All Forum Posts by: Sharma Parth

Hi Sharma, these numbers look good. I'd recommend factoring in a bit more time for how long the rehab will take to be on the safe side, but I do like the MISC Expenses buffer that you put in there. 

Sharma,

Just a few things on the surface the deal looks great in terms of gained equity for the price plus injected costs to renovate/repair. There is No rents to see if it will support itself after the refinance, so its tough to speculate on ROI/cash flow on a long term investment. Just from a fix & flip it looks great but have you considered a 1031 exchange to avoid the capital gains?

Who is doing the ARV evaluation because I have seen a lot of examples over the last 3 years when a new investor looks to buy a property and ends up having the wrong ARV or sale value. If you refinance keep in mind you can get up to 80% LTV even as an investment rental.

I would look into a 1031 exchange to avoid that huge Tax hit... 

Sharma,

Just a few things on the surface the deal looks great in terms of gained equity for the price plus injected costs to renovate/repair. There is No rents to see if it will support itself after the refinance, so its tough to speculate on ROI/cash flow on a long term investment. Just from a fix & flip it looks great but have you considered a 1031 exchange to avoid the capital gains?

Who is doing the ARV evaluation because I have seen a lot of examples over the last 3 years when a new investor looks to buy a property and ends up having the wrong ARV or sale value. If you refinance keep in mind you can get up to 80% LTV even as an investment rental.

I would look into a 1031 exchange to avoid that huge Tax hit... 

Quote from @Sharma Parth:

Hey guys - I came across this company - Offer Geek - https://ogeekholdings.com/ - where they are offering properties by also doing the entire renovation, placing a Section 8 tenant and also offering property management for you? 

Has anyone worked with them before? 

Is there any feedback on the Flint, Michigan market?

Is it better to go down this route vs looking at doing a BRRRR deal myself?

Please advise! 

Hi Engelo - I think there is some confusion. This company is doing it all for the customer. The customer only pays 1 price that includes the price for rehab and purchase. Isn't that worth a try? (i could potentially go to the bank and get DSCR or a standard 30 year mortgage on it and have a cash flowing rental for $100-$250 a month?) 

Thoughts?


Personally not a fan of out of state BRRRR.

I think it's a recipe for disaster and having been in the game for 10+ years, I've seen the disaster first hand as I bought hundreds of deals from disgruntled out of state investors who thought they can do it themselves.

My property management company has doubled in 12 months also due to out of state investors getting caught with a poor property manager when trying to do it themselves from afar so they come to us for help 🤷‍♂️

I'm seeing many investors buying D class crap on the MLS for too much and that needs work.

They end up being into the property for 30% more than they would be that if they just bought turnkey.

A true turnkey provider will find the cheapest/best deals through a variety of acquisition methods, renovate well and sell for fair market value (And manage in-house).

If things go South, they are solely to blame and the penny drops with them.

But with DIY, who is to blame?

The realtor?

The contractor?

The property manager?

Nobody takes responsibility and the finger pointing starts.

It becomes a mess.

I'm bias as we offer turnkey so take what I say with a grain of salt.

Much success

@Sharma Parth City of Flint is losing population, so not a great place to invest:(

Detroit on the other hand, has been growing for the last 5-6 years and finally the US Census Bureau recognized that (please Google to verify!).

PM us if you want to discuss more about Detroit opportunities.

@Sharma Parth - I agree with Jake on the networking with MeetUps within the Philadelphia area. The largest residential REIA group in the area is DIG (Diversified Real Estate Investor Group | Real Estate Education in Bucks County, PA (digonline.org)) - I would go there to investigate the meeting schedules and locations as they have many opportunities to network and connect. From my perspective, when BRRRR'ing the most important aspect is the quantity of deals you can secure at values below the ARV in a given area. For example, if 3/1 in an area typically sell for $200k per home are their any listed at $150k or below because they need work/rehab? Knowing the price per square foot in a zip code helps and knowing when you can spot "value" is very important. When you talk about path of progress that is important to upside/appreciation, but I place a higher focus on finding "value" from the start. I invest in the Philly suburbs and would be happy to chat. Good Luck!

@Sharma Parth With your total cost ceiling of $120K, paired with the objective of completing a BRRRR you are setting yourself up for failure. There are certainly neighborhoods in Philadelphia where you can complete the BRRRR with your budget, but you are ignoring the fundamentals that make real estate a lucrative investment. In the interim you are going to be stuck with a home in a stagnant neighborhood that will struggle to absorb operating expenses. I know this is not the popular opinion on BP, but this is the reality if you make investment decisions based on the metrics you are prioritizing.

Quote from @Sharma Parth:

Quote from @Jonathan Greene:

Someone suggested Kensington? Who are you talking to?

Philly is not the type of place where you take advice, it's the type of place you have to drive multiple times to see where the blocks change from B to C and C to D. It is a block-by-block city for sure where the income disparity can be huge within just two blocks.

We have investors with about 40-50 deals, many of them BRRRRs in the Philly area, since the pandemic. Personally, I like Cobbs Creek a lot, but the areas depend on your price point. Harrowgate is up and coming in my opinion, even though people still may call it Needle Park. There are some new restaurants there.

A couple years ago in Harrowgate you could buy for 60-65k, renovated 5-15k, and rent for $1,100. That was the best deal, but that doesn't exist there now.

 Thanks Jonathan - here is my situation - 

1. Ideally I am looking at a purchase + rehab price of $110-$120K max.

2. The goal is to get a tenant in there (even Section 8 is okay). I am fine with a small cash flow of $100-$200.

3. I already have a few GC/contractors lined up who have experience in rehab projects. If you have any referrals that would be great too. 

Besides Cobbs Creek - what areas would you suggest based on the information I gave above? Does your company also offer (off-market properties) - Thanks

I like Harrowgate or Cobbs Creek for that budget. We have a colleague in Philly who has helped a ton of our investors there, send me a DM and I will connect you. And yes, we have access to on- and off-market in Philly. I personally get the deals off-market via some of the lists there.

@Sharma Parth

The best way to find mentors in your area is to attend local meetups and conferences. Ask to tag along on an ongoing project. You'd be surprised how many investors are receptive to that.