All Forum Posts by: Kevin Hassold

Jason,

No the property and comps are fine. I'm just confused as to how I am supposed to apply the info to arrive at an ARV. When I compare the rehabbed comps to my fixer upper subject home, I'm bringing the comps down but that doesn't achieve what I am trying to do.

I'm having trouble figuring out how to determine an estimated ARV for a property based on sold comps. When I compare the comps to the subject property, I feel like I'm working backwards (i.e. bringing the comps down the subject level instead of bringing the subject up to the comps). Is this the right approach for determining ARV or should I be basing more on just Sell Price/SF?

Thank you for the responses!

My intent is to BRRRR a property. Im trying to work backwards from the ARV to get to my purchase price based on the 70% rule and then subtracting the rehab costs. I’m not sure if appliances like fridges and washing machines/dryers should be considered in my rehab costs since they aren’t permanent items like paint or drywall etc.

When calculating my rehab costs, should I include appliances such as refrigerators and washing machines in my total rehab costs or are these items separate?

Thank you for the clarification! 

If I were to choose to roll my closing costs into my loan when refinancing my BRRRR, and my lender agreed to a 70% LTV refinance, would I receive 70% of the ARV plus the closing costs rolled in since that would be my new loan amount or would I only receive 70% of the ARV by itself?

When calculating NOI, should I be including my budgeted costs for vacancy, repairs and maintenance, and capex expenditures in my operating expenses to get to my NOI or should this not be included in operating expenses and these costs are paid with my NOI along with the mortgage?

Hello BP,

I am looking to purchase my first multi-family property and I am unsure what is more important in assessing how much I should pay for the property. Should I base what I believe the value is for the multi-family property on comparable sales or on NOI x desirable cap rate? Or should both play a role and one has higher weight than the other?

Also, the listing price for the complex is based on NOI (as if it were fully occupied, but it is currently only 50% occupied) and a cap rate. Should I account for the fact that the actual current NOI is 50% of what they are basing their value on in my offer price? Should my offer reflect 100% of the current NOI x cap rate or meet somewhere in the middle?

Thanks for the feedback!

So when you say a 5 year fixed rate does this mean the rate could/will change after the first 5 years? And the term of the loan will be 20 years instead of the conventional 30 since its a commercial loan?