All Forum Posts by: Stefan D.

Oh god, it gets worse!!!  That is rough, I can't believe I'm complaining.

 Thanks for the advice Pat.  I am long distance, but it probably would be worth it to fly out to walk through with an inspector next time for the learning experience.

Thanks Brandon.  Yes, I think some of this was my agent's fault.  She'd been great on past deals but there were some red flags that she wasn't dotting her i's and crossing her t's on this deal (like spelling my name wrong, etc).  Luckily, I've got a new one now who I'm very excited to work with.  I think there's some shared responsibility with my contractor, and also myself - since I  could've vetted this more instead of getting caught up in the buying frenzy.

 Hey Le,

I have read that back, although I could probably benefit from re-reading it. This was actually my 3rd long distance BRRRR so I already had a team. The mistake here was that I rushed, with the market being so hot I'd already sent my contractor and realtor to dozens of properties. I have a made contractor who does cosmetic stuff for interiors, but to find the roofer, electrician, plumber etc I searched everywhere: personal recommendations, thumbtack, craigslist, google, the county's list of licensed contractors.

Thanks Joseph. The school of BRRRR is cheaper than college, so I hope I've learned enough to do better next time.

 Oh man, that is rough!! Thanks for making me feel better - at least I've got renters and my troubles are over now (knock on wood).  Looks like you've had plenty of deals after that to make up for it.  It's all a learning process.

Hey Taylor,

I lived in Pittsburgh for 12 years, the numbers there make sense, and I wanted an excuse to go back and visit.

As for estimating repair costs: I don't have the answer yet, but hopefully some people replying to this post will give me some ideas.  I've added more possible items to my contractor's checklist - but what I'm considering is whether it's actually worth paying a professional $500 to check the property.  In this case, it would have been worth it.  What do you do?

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Pittsburgh.

Purchase price: $91,200
Cash invested: $70,500

The nightmare scenario they warned me about on the BP forums!

I own four houses and decided to make the jump to my first multi-family with a small up-down duplex in the Pittsburgh ‘burbs. It was a long-distance BRRRR deal, my first deal in the pandemic world. I'd spent months trying to find something and even backed out of one deal, losing my $3k EMD, before finding this one. This was late 2020, and the market was HOT.

This duplex was a bank foreclosure, listed at $96,200, I haggled them down to $91,200. The closing process was a two-month nightmare, and my realtor ended up breaking up with me (ok, she moved on to bigger and better things). My contractor estimated $35k (I guess he never checked the basement), and I was hoping for $165k for the appraisal. I figured I'd sink at least $40k in and leave a bit of cash in the deal - little did I know how this deal would screw me.

During close the bank had told us they would not turn the utilities on. “Could not” would have been more accurate, since every utility was broken! The house had been vacant for at least two years, so the electric panel was rusted through, the gas lines had been disconnected and the water pipes had frozen and burst. I ended up working with seven different contractors - and spending countless hours on the phone trying to corral contractors into doing work for me. I ended up putting LVP over the beautiful hardwood floors because so many hardwood floor refinishers bailed on me. Contractors are not struggling for work right now, and I need to get better at convincing them to work with me. It took five months from close to getting the first unit rented.

I sunk $162k into this project, and had an appraisal of $172k - meaning I left $40k in the deal and lost my f---ing shirt.

Real estate investors are an annoyingly optimistic bunch, so I’ll try to put positive spin on this; Rent is $1795 total, so the cash flow should be decent. If I sold the duplex now I think I’d get at least $180k, so I’d break even (after fees). It’s basically the same as if I had put a 20% down payment and bought the duplex turnkey.

But, if you factor in the blood, sweat and tears I put into this place, was it still worth it? Probably not – but I’ll keep my chin up, learn the lessons, and do better next time.

@Isaac Sheehan

I sort of am my own GC.  I have one trusted guy that does the interiors, and then I end up finding other contractors for big items (plumber, roof, electrician, carpet etc).  It works well most of the time, but with complex projects it can get pretty hectic.  I had maybe 6 different contractors on my last project and I spent a whole lot of time on the phone just trying to get people to get out there.  Contractors have no shortage of work right now, but that doesn't mean you can't make this work.  Just be the most organized, friendly and professional guy they work with and you can make this happen.  Good luck!

I don't think it's something we've got to worry about for the next few decades. Right now the US isn't shrinking, it's just growing at a slower rate than it has historically. In the future if we don't have enough young people or laborers we'll let in more immigrants. Plus, STR's are taking some housing off the market for residential use. You asked about by the end of the century though? Man, I can't think that far into the future :)