BRRRR Property Deal Analysis (Floor Plans, Rehab & More!)

so how's it going on finger pockets I am here right now I'm your host Starla Yarber of this live broadcast and I wanted to take a moment to share with you guys a property that we have just purchased on the interwebs not just joking we actually bought it from a wholesaler not that long ago and this is a bur property for those of you guys started out this burner means buy it rehab it rent it refinance repeat and this is a property we bought in Seattle Washington area it's in the suburb called rent in the Washington we just purchased it about a week and a half ago and in that project in this video right now that we're gonna go through on this live video I you guys get asked this many questions do you want I'm gonna show you before photos everything the house look like right before we bought it I'm gonna show you guys the floor plans and what we're going to be doing to that project as well and showing you the numbers in the detailed analysis of the entire deal how we acquired it kind of rehab concerns budget issues all that kind of stuff as much as possible for you guys so if you have any questions at all we're streaming this here only right now on Facebook if you're coming back to watch it after the live broadcast go ahead and comment on there I'll do my best to come back and answer the questions as I can but besides that give us a like share it to your friends and let's jump into this deal I'm gonna while I'm setting up I'm gonna set up the broadcast here so that way I can see your guys's comments so hey Carly snap nice watch India are you nice you watching me I can't see you but thanks for joining us also lets me know where you're from as we're going through this now that said let's go ahead and jump into this project I'm gonna share my screen for you guys to see and this is going to be the beautiful beautiful house that we bought in Renton Washington all you guys should see right now look at this gorgeous thing and one of the best things about the burst strategy is in my opinion it's pretty much just a flip that you decide to keep instead of sell that's it so most people think birth strategy is just strictly buy and hold and in reality if you are just a buy and hold investor and you're just looking to just have pure cash flow and that's all you're looking forward to doing you want to be a passive investor Bure strategy in my opinion might not be the best thing for you there's some activity that you have to do on this if you've been flipping houses for a little while is a very transition to go from flipping tuber because you're basically taking a property that you have to buy that's pretty messed up undervalued fix it up and then get the higher appraised value on the back end to be able to pull your money out and keep it as a burden I'm going to show you guys what that means if you guys are watching it but look at this house here does it look too bad on the outside and it's a little messed up now one thing I want you guys to note too is we take hundreds of photos of the property before we buy it always every single time I bought this property without ever walking it myself personally somebody else took all these photos I do the analysis from my desktop and then so that way I can like do it from home I'm all about strategy so this house here it's a normal little 1950s house that is in this part of the suburb of Seattle called Renton Washington one kind of weird thing right off the bat is that this garage is kind of attached to the house in this weird way you'll see in a little bit that it it shouldn't have been that way it was actually a carport at one point that the original owners extended into the house to be able to attach it to the to the property doesn't do it any good and you'll see why in a moment because there's no way to get to the backyard from this house without going through the garage so it's kind of weird and little of disrepair some moss on the roof inside the garage this is in the garage you'll see this is corrugated board our corrugated citing that's not even really exciting that's not for a roof and it was just a carport but then closed so that's an issue that we can talk about if you guys want be as my photos are loading here which is taking forever for some reason the let's go ahead and skip to the next photo all right so backyard looking kind of shabby the washer/dryer units in the outdoor is in the attached to the garage in the carport itself the panels not too bad I'm able to go through these photos there's a crawlspace entrance here which we'll get into in a second you can see that it's not been taken care of they don't really like landscaping in this house for some reason here's a funny funny thing on this house when we right now if you saw the photos of the property already we already cut back all the landscaping there is a ton of rats that we're living in this project in this house all the neighbors all that inhibitors reached out to us you would think they would reach out to us the thank us that we cut all the landscaping back but can you guess what happened once we cut all that landscaping out on all those blackberry bushes that are back there in this massive little force that's back there with all the rats well all the rats were living in there so as soon as we cut back everything the rats just scurried everywhere you're talking just a ton of rats came out of there and all the neighbors started having rats go into their properties the dodge from all the neighbors are like eating the rats and bringing them to the homeowners and my wife who's also our project our property not sorry a property manager for our rentals so this is the first strategy was getting hit up in email by the neighbors for like uh we have a problem here with that so anyways because we're good neighbors I decided and I don't want issues with the neighbors I decided hey let's go ahead and pay for rat extermination for the neighbors - and not just our house it's a couple extra hundred bucks to us