All Forum Posts by: Robert Shortsleeves

@Tucker Cummings you can have it brother. :)

Hey Team,

I'm a Fayetteville, NC investor and wanted to share the way I analyze rehab costs. When I started buying rentals this was one of the hardest and scariest numbers to put into the BP calculator so I figured I'd share and hopefully help some folks that are stuck.

If any more experienced inventors have some feedback that would help too. 

1. Lipstick (paint and floors) --- sqft x 5-10 = rehab cost

2. Light (Paint, floors, appliances, fixtures, ect.) --- sqft x 15 = rehab cost

3. One Cap Ex + 2. (Roof or HVAC) --- sqft x 20 = rehab cost

4. Two Cap Ex + 2. (Roof AND HVAC) --- sqft x 25 = rehab cost

5. Full Gut --- sqft x 30-35 = rehab cost

Example: 3/2 rental with 1150 sqft that needs a new roof, HVAC and all the goodies inside (Number 4). Not a gut job but you'd want to update the kitchen and bathroom cabinets with some hardware and paint. You may need to get a new countertop in the kitchen, some decent landscaping and minor exterior updates/repairs. Of course, you'd need to put down some LVP in the common areas and probably carpet in the bedrooms.

1150 x 25 = $28,750

If you have the right team you can defiantly get this sort of rehab done cheaper but you'd be safe with this number.

@Steve W. this is how I run my initial rehab costs and it's usually higher than my contractor's estimates/invoices here in Fayetteville, NC.

1. Lipstick (paint and floors) --- sqft x 5-10 = rehab cost

2. Light (Paint, floors, appliances, fixtures, ect.) --- sqft x 15 = rehab cost

3. One Cap Ex + 2. (Roof or HVAC) --- sqft x 20 = rehab cost

4. Two Cap Ex + 2. (Roof AND HVAC) --- sqft x 25 = rehab cost

5. Full Gut --- sqft x 30-35 = rehab cost

Example: 3/2 rental with 1150 sqft that needs a new roof, HVAC and all the goodies inside (Number 4). Not a gut job but you'd want to update the kitchen and bathroom cabinets with some hardware and paint. You may need to get a new countertop in the kitchen, some decent landscaping and minor exterior updates/repairs. Of course, you'd need to put down some LVP in the common areas and probably carpet in the bedrooms.

1150 x 25 = $28,750

If you have the right team you can defiantly get this sort of rehab done cheaper but you'd be safe with this number.

Like my man @Chris Stroup said, there are a lot of contractors in the Fayetteville, NC area but that also means there are a lot of contractors that are not that good. In my experience it's best to use a contractor that an investor buddy has used and recommends. If Chris recommends @William Bailey I'd bet a paycheck that he is legit and a safe bet. 

@Leyla Ahmadi Fayetteville, NC is a really good place for out of state investors. I’ve been doing some direct to seller marketing for a while and I’m able to find pretty good deals. Just closed on my 10th unit and I’m super happy with the results thus far.

We don’t benefit from a lot of appreciation but plenty of cash flowing deals for cash buyers. 

@Jeremy Absher looks like you are on the right track. As of late, the MLS has been a little tough when it comes to finding deals but it's still possible if you have the right agent and everyone at Five Pillars can help. When it comes to off market deals, I'd suggest getting on and monitoring some of the local investor Facebook groups. Seems like a lot of deals are being picked up there.

It's hard to fail in Fayetteville, NC. It's getting more and more competitive but there are still opportunities. I agree with @Justin Melendez. Just buy right and have a good team and you'll be GTG.

Vacancy-5%      Maintenance-5%      Cap Ex-5%     PM-10%      Appreciation-1% 

This is assuming you are rehabbing everything. If you are buying an older home or there is the possibility you will have some Cap Ex issues in the next 5-10 years, bump that Cap Ex up to 10%.
 

@Joseph Druther what day is the meet up?

I'm a fan of RJ with https://spoatjacksonbrowne.com too. lol He's a retired war hero from my unit so defiantly trustworthy. What's more important is that he's an investor himself so he understands what we're up to. 

DM me @Josh Stenberg and I'll see if I can find something that fits your criteria.