All Forum Posts by: Khizar Hanif

Hey guys, 

I have my second flip under contract and plan on growing the business. Since things are getting more and more complex, I need to figure out a system to keep things organized and stay on top of accounting. How do you guys keep track of finances for your flips? How do you differentiate between different projects? Do you use separate bank accounts or a single one for all projects? Do you use Quickbooks to keep everything organized? Any advice would be appreciated, thanks.

@David Olson I agree with your realtor, the range is between 8-15% from what I have seen. A huge factor that plays a part in determining that "hit" in value is how quickly the neighborhood seems to be bouncing back. My current flip is in Fleetwood, which is sprawling with investors and homes are starting to appear on the market fairly quickly. So far it seems that my house will take a 8-10% hit. 

The deal I posted above is in a neighborhood thats moving very slow, so it would more than likely take a 15% hit. I passed on the deal. Thanks for all your input. 

I have a GC and realtors working with me as well. 

Lets link up sometime. Ill PM you my contact and we can connect on the phone. Would definitely like to put our minds together. 

Thanks Andrew, I am going to view the property today and will look further into rents and accurate ARVs. I am pretty confident in the repairs. I’m currently rehabbing a house in Fleetwood (memorial and highway 6). The rehab on that is about $30/ft. And those are high end homes with ARVs above $400k. Since this particular property will be a rental I won’t spend as much on material so I’m estimating $22/ft.

Hello all, 

I am currently looking into a BRRRR rental.

Single family home in Houston (Katy area) built in 1978. Flooded during Harvey, first time flood, professionally remediated. 

3bed/2bath/2 car garage

1,635 sq/ft

Asking price: $95,000

Estimated rehab: $35,000

ARV: $145,000

Cash purchase. 

-----2 reports attached. 

Report #1: Shows a negative cash flow of $44.18 (if property is purchased at the asking price of $95,000).

https://bp-v-newproduction.s3.amazonaws.com/upload...

Report #2: Shows a positive cash flow of $80.43 (if property is purchased at negotiated price of $71,250).

https://www.biggerpockets.com/calculators/shared/847958/505311ff-7b4b-44c3-a260-0d78cc2c2163

Both reports have Property Management included for future protection. 

In order to pull all my cash out of this deal with a 75% LTV refinance, the maximum I could purchase this property for would be $71,250. Assuming it does appraise at $145,000. I did take into consideration that the home was flooded and calculated my numbers with a 10% hit on ARV as opposed to pre-flood comps. In other words, the ARV pre-flood would have been ~$160,000.

I am not too concerned about cash flow, only to stay positive. My goal is to focus on loan pay down and not so much cash flow income as I already have a stable income. 

If you guys can provide some feedback I would appreciate it. This would be my first rental property using the BRRRR strategy so any information would be helpful. Thanks in advance!

@Felipe Carrillo and @Chris Hopper

Interested in meeting with you guys. Lets get together soon.

Hey everyone,

I'll be closing on my first rehab property next week and am currently working on getting bids from different contractors. I'd like to get at minimum of 5 bids before making a hire. So far, I have had 2 contractors look at the property and am looking for others. Do you have any recommendations? I would prefer someone who is knowledgable or experienced in scope of work needed for the recent Harvey flooded homes.

Thanks!

Thanks for your response guys. As of last Thursday I have a property under contract. More details to come. I will be going out to the event tomorrow (Monday) "how to buy flooded homes" at the Black Lab. I have been to one of this groups events before. Thanks for the heads up!

Hey all,

I have come across many deals here in Houston the past few weeks. Mostly flooded properties (only flooded once due to Harvey). These homes are ranging from the 1960s-1990s. Most of the homes have their entire first floor sheetrock and floor torn out. ARV and rehab estimates are provided by the wholesalers, but are not guaranteed. Rehab is possible, but I find it difficult to pull the trigger on a property because of various reasons...

1. After the flood, I would expect market value of homes to decrease by 10-15%. So if the house was worth 220k before the flood in marketable condition, it would be worth at most 198k after the flood and after rehab. Of course, location plays a factor in this but am I generally correct? The ARV provided by the wholesalers doesn't take that drop into account and there aren't many, if any POST FLOOD comps to confirm this.

2. Am I going to be paying premiums for material, labor, etc. I would expect repair costs to increase since demand is increasing in the area.

3. Is there a minimum built year that I should set my target as? Should I stay away from homes built in the 1960-70s?

4. In terms of numbers, most of these deals seem to be 80% flips. I know the general formula for rehabs is 70% but is that still the case? As far as I know, the formula shouldn't be used solely to make a decision but it is a good guideline to follow. 

I almost feel like I find myself over-analyzing, which can be a good thing but at the same time, I feel like I am never going to find the best deal out there. At this point, I don't know enough to be able to determine if I should jump onto a deal. I won't learn unless I try so I may just take the leap even though its not perfect. That way, if I succeed or fail I'll correct it the next time around. 

Thanks for your input guys. A little late to reply but better late than never, I suppose. I need to start implementing BP into my daily routine. 

After some more thought and taking you all's input into consideration, I have decided that the best route for me is indeed, HML or OPM. I have multiple lenders I can work with so I will find the best rates and can hopefully create a positive and long-term relationship with one lending party to where things can move quick!

Now, its just a matter of finding the right property with the right numbers. 

Thanks @Chris T. 

Just what I was thinking.