When institutions estimate operating expenses for calculating the NOI and subsequently the DSCR, they typically use industry benchmarks and historical data.

The main house is completed and as far as labor, I spent $40,000 on just labor and that includes everything from full gut demo to finishes.We are talking about a 4BD, 3BTH two story 2400 ft.² home with a bonus room.This was a full gut job, replaced…12 Windows (new construction)2 sliding doorsTook out all carpet throughout.Took out this ugly 2” thick tile from half of the downstairs portion.Removed popcorn throughout the entire houseTook one wall downA little framing workReplaced entry door 80” x 92”Drywall patchingSmooth drywall work50 recessed lightingAll electrical neededAll plumbing neededNew cement walkway instead of one walk to the front door I created two steps with two lights in each step.Install kitchen cabinets, excluding countertopInstall all three vanities3 bathtubs with one being a modern standalone tub in the masterAll tile work (bathroom wall & floor, kitchen backsplash)Installing of all hardware, faucets, showerheads, etcInstalled 8 single panel doors with hardwareAdding self-leveler after tearing out that thick tileNew LVP flooring throughout the entire house except bathrooms,all baseboards, trimsPainting the entire house, painting all the doors, painting the outside trim.Reframing the outside balconyReframing the fireplace to install new linear modern electrical fireplaceand they took care of the two trash bins.I mean, completely redone.The only thing that was not included in the $40,000 is landscaping, counter top cut and install and of course the ADU which I’m currently working on now.So my question for my fellow investors and contractors did I pay too much?

Pay for the subsequent tax bills for the following 4 years.

I have a free video and slides on where to find them and a 20 case study if you want to connect with me. 

I don't pay much attention to IRR alone, as GP can make up any number there he wants by sliding to more aggressive cap rate compression projections at exit, one can move IRR from 10-20% easily.

If I had been prepared I could have walked away with a steal.So I sit there today for over an hour while property after property slides by with no interest.

A successful venture involved flipping a 30-unit apartment complex; acquired for $450k, we revitalized it with a $150k construction overhaul, achieved full occupancy, added a laundromat, and subsequently sold it for $950k after two years.

Other repairs since the new tenants moved in include, a sliding door lock replacement, drywall repair from a roof leak, 4 cracked windows, a broken front door handle, light fixture replacement, blinds that are longer than the window, window screens and now a ceiling fan making grinding noises. we're about $5000 into repairs/replacements right now since the tenants moved in.

In such scenarios, recourse may involve engaging an attorney to initiate a quiet title action subsequent to the foreclosure process.

Notify the seller of any large issues you find so that it must be disclosed to subsequent buyers which could reduce subsequent sell price and would provide some incentive for the seller to meet you somewhere in the middle.