All Forum Posts by: Kurt Plaster

Thanks for the question. AJ's rules of thumb are pretty good regarding what he outlined above but to make it more exact than that might be overthinking the market. There is no master list that I use for those adjustments. We do make adjustments that we quantify in appraisals and it does depend on the neighborhood and the quality/condition of the improvements. It will vary by neighborhood and asset class. Hope that helps.

I'm looking at possibly purchasing a property that can be subdivided into two lots. It is zoned such that I would be able to build a duplex on the excess land in the backyard that I would like to hold as a rental. The existing house is a complete fixer and will require extensive renovations. I want to rehab the property to include an ADU and hold it as a rental as well but I won't be able to increase the equity enough through the rehab to be able to pull out as much cash as I would like. The reason the property is appealing is because of the land development potential. I have run the numbers through the BRRRR calculator and both properties would cash flow but I'm wondering how to finance it once I subdivide so that I'm not leaving as much money in the rehab house when I refinance. Any suggestions?

Is there a way to refinance once a property is subdivided so that the debt is spread over both properties? We are looking at doing a BRRRR but will have too much money tied up in the rehab house if we can't refinance prior to rehabbing.