All Forum Posts by: Uneeq Khan

Newbie here. Got some questions about rent. How is rent handled when you have a property manager? Does tenant pay the property manager and he takes his cut, sets up expenses reserves, pays P&I, insurance tax escrow, and then sends you the net profit? Or does the tenant pay the property manager, he takes his cut, and then sends rest to you, and you set up exp reserves, pay escrow etc, and hold net profit? Or does the tenant pay you directly and then you pay the property manager, and handle the escrow and Reserve? Or is there something else I'm missing? Are there regulations how rent can be paid? Can they just venmo/paypal/zelle it or does it have to be a check?

Originally posted by @Ritch Bonisa:

@Uneeq Khan Estimating rehab costs before purchase. First you need someone to look at the property and provide an assessment. Maybe it's a contractor, a broker, a project manager, you just don't want it to be the seller. You want to have a source of independent comps, someone that can help you get an idea of ARV, rents, or an approximation of retail selling price. You need to understand what holding costs will be, any taxes, insurance, sales commissions. You would need someone with construction experience to get there and assess the property within 2-5 days and provide you with a report on likely costs. If you don't have much of the info that I've mentioned here, then you really are buying blind.

A good methodology is - find tight comps, understand rents. Establish a value that you want to reach. Understand the current state of the property and what needs to go into the rehab to reach the target goal. Add in holding costs. Work backwards from your target value, add all of these things in, then include ROI you need. This gives you the purchase price number that will allow your investment to work.

Thank you for the info. What is holding cost? Is that the cost of monthly mortgage payments from purchase date to rent date? 

@Mindy Jensen yes the app.

@Alexander Felice have a question regarding formatting. All my post show up as one big paragraph. Why is that?

@Alexander Felice thanks for the insight. Seems like I need to start making a lot of friends. Can you assume ARV by looking at other homes in the area with the same sqft and bed and bath?

Attempting first investment. Looking to BR4 or BRRRR. I have read up on it but have a million stupid questions. Im confused about the process and how people determine if something is a good deal. And how people come up with values on property before even making an offer or visiting the property. If anyone could answer them, that would be great. Also if anyone has links explaining all the abbreviations you use that would be helpful. Here's my understanding of BRRRR. Please correct me if I'm wrong. Buy House, rehab, hire PM and place tenant, refinance after 6 months, cash out extra amount on refinance after purchase + rehab, use that cash to repeat. Now my questions. Generally after everything, mortgage vacancies repairs taxes etc, what net profit should be expected per door? Cause I imagine that's how you price out your rent right? All my calculations make the rent too high in order to get a $300 net profit. So I must be doing something wrong. Is $300 unreasonable? The first loan you get is just for the purchase price or can it also include closing cost and rehab cost? If possible I would need a loan for the entire thing cause I have nothing saved. How do you estimate rehab cost before hand? Is this from home inspection repair list and then getting prices? Is there any way to determine it before doing all of that? And how would this be possible if it's out of state and you can't physically see and be there? (Hear NJ sucks for BRRRR, so might want to do out of state). I've recently overpaid for HVAC and bathroom remodel for my own personal home, so I stuck at estimating what the cost of rehab should be. Is there a percentage or rule of thumb for estimating rehab? How do you manage rehab on out of state properties? Not Physically being there and starting new with no prior relationship to any contractor. How do you estimate what the new appraisal value after rehab will be before even purchasing the property? I imagine you need this value so you can have a plan to refinance before thE first finance is done? And then cash out whatever is extra over the purchase + rehab cost? How likely is it now a days to get the seller to pay closing cost? In order for something to be a good deal, it has to cash flow immediately. You have to refinance on the new appraisal value after rehab. How do you determine proposed rent price before you even get what the refinanced mortgage payment will be since the tenant goes in about 6 months before refinance? Can the initial loan company that does the first finance also do the refinancing? Or is it better to get to a different company? If there's any link or tool that helps assess deals that would be helpful too.Very fresh starting out. Any help would be greatly appreciated.

@Ritch Bonisa how can you estimate rehab before purchase on a property you can't visit? Newbie here.

@Marco Santarelli are there finance contingency if it doesn't appraise? And what's the best option for starting for someone with little to no cash saved because they are living paycheck to paycheck.

I too am looking in starting out on this venture. Looking to BR4 or BRRRR. I have read up on it but have a million stupid questions. Im confused about the process and how people determine if something is a good deal. And people come up with values on property before even making an offer. If anyone could answer them, that would be great. Also if anyone has links explaining all the abbreviations you use that would be helpful. Generally after everything, mortgage vacancies repairs taxes etc, what net profit should be expected per door? Cause I imagine that's how you price out your rent right? The first loan you get is just for the purchase price or can it also include closing cost and rehab cost? How do you estimate rehab cost before hand? Is this from home inspection repair list and then getting prices? Is there any way to determine it before doing all of that? And how would this be possible if it's out of state and you can't physically see and be there? (Hear NJ sucks for BRRRR, so might want to do out of state). How do you manage rehab on out of state properties? Not Physically being there. How do you estimate what the new appraisal value after rehab will be before even purchasing the property? I imagine you need this value so you can have a plan to refinance before thE first finance is done? How likely is it now a days to get the seller to pay closing cost? How do you determine proposed rent price before you even get what the refinanced mortgage payment will be? Can the initial loan company that does the first finance also do the refinancing? If there's any link or tool that helps assess deals that would be helpful too. Very fresh starting out. Any help would be greatly appreciated.