but it makes the neighbors happy so keep that in mind when you have a ton of rat issues there's a reason why they live there it's because of these massive blackberry bushes on this property and in Washington blackberries are like a weed some of you guys from other states might think like Oh blackberries are delicious I should be able that I want to eat them like for us or like and they're they're freaking everywhere and they need to get off the properties so for some reason my photos are taking forever to to pop up so forgive that delay I'm gonna jump to the inside of the house now because that way kids can see that but as soon as you go to the inside let me find those photos one second and then we'll start getting into the actual deal itself when you get to the inside oh let's go into the crawl space let's look at that thing so look at this thing so first off beef without even walking it I'm already like alright there's something wrong here like this is a crawlspace entrance you can see there's a bunch of cinder blocks here they didn't really frame this in right looks like they cut the foundation to put that in there that wasn't actually initial build and so I wanted to know that is I'm already looking in there without walking it and seeing okay these are posts that are cinder blocks and they're not footings right so if you're new to construction this might be like hell what's wrong with that but if you've been doing this wrong if you've been flipping houses for a little bit then you might be able to look at those right away and that's just a red flag another major red flag if you guys don't see is why is it why does this look like moisture how come that this is a basement crawlspace or whatever and there's water stains on these posts well that should tell you right away that in this particular crawlspace basement it gets water right and it fills up pretty high I mean that's like a foot and a half almost two feet of water that gets into that that's a sit in there so that should be a major major red flag right off the bat there's some plumbing you can see a little cast iron there's some obvious issues with some of the posts this is a post holding up the house and they basically took another two four by four just put it on a side with a bunch of shims that's no good but yet they did it right over here with a cinder block on the side that's bad so these should all be if you're new to rehab in construction I would highly recommend that you're not you don't become an expert and all this stuff but these photos should raise a red flag to you to go wait I don't know what's wrong with this but it doesn't look right that should then trigger you to go get more information either from a homeowner specter a contractor or somebody that can help you out if you don't understand rehab enough to know what's really wrong with this I mean you look at this post right here it's crooked and it's a new beam so that means somebody did that and I was soo min here but this is some other posts that are literally just cinder blocks and things on their side that even though you might not know how to fix it it should at least raise the flag going I need to find out what's wrong with it alright so rest of the house somebody's living in it hoarder house and so forth if you guys have questions when we're going through this we'll be able to go through that amendment I'm going to show you guys the numbers on this property the suburb property that we bought that we're that we just started rehab on these are all the before photos before we actually started gutting it in doing some work to it and something I mentioned earlier is that one of the best things about flipping houses if you want to get into birth strategy is that flipping houses allow you to get really really good at fur in my opinion because it really gets you really good at looking at really messy properties like this and they don't become an issue for you because you're already used to dealing with you know bad floor plans messed up you know rehab and stuff like that I am and for the most part and this house is just has a crappy floor plan it's full of junk it's also you guys can't smell it right now so you could try put your nose up against the computer and try to smell it it might not work out for you but I bet somebody else did that uh if you guys try to smell it then you would smell a lot of animal feces and animal urine that's what you would smell you'd actually taste it more than just smell it if you're walking through this project because it smelled like it pretty bad so we did just a kills primer the entire place after we gutted it to get rid of that smell kills oil-based primer is very very helpful on these products oh alright one of the I want to get straight to one of the really big messed up parts of this project too besides the foundation area is one of the issues right away is this bathroom this is a very tiny bathroom you can see that this is a three bedroom one bath house currently and it this is the only bathroom in it and it's a 1400 square foot property so you have a really really really tiny bathroom so we need to fix that later as well I'll show you how we're gonna do that with some floor plans and then let me show you another issue of this property - we have a there's an addition that was put in the back that looks a little odd let me find a photo for it and okay so in the back of the house there was a garage that they converted into a bedroom so let me the photos up so it looks so this is a back room bedroom that could converted into that was a garage that could convert into a bedroom and they built this little back addition back here that they call an arts and crafts room but in reality it's just a six and six foot ceiling it doesn't really do much and forgive me once again for the video for the photos taken so long the low this is going through my Dropbox at the same time it's a little annoying so the let's see now you can see this little low ceiling and you can see the door the door got cut down