All Forum Posts by: Ryan Grant

@Stephen Glover

Thanks for the input. That is what we decided to do. We are not changing the floor plan except opening up a few walls. We are already going to be cutting it close enough with our budget with all the things that are necessary to do.

Robert, 

Yes, we were looking at doing something like that.  Our only concern is how small that would make that 2nd bedroom.  I see that Virginia requires 70 sq ft for one person occupancy or 120 sq ft for two.  Doing your design we could probably keep the room above 70 sq ft but worried that might deter renters or buyers since the room is so small.  That option would definitely be a lot cheaper than trying to build an addition though.  I appreciate the input, definitely something we will consider.

I appreciate the advice and that is what we were thinking as well.  We do have connections with subs and we can also do a lot of it ourselves if we had to.  We are both just busy with our full time jobs and would prefer not to take on too much.  We could do most of the work for the addition ourselves but the only thing that worries us is that asbestos siding.  It sounds like saving that for last to see how much of the budget is left is the way to go.  Our question now is do we leave it as a weird 3rd bedroom or turn it into something else.  We probably need to do a little more research to figure that out.

After talking to our agent we were going to assume an ARV of $150,000 to be safe based on a 3 bedroom. I'm hoping it would appraise for higher but I wasn't sure if an appraiser would deduct anything for that 3rd bedroom not having its own access. Or worst case, not even count it as a 3rd bedroom since per Virginia code, a bedroom can't be attached to another bedroom like that. I'm hoping that wouldn't be the case because the tax records show it as 3 bedroom. The best way we can think to go about it right now is to just save the thought of building the addition for last and see how much is left in the budget at the end. I'm assuming we could always get an appraisal and if its low, look at adding the addition to get the 3rd bedroom access at that point. With the interest on the money borrowed for purchase/rehab and closing costs, we are basically starting all in at $80k. So I think we are going to be cutting it close. I'm currently looking for a contractor that can give us an estimate for that addition so we can at least have an idea of what that would be. Like I said in the original post, we aren't sure if the asbestos siding is going to cause that addition to be super expensive.

 Caleb,

We were hoping to rent it out as a 3 bedroom for $1,100 to $1,250 per month.  I'm not sure what a 2 bedroom would rent for but I would assume $1,000 max or a little less.  Based on what our mortgage will be, we really need it to rent for the 3 bedroom price.  Our main concern right now is getting the money back out when we refinance to pay back the money we borrowed to pay cash for the property and rehab.  We paid $76k for it and need to make sure whatever we put in we can get back out.  Right now we are just on the fence about which direction we should go to make sure that happens.

Hello,

My business partner and I just closed on our first property we plan to BRRRR in Richmond, VA. It looks like a long time ago a 3rd bedroom addition was added to the back of the house attached to the 2nd bedroom. The only access the 3rd bedroom currently has is through the 2nd bedroom. There is also only one bathroom and it is between the 1st and 2nd bedroom and only has access from either of those rooms. I have attached a sketch of the layout. We aren't sure if we should leave the layout as is, make the 3rd bedroom into a bathroom/laundry so each bedroom has its own bath, or build an addition along the back side of the house to connect the 3rd bedroom to the living room or the kitchen. If we go with the addition, we are worried that could get costly because of permitting required and extra costs for the house currently having asbestos siding. We couldn't think of any other way to give the 3rd bedroom access without doing this addition. Our budget for the entire project is about $35k to $40k and it already will need new roof, HVAC, floors, kitchen, bathroom, and we had hoped to open of the floor plan by removing the walls between the living, kitchen, and dining room. Below is a link to a 2 bedroom and a 3 bedroom comp. that are neighboring houses that sold in the last year. Any advice or suggestions would be greatly appreciated!

Our House:
https://www.zillow.com/homedetails/2707-Henrico-Dr-Richmond-VA-23222/12528230_zpid/

2 Bedroom Comp:
https://www.zillow.com/homedetails/2711-Henrico-Dr-Richmond-VA-23222/12528228_zpid/

3 Bedroom Comp:
https://www.zillow.com/homedetails/2702-Wellington-St-Richmond-VA-23222/12528238_zpid/

Hello,

My business partner and I are looking to invest in our first rental property and I was looking for some advice on how to structure the financing while using an equity line from our other business to help get us started. We are both co-owners of another business and the other co-owners have given us the ok to tap into the business equity line for our first purchase. The rental property will be completely separate and only belong to myself and one other partner (other co-owners will not be involved). The bank that has given us the equity line through the other company is also ok with us using the equity line for a separate personal project. Basically, we were wondering what the best way to use this would be so that we can come out of our personal pockets as little as possible and be able to pay back the loan in full within 6 months to a year. Our idea was to get the other company to loan us personally for the full purchase price so that we can pay cash for the rental property and also front the renovations. After 6 months, we would refinance the property and hopefully cash out enough to pay back the loan to the company in full. Would that be the best way to go about it or would it be more beneficial to have the company buy the property and then sell it to us personally and we finance it after 6 months?  Any suggestions on how we can best get started with the equity line at our disposal would be greatly appreciated!

Hello,

My business partner and I are looking to invest in our first rental property and I was looking for some advice on how to structure the financing while using an equity line from our other business to help get us started.  We are both co-owners of another business and the other co-owners have given us the ok to tap into the business equity line our first purchase.  The rental property will be completely separate and only belong to myself and one other partner (other co-owners will not be involved).  The bank that has given us the equity line through the other company is also ok with us using the equity line for a separate personal project.  Basically, we were wondering what the best way to use this would be so that we can come out of our personal pockets as little as possible and be able to pay back the loan in full within 6 months to a year.  Our idea was to get the other company to loan us personally for the full purchase price so that we can pay cash for the rental property and also front the renovations.  After 6 months, we would refinance the property and hopefully cash out enough to pay back the loan to the company in full.  Would that be the best way to go about it or would it be more beneficial to have the company buy the property and then sell it to us personally and we finance it after 6 months?  A mortgage broker told me that the best way to do it would be to purchase it personally but have the deed of trust with the company.  That way, it technically wouldn't be a cash out since the bank would pay the company back directly therefore the interest rates would be better than a cash out refinance.  I don't know much about deeds of trust and I'm not sure if that is even true about the interest rates being lower if we do a deed of trust.  Any suggestions on how we can best get started with the equity line at our disposal would be greatly appreciated!