All Forum Posts by: Mike Rubin

Seeking advice on a layout - value add..

I have a duplex in that I am renovating for a buy and hold in a B+ neighborhood. Hoping for a high 300 ARV. The first floor is one unit. My question is which of the following options would add the most value to the appraisal and from a rental perspective?

Currently: 1 Master bed, 1 small room w/ VERY small closet and a small bathroom (7.5'x 4'8") in this unit.

OR - 1 Master bed, LARGE bathroom and small walk in closet

Basically, if I were to live there I would prefer to knock the wall out between the small bathroom and small bedroom (in back of the house) and have an overall larger bathroom and walk in closet. I only want to do this if it would add more value to my final appraisal value / rental value. Thoughts and recommendations appreciated.

exciting stuff! I just tracked down and got a duplex under contract in Baltimore also. What zip codes are you interested in? Feel free to PM me to discuss. Interested in hearing about your deal.

Anyone here have experience using BRRRr method with Airbnb. The refinancing aspect. Any trouble with banks accepting this as income 

@Andy Gross I plan to turn the basement into a "private" apartment. Kitchen, full bath, bedroom and charge $900/mo. Upstairs has 4 bedrooms and 3.5 bathrooms. I would rent that for $2100/mo. $700/room is pretty standard and it gives them one room free. It should attract a lot of Hopkins workers and students. There is no dedicated parking.. It is below Hopkins on 100 block S. Chester. Thoughts?

I am concerned with the margin and am trying to minimize it by already having an inspection and a few contractors in. Hoping to make up for a lot with some after my 9-5 sweat equity. 

@Jason D. - Thanks for the response. 1. Hard money is set up and good to go. Technically, it is a family member willing to lend to me under those conditions and rate. 

2. This is where I am struggling. I understand the BRRRR method (have yet to pull it off). My question is trying to figure out if gaining that amount of equity(~100K) and a cash flowing rental property is worth the initial deposit of 20-30K?

As an additional note, I plan on a lot of it being sweat equity and also will live there while I fix up and then either 1031 or continue to keep it as a rental and move to the next.

@Matt Schelberg

@Jeffrey H. Care to elaborate? With the assumptions made, do you have any feedback on the deal?

Matt- Thank you for the feedback. One of the better points brought up. Certainly something I am aware of but need to put more thought into. I am itching for my next investment property. I happen to live in this area so am very familiar with the neighborhoods and the rental market, housing pricing, ect.. I also happen to love the old character in these houses..

The high city tax definitely is a set back. Do you have any recommendations on areas outside of the city that I should be looking into as a great rental market?

I am hoping to get a few additional eyes on these numbers and get a few other perspectives before pulling the trigger. I have been going back and forth with the bank on a foreclosure in Baltimore city, MD. This property is in a good area and next to Johns Hopkins and somewhat close to the water. The property is 4 bedrooms, 3 baths and also has a somewhat finished basement with an entrance and exit that will be a separate room w/ kitchen and bathroom (Not a legal duplex).

The numbers:

I had this house under contract for 205k but after inspection, pulled out. My number back to them was 190k which did not go through. At this point, they have reached back out and asked if I was still interested in submitting that offer.

I have comp'd the house at an ARV of 330k.

With a cash offer of hard money @190k and estimated repairs needed at 60K (My money) (I got a few quotes during inspection period) that leaves me with 250k initial investment. I will be paying .0725 on an interest only hard money loan(190k)- So add another 9k to that number. 259K.

• ARV=330k @ 70% cash out refinance of $231K cash out.
• Pay back my investors after 8 months @ (.0725) 190+9 = 199k
• 231k - 199k = (Leaves me with $32k cash in pocket)
• 60K renovation cost - $32k = a final investment of (-$28K) with about 100k equity in the house.

So - now I will have a $230k mortgage on the house - I will handle the prop management and lets say with the mortgage P+I, insurance and taxes it is around ~$1800/mo

I plan to live in one of the rooms, but without me I could get around $3000/mo in rent.

Really appreciate any feedback or thoughts. Is there anything I am missing. This would be my first "official" investment property- so I really want to make sure I get it right. Also, what ARV would be the lowest you would feel comfortable with?

Thanks!