so that door doesn't do a Dutch justice our friend Aaron who helped take the photos there he is you might see this video later he stands back there at some point no it doesn't ever mind so this is where you can see all the rat stuff is the Attic all right so what does that mean to you guys let me show you guys now what we're doing to the project oh there's me in my life all right so this is the floor plan so the floor plan when we bought the house this is what it looks like this is called an as-built there is this is the front of the house here and you can see that from the front of house there's also a side of the house there's that tiny bedroom that we talked about right every bathroom that we talked about and one of the big red flags that should come up is that all right this garage there's only one exterior entrance and exit to go to the backyard you go through the garage the other entrance to the backyard is you have to go through a bedroom then you go through that back addition then you could go through the side door so if you're in the kitchen and you want to bring your barbecue out to the backyard a barbecue the only way you can go there is go through the garage door or go all the way over here to the back addition through bedroom that's kind of an issue so this was a big big problem for us to try to design the floor plan the other problem on this house is this tiny tiny tiny bathroom right is only a all barely five foot wide and it's only six foot eight depth a good minimum bathroom you need is five foot by seven feet that's a minimum bathroom size to get a halfway decent back and you can do it four by seven but that seven feet is super important because that seven feet allows you to have thirty inches for the toilet it allows you to get a 24 inch vanity and then a 30 inch width tough so seven feet is kind of that minimum you need in order to have like a normal-size bathroom go in this way and then five feets the minimum you need for a tub but you can get away with a four foot from this way this way you get away with a four foot wall if you had to so seven by four and it would be a four foot walk-in shower or something like that right so that would be the minimum standards that you kind of need a four by seven or a five by seven this is smaller than all of that so for the most part to make it functional because I'm I'd rather have the seven feet more than anything this way so that way I can get a normal size at least a 24-inch vanity in there so we got to figure that out as well so here's what we do we also have this closed off kitchen people like open kitchens now kind of a small bedroom back here and of course no back back area to the area so here's what we're going to do we then go through this project me and my team and we start trying to optimize what's the best use of this project we can do all sorts of crazy stuff in here and we can go hardcore rehab dumping tons and tons of money or what's the minimum level we can do to it to get the maximum value which I'm going to show you the numbers here in a moment but this is what we're doing to it so this is something we created this is the same house and this is the floor plan though so same house we decided to detach the garage so we're gonna detach it because it's right now a carport that's not do anything we're gonna make it a single car garage detached we're gonna actually add some better siding to because right now it's corrugated siding and now you can go through the side door and actually just walk around to the back door we're gonna put a fence right here that would put a little gated fence right there so it makes it easier for people to you know be safe and nice and stuff like that and if you notice what we did here in the bathroom we got rid of I'm going to go back to the Asheville this is the Asheville this is this area so look at all these closets look at all this messiness stuff everywhere so we cleaned it up we said all right let's make a hallway here so those closets we took a little bit of space from the kitchen in this area here to add a new closet for this bedroom we expanded the bathroom out to eight foot six so we can get a 36 inch vanity here so we've got a decent-sized vanity now put the toilet next to the tub because it fits better and then got a normal-sized tub in there and then changed a little bit of closets here and so forth so it's a little bit more functional here bigger bathroom Yatta Yatta Yatta now on this side we got rid of this horrible addition that was over here this thing sucks right it's horrible I didn't show you photos of it but it's just built all wrong it's not even on a foundation it's just bad news it wasn't permitted bla bla bla bla bla it's for us that extra square footage just makes it weird so it doesn't detract anything from the street sale discrepant we got rid of it way better for us just to get rid of it completely turn it into a nice patio maybe make it a covered patio and have a 1/2 light door here and make it part of a master bedroom with a walk-in closet now if we wanted to we can also do a which we're probably not going to we can also instead run one we can also instead of adding that we can do this in the back as well which is can make this a bathroom instead so we can make a master suite so we could have a walk-in closet and walking sorry little closet and a walk-in shower with a bathroom so for us we can either do that walk-in closet one bathroom here no bathroom there or we can add a bathroom instead and make it a two bedroom three bedroom two bath property a lot of you guys might be thinking why not add the bathroom will it raise value yes it would raise value however it also raised costs this entire area of the property is on a concrete slab foundation which means there's no crawlspace underneath it and it's just pure cement that's it this side of the house here is on a crawlspace foundation right so with the crawlspace foundation that allows us to be able to do the plumbing really easily so our plumber could go in there and