All Forum Posts by: Nicholas Anderson

Hi Everyone,

What are you using for your monthly CapEx and Repair estimates when doing your analysis? I am currently using 12% combined for a light renovation and 10% combined for a heavy renovation. Both of these numbers seem a little aggressive, but I don't mind using them to add that extra layer of risk mitigation. My market can command rents between $1,400-$1,800 a month so in practice I am setting aside $168-$216 for a light renovation or $140-$180 for a heavy renovation. Obviously making the numbers work under these constraints is very challenging, but I don't think it is impossible when the right deal comes along. Looking forward to everyone's thoughts.

Thanks,

Nick

Hi @Ned Carey,

Thanks for the response. This is basically where I landed off the back of my recent analysis. That’s what I was more or less “dreading” to corroborate here on the forums. I’m going to try and run some of the numbers with leaving as little of my own cash as possible in the deals.

Thanks,

Hi @Salvatore Lentini,

This is exactly what I was thinking last night! I plan to reach out this week to discuss this subject.

Thanks!

Hi @Greg K.,

Another great response, thank you! I believe only one or two of those were HOA. I will take another look at expenses. As a new investor, vacancy is one of the most frightening things that could occur so I wanted to be conservative there.

Thanks,

Hi @Natalie Schanne,

Thanks for more great feedback. Your advice on the rate might be key here for my predicament. It’s possible that this 7% long term borrowing is killing my deals. If I can get it ~5% some of these look salvageable.

Honestly though, it feels like I would still need to find property for 40 to 50 cents on the dollar to realistically make anything work. The all-in amounts I have been using are basically assuming this anyway...

Thanks for your help!

Hi @Randy Gutierrez,

Yes I think you’re right, I need to find properties with lower ARVs and I think that will help tremendously. It looks like it might not work in my area, but I’m not willing to give up quite yet.

Thanks,

Nick

Hi @David Ripplinger,

This was really helpful. Thanks for the second set of eyes. The HOA being a problem was a given but I found that even taking HOA out wouldn't make the numbers work. You've given me a few things to consider here though, thanks!

Thanks,

Nick

Hi @David Ripplinger,

All of that information can be found in the deal analysis links. I’ve provided a few examples so a more experienced eye might catch any flaws in the way I’m doing the analysis.

Thanks,

Hey @David Ripplinger!

Thanks so much for getting back to me. From your perspective, what is making the deals not work? I feel like rents are fairly high in my area and I’m at least meeting the 1% rule on each of the analysis. I suppose I’m not really understanding what is going wrong on these numbers.its just that “leaving no money in the deal” seems to break the math. 

Thanks,

Hi Everyone,

For some background, I have access to short-term private money at 3% and long-term financing for 80% of LTV at 7%. Based off of the private money I have access to, I would be able to get into a deal with none of my own cash. My goal here is to find a property to BRRRR. The problem I'm having is that after I refinance, the rents aren't supporting the refinanced loan's P&I + my Expenses. Even when I'm using absurd purchase prices, leaving no money in the deal doesn't seem to work. It goes without saying that a "Cash Out" refinance would definitely not work. Can someone with some more experience here "diagnose" what is going on with my numbers? Thanks in advance for the help!

Notes:

• - I am baking all of the rehab, closing costs, and purchases prices into the same line item to reflect the PM and HM loans
• - For the sake of this deep dive, please assume rehab costs and ARV are accurate
• - I understand that in a few of these rents are somewhat low, but even in those cases substantially higher rents wouldn't solve my cash flow problems

https://www.biggerpockets.com/calculators/shared/1257767/ee02b620-98f7-42eb-b5bc-e3c4df4f24de

https://www.biggerpockets.com/calculators/shared/1257767/837aaf4f-4a55-48c6-a3f3-fa84ff3de55b

https://www.biggerpockets.com/calculators/shared/1257767/2ea102f2-2f17-4b58-a7df-cc23f63caa3b

https://www.biggerpockets.com/calculators/shared/1257767/d9f0e556-f161-47ad-8669-6efd017b8c8d

Thanks,

Nick