All Forum Posts by: Tyler Smith

I am in the process of doing a BRRRR on a SFH. The roof is relatively new (within 3 years old), but looks bad. Should I purchase a new roof for $6500 and hope that increases the ARV?

My expected numbers on the SFH (without the new roof) are below:

Purchase Price: $155,000 cash

ARV: $300,000

 75%: $225,000

REHAB: $70,000

Should I add the new roof for the overall aesthetic of the home but more importantly will this raise the ARV to help accommodate the extra rehab expense?

Thanks!

I've found that commercial is different in that they don't always post on MLS. Harder to find comps. We just have the banking knowledge. All marketing for the units goes live on Monday.

@Andrew Postell

It was purchased with cash

I am set to close on a 2 unit, new construction commercial property in central Texas on May 1. Option period has ended.

The numbers worked, but then the virus hit...Will we back to work soon? Will I be able to find tenants?

The down payment will be $116,000 if I close. My worry is if I do the deal and don't get the units leased, I will be responsible for a $2960 monthly mortgage + taxes, insurance, CAD etc. Should I move forward with the deal or terminate the contract and lose my $15k earnest money? 

Numbers: 
PP: $579,000
RENT: $7500 ($3750 per unit)
Op EX: $3190
  tax and insurance: $1200
  CAD: $600
  property mgmt: $640
  vacancy: $750
NOI: $7500-$3190 = $4310
Cash Flow: $4310 NOI - $2960 mortgage = $1350 cash flow
Cash on Cash return: 14.08%

@Alexander Felice

How do you rehab before purchasing?

I bought a home for $120,000. ARV should come out at $200,000.

75% LTV will be $150,000. My rehab will come in at just over $20,000.

My bank just told me with the Fannie Mae guidelines on doing an investment cash out less than 6 months from the date of purchase (I purchased in January 2020), they state you cannot take out more cash than your original investment amount at the time of purchase. And since I purchased this home for $120,000, that means my bank will have to reduce the loan amount down to $127,400 to keep my cash back at $120K with rolling in all closing costs and prepaids. In other words, the bank will be reducing the amount of cash I receive at closing by about $22,500.

This obviously doesn't make sense now as my rehab budget is wiped out. Thoughts?

Hello BP!

I‘m looking for my core four in the Temple Texas area. Any good recommendations for contractors, agents, lenders and property managers in Temple TX? Currently I‘m looking to invest in SFH/small multi family buy and hold properties.

Thanks!

Tyler

First post! 

I live in Georgetown, Texas just north of Austin and am starting to invest in small unit multifamily within a 2 hour radius of this location.

Any meetings/groups in the area I can attend?

Thanks!
Tyler