explore in there and all that kind of stuff and just be able to take care of this stuff with very little issue if we add a bathroom here we have the jackhammer all the concrete out make channels and try to get this plumbing that's over here all the way over here because this is where all the sewer lines are for the property is like there's a line like right here so I got to get all of this stuff over here right and that requires cutting a bunch of concrete and in just more cost that maybe we don't want to have in order to do it so doesn't raise value yes but it also raises construction so in order to raise construction then raise the construction cost so here's a rule of thumb right when it comes to you do you do something on your rehab or not right a lot of people want to do things that make them that they want for their house that they lived in it right this is a math equation if you want to do real estate you need to get all your motion out of the way and think all about math and keep it objective right so if you're thinking about math and all objects and just objective to objectivity then here's simple math if it cost me 10 grand to do this which they probably want it might cost me like 8 right but it would cost me a you know some money right maybe maybe six you know it's ready there comes up my tile it or not whatever right it's gonna cost me some money six to ten gram it's gonna cost me six to ten grand to do that but it only raises my value let's say 12 grand or even 15 so let's say it cost me ten to put the bathroom in and it raises my value 15 that means I only got a five thousand dollar increase in my price right well that sounds good right that's a that's a 50% increase like a margin right on your investment that's ten grand to get 15 that's a 50% return but does it set my timeline more into it doesn't make permit issues longer does it set my does it increase my construction time by another two three weeks who knows right does it is it something we even have to do is there a risk factor on the property that I'm not really sure if I'm gonna get a lot of money out of it so for that so you get away all those costs and all those value and opportunity cost as well or for us right now for this property simplicity so we're leaning towards not doing the bathroom at all just to make our life super simple make the city of Renton like not really care as much about the permit side as far as like getting like another bathroom it's way easier for us to get a permit we don't have the bathroom right all it's kind of crap that we're just the baby so probably gonna keep it like this cuz the three one doesn't really matter as much so hold that make sense if you guys have questions we have okay we got one David Stewart why not take a sewer washer waste pipe down the edge of the foundation then go slightly outside the footprint of the concrete and go back into the crawl you don't need a jackhammer everything do you yes you do so because if I did that what you're saying basically what you're saying is that here's the main foundation you'll add a sewer line or whatever there well this is still all of this is still on slab so how do you get the toilet right to build a drain out I need to go down and cut somewhere I'm other cutting out this way or I'm cutting out this way to channel that way right I still gotta cut the slab out to be able to get the drains for all this stuff to go somewhere right and cut Creek channels is it the end of the world no we've done that tons of times right on properties is it worth us doing on this I don't think it is I also like keeping things simple and it's something I can always do later if I want to as well for me I want to get in and out of this one I don't really care as much so we also did some stuff at the kitchen if you guys notice here - this is a what the kitchen used to look like right we go back to that here's what the kitchen used to look like blah blah blah kind of weird shaped kitchen now it's going to just be a simple u-shaped kitchen and with the so if you were subbing in a wall because we want upper space a lot of people are like oh you should make everything like super open and like super cool well when you open this wall up on this house right here it only leaves room for uppers here and here for cabinet space so you actually are limiting your cabinet space big time and because it's kind of a small kitchen area most people as much you might think they want that open concept they probably are gonna want the uppers the other idea we have on that is I wonder if we got to here yeah so I think what we're gonna lean towards though cuz I think it convinced our design person to do this it's like well I want it open because of the comps so we're gonna do a half wall here and no uppers and just make sure the cabinets are nice and big and whatnot I just put some over so we probably are going to cut that wall in half just make it open but something to consider if you get rid of the uppers for cabin space or is it more important to have this whole thing be one big open area for just appeal of you know the comps in this particular neighborhood now that I'm remembering the cops say that you want the open floor plan more so than the upper cabinet space so I'm gonna go with that instead and we're just gonna cut that wall in half and go from there cool cool so let's look at the numbers and in order to look for the numbers on this project I'm gonna use this fancy dancy tool called actually before you do that there you go so oh by the way tomorrow Jase Scott and I have a webinar on how to maximize profits by optimizing optimizing your rehab and controlling cost you guys can go to bigger projects comm go to education and right here click on webinars tomorrow night at 4 p.m. Pacific Standard Time 7 p.m. Eastern Standard Time Jase Scott and I are doing a webinar about rehab controlling costs maximizing profits it's gonna be good times so I'm gonna use the BiggerPockets burg calculator to be able to show you what we're gonna do on this