All Forum Posts by: Sean Kelly

Hi All, I recently rehabbed a home in metro Detroit and am utilizing the BRRR method. I'm in the process of challenging my appraisal as I feel the appraiser seriously limited the area in which he would consider a comp. The home is located in Ferndale which sits adjacent to Hazel Park. The issue I'm having is that area of Ferndale which the house is located in utilizes Hazel Park schools. The appraiser noted that Hazel Park Schools are inferior to Ferndale and therefore he will only select comps with the criteria, "located in Ferndale, but in the Hazel Park school district". This limits the comps to approximately one square half mile in which there are really no recently closed flips, rehabs, etc. on the MLS. Any thoughts on how I can address this with the appraiser? I was thinking he could just take this issue into consideration with an adjustment? If I remove the criteria he set, great comps come in just blocks away - many of which are higher than I even expected to refi for. Appreciate your time/comments!

@John Powell Hi John, I'm trying to be cautious on not over estimating my ARV so you may be on to something. I did see a couple recent sales in the 165k range with the only difference being a basement. Fingers crossed on that but I am trying to prepare for the worst case. When I purchased the house it was appraised as is and met the offer I was making. This home is 820sf, appraisal is 142/sf. Average sf price in the zip code is 190 which would get me to 156k. I have done just about everything from all new electric to opening up the kitchen, new floors, HVAC updates, etc. Thanks for taking the time to weigh in!

@Matt Hurley Hi Matt, thank you for the input. I do have rental comps of 1450-1500 I was provided by two realtors. My taxes insurance and mortgage come out to $840 a month currently. In this area, I knew my sweat equity wouldn’t go too far but felt good about the monthly rental income. Unfortunately, I didn’t know the requirement to leave 20% in as you mentioned so yes - lesson learned for the next one.

I’ll start by saying I’m new to investing. I purchased my first deal after reading rich dad poor dad and listening to the BP podcast constantly for the last year or so.

I purchased a home in October in southeastern Michigan and am now about 6 weeks into a rehab I'm completing myself as I'm a licensed builder. My intentions are to rent the property. Purchase price $116,500 (5% down conventional), reno budget of $30,000 putting me all in at $146,500. Expected ARV is $155k-160k. I used the cash I had available for a down payment and closing costs but wanted to stay out of my own pocket as much as possible.

As I'm learning more about the refinance process I'm understanding I'll need to leave at least 20% in and will not be able to use the refinance to pay off the credit cards (0% APR for 12 and 14 months) I have been using to finance construction. Additionally, I plan to take the renovation a little further to minimize future maintenance issues and will need additional funds (10k) beyond the amount I would have been comfortable spending on the 2 credit cards to finish up the project.

I’m hoping someone will have a recommendation (construction loan possible?) on how to finance the construction retroactively so I can get my full budget and pay down the credit cards in the next 10 months. Looking forward to hearing your thoughts!