property Insurance: ($2,000/yr)? [Unsure about this number]
Water & Sewer: ($3,000/yr)?
Electric: $0 [Tenants will meter & pay themselves]
Landscaping: ($2,600/yr)
Total Annual Expenses: ($17,240)

NOI: $34,600/yr
Mortgage Payments: ($24,000/yr)
PMI: ($1,200/yr)
Cash Flow: $9,400/yr

CAP Rate: 7.9%

My questions for you:

1. Do my numbers seem good?
2. How do I get more confident about the rental income?
3. How do I get more confident about the purchase price? It seems really high in my gut, given the poor condition of the property.

Thanks in advance!

I was doing some research on houses of a very specific architectural style in my neighborhood. I found an abandoned property that would make a great BRRRR 4-plex, and the only thing I could see from the outside was that it had what looked to my untrained eye like foundation problems.

I left a note with the owner, and he reached back out to me a couple weeks later and said he's willing to talk -- because the entire back wall fell out. This almost scared me away from buying it, but I decided to keep talking.

The owner got two estimates for brick repair (foundation work NOT included), one for 17k and another for 23k. (However, historic district requirements in the area may allow me to replace the wall with vinyl siding, since it's not a public facade.) He's now asking me to make him an offer on the house. I'm brand new at this; I've never messed with REI or renovations in my life. In fact, I'm not even handy; I couldn't patch a hole in drywall if you asked me to.

I still love the idea of buying the place, hiring a structural engineer to fix the foundation and any other structural issues, hiring a design/build firm to take it down to the brick and build it back from scratch, live in one of the units, and rent the other 3. I'm already qualified for a renovation loan. But at this point, I have no idea what the rehab costs would be, or what a fair offer on the house would be.

The numbers I know:

• A similarly-sized empty lot in the same neighborhood can be bought from the city for just under $17,000.
• Rents in the neighborhood have a "u-shaped" graph: $600-800/mo for the crappy ones, and $1300+ for the recently-renovated ones.
• SFHs in the area sell for $120k-200k un-renovated, or $250k-350k renovated. The past five years have seen a huge boom in the number of renovations and gut rehabs in the neighborhood.
• The SFH next door (under half the size of this) sold last summer for $124k, move-in ready but not recently renovated.

My questions:

1. What is a fair offer for this property?
2. What would be a ballpark for my all-in cost for gut rehabbing this property?