All Forum Posts by: Tomeikia Gray

Hey guys,

My name is Tomeikia. I am a new real estate investor in Kentucky! I'm looking over the BRRRR strategy, and I am wondering should I apply the 1% and 50% rules to the ARV prices instead of the actual purchase prices? Right now, I believe I am going to need that ARV rent to cover the ARV expenses.

Therefore, if I buy a home at $50,000 and according to the 1% rule rent should be $500 (yes, I am aware that purchase prices this low can also go by the 0.8% rule, which would be $400), but if I BRRRR this property to market value of $80,000. I should want to rent the place for $800, and I can see myself applying the 50% rule to $800 method rather than the $500, especially when it comes to covering the refinancing part of the property.

Am I making sense?

I think fipping would be cool. If your ARV is at $110,000 that's a $27,000 profit! plus your money back. I would still go run the numbers. Also think about your market in today's time. How long is it taking for property's like yours to sell? So, you would need to facotor in holding cost and the time it takes to rehab the project. You have options.

@José Galarza

Hey José,

All of this is subjective due to what your criteria is and what you are looking for in this deal. Just based on the numbers and using the BRRRR strategy, I would say you are leaving money on the table if you go through with this deal.

Just by using the 75% rule:

ARV= $110,000 * 75% = $82,500

Asking price is $63,000 + Rehab $20,000 = $83,000

You would be leaving $500 in the deal, which could be fine to you. But, I would run the numbers with the BRRRR calculator on BP. See if you would get pre-approved for LTV of 75% and go from there. I personally would offer a little lower than what she is asking for to be sure that I could pull all my money out because that is the point of the BRRRR.

Hey,

I’m a new investor located in Kentucky. I am planning on walking through a duplex unit soon. It’s located in a poorer neighborhood, so I’m sure it’s going to need a lot of work.

What are some things that I should pay close attention to when walking through this unit? What would you considered to be "unrepairable" or a "deal breaker" when looking at a BRRRR property?

Hey,

My name is Tomeikia. I am from Kentucky, and I am having a hard time finding a real estate agent without being pre-approved. I plan on using the BRRRR method for my first deal. What should I do?