All Forum Posts by: Sara C.

I've done 2 BRRRR deals using conventional financing on the initial purchase. Thought I'd mention that as I don't see if often on here. These properties were in need of mostly cosmetic upgrades, so there were no issues getting the loans.

@Jessica Vanderveen sounds like you've thought it through and have a good team in place. Besides, 50K for all you'll learn sure ain't bad! Agree that with a 200K budget you're most likely covered. Good luck!

Congrats that you are getting started!! If you get it down to $50K the numbers sound like they could work (not sure about your holding costs).  Are you pretty comfortable with rehabbing? That's a big budget and sounds like a lot of work. Looking back on my first flip, it was all cosmetic updates and I spent about $40K on the rehab, and I was pretty comfortable with that. I don't want to discourage you though because it's awesome you're jumping in! I would just think about how comfortable you are with that big of a rehab budget and to make sure the profit is enough to balance out the risk. 

I use Whirley and Associates. They are great! 

https://whirleyproactive.com/

Definitely don't wait for it to start your investing career, but having a mentor has been invaluable to me. Although, I think seeking and asking for a formal "mentor" relationship is the wrong approach. The more networking you do—which is really just meeting people and forming trust and relationships—you'll always find people who are farther along in their career and can offer advice. I would recommend putting yourself out there with realtors, investors, lenders, inspectors, contractors (like the electrician mentioned above!)... you never know what you'll learn!

Annnnd I think I just answered my own question! I noticed that my closing costs where wrapped into my loan in the BP calculator images I posted originally. Once I changed that my total cash left in the deal changed to close to $40K. 

I almost deleted my OP but hopefully this will show people what a difference this makes. Crazy!

New numbers with that one change:

Hi all!

I'm confused about my cash out using the BP calculator vs. reality. See attached images with all the numbers the BP calculator has given me, which helped me plan my renovations, etc. I am in the refinancing phase right now, and will be receiving ~$40,000 in cash out. Which would be mean I'll have over $40,000 left in the deal—not $20,000 ish like the calculator is showing (and what I was planning on!). 

These are the numbers from the mortgage company:

• Closing Costs: $8,679.11 (half of this is lender points for a lower interest rate)
• Prepaid/Escrows: $2,211.79
• Payoff: $130,189 (this is the loan I took out to purchase the home initially before renovating, I put down $23,025 which was 15%)
• Total funds to Close: $141,079.90
• Loan amount (75% LTV based on $240,000 appraisal): $180,000
• Total Due at closing: $38,920.10

Help! I'm an art major guys. Where is that extra $20K hiding?

Sara

Ok, thanks all! This is giving me some good perspective. I'm not planning (as of now) to hold it a super long time, so that's why I'm having some trouble knowing how to finish it out. I want it to be durable for renters, but also be desirable to buyers when the time comes (and add some nice value). I don't mind going back in right before the sale, but I'd like to the bulk of the work now. 

I've done a few flips, but will be running my next project as a BRRRR. I'd like to sell in year 5 or so.

I'm curious for those that have done BRRRR's - what did you differently than if you were flipping in terms of finishes and rehab decisions? My worry is having to go back in and repeat a lot of the work before selling.

Any ideas are appreciated! 

Thanks @Brian Pulaski. Yes, honestly I'm ready to give into their demands. I don't want this to blow up, I want it resolved. 

The only thing is working through this realtor anymore has become a "hard no" for me. One thing I didn't mention is this is MY realtor too. He sold this townhome for me, and brought this buyer. Of course, the real estate transaction has been completed, so his involvement does not seem appropriate at this time.  I would appreciate the homeowner to spend a moment on the phone with me to form a basic connection, and also provide documentation of the dryer leak before I write a check (since our contractor was unable to get an eye on it). 

A huge thanks to everyone for all your responses. They've all been very helpful and I really appreciate this sounding board.