property so I'm gonna start a report and what this all looks like the rights not to ask first permitting will take longer if you add another bathroom on this particular project you're taking me longer because I just need to do I could do an over the counter permit with the city of Renton on what we're existing they doing because we're not doing a whole lot of stuff on the house we're just moving a few little things and in the bathroom might trigger a where that takes away they have to go through some sort of plan reviewing stuff Renton and it depends on your city so here's the thing don't take any ice thing I say to say that it's going to include where you live right where you live with permitting where you live with your jurisdictions where you live with your city building department you have to know yours because I can tell you right now where we live I live in Issaquah Washington I do a lot of business of Seattle Washington and Seattle has a whole bunch of different subsets of cities right you have shoreline you know Berrian you have Des Moines you have a CIO itself you have a king unincorporated Keene County you have Renton which is right next to it you know like and each one of those things I just mentioned has its own building department right SeaTac which is right there next to seattle as well they all have their own building department right so each one has its own rules own issues own stuff right and you got to know them where you live it's gonna be the same exact thing so be careful when you're on BP and other places like BP and you take whatever we say for granted and saying like oh that's what that's what Carlos said because Seattle did that and I live in Wisconsin or whatever right then yeah it's not gonna be the same because you might be having it easier than us or vice versa who knows so I'm just be be calculator for this property and I'm gonna call it bear in Renton if there's more than one are right buy it we have it rented repeat right right - speak I'm not gonna give you guys my address of the house but I'll say it starts with three zero to nine there you go Renton and season Renton property states in Washington all right there you go I don't know their zip code there right now property taxes on this is I think I think technically just call it 2,400 bucks all right I can add a photo if I wanted to right and let's go ahead and do that let's see if I can do that quickly and I'm gonna find a photo right make it all pretty and show you kind of what these numbers look like so before pictures here you go we got a photo done it's up and I'm gonna go to next step all right this property for two hundred and twenty eight thousand dollars right now here's the fun part I bought this from a wholesaler so I didn't buy this from the seller Excel the wholesaler had this property tied up for two hundred thousand dollars right so they had a title for tuna Graham I bought it for 228 so the whole sir got a $28,000 signup fee kind of cool for them right to be able to do that now I'm happy to pay that you'll see why in a second now I think based on comps if I leave this place as a 3-bedroom 1-bath property then it is worth three hundred and ninety five thousand dollars and those based on comps now how do you get comps that's another whole webinar whatever we're doing here live broadcast right but I that's it now closing costs you can break down the cost breakdown if you wanted to right any points origination fees from your lenders and you'll sessemann title escrow you know you could throw in this case entitled escrow called a thousand bucks right inspection cost and have any I didn't need to do any praise Allah because no no makes could have maybe pray praise it blah blah blah bridge nation fees I didn't pay any for my points because I get really cheap financing for myself estimated rehab costs now I think we're gonna put about fifty five thousand dollars into this project because the foundation and the posts and peers are all messed up back there I'm gonna rip off this stuff in the back I went it rehabs kind of expensive for us that's the other thing Washington is expensive for rehab you might have a lot cheaper yeah some parts of the United States this rehab might be a thirty thousand dollar eeeh right other parts it might be needing those like yeah it depends on where you're at that's one of the hard things but there's a great book called a book on estimated rehab cost by Kate Scott check it out that help you out so I didn't buy it as far as I'm gonna do this actual value so I put I was able to borrow the two hundred twenty eight thousand dollars in purchase and I borrowed the fifty five thousand dollars in rehab from one of my private money lenders that's a private individual so if you add those two together then I borrowed was that 33 plus five eighty three so three hundred eight sorry 283 thousand dollars so I borrowed two hundred eighty three thousand dollars to do this property right not cash I am pain on this one I'm paying an eight percent interest rate to that private my letter so you can raise money and capital from other private individuals and stuff of that and get cheaper money if you were paying from a hard money lender a lot of our money and letters are gonna pay two to three points this is where you have the points you might be paying between ten and twelve percent I used to pay that all the time right but over the years I've gotten cheaper financing and cheaper funding right I don't have any other fees that I'm wrapping the loans and feet points into the loan it is interest only right there is no private motive mortgage insurance I'm gonna refinance this property after five months of working on it roughly it to be exact rehabs gonna take me about five months as well maybe four months right give or take my new loan amount when I go to refinance as umber I'm gonna try to refinance all of it so if I borrow two hundred eighty three thousand then I also want to refinance 283 thousand right if I can now right now I'm gonna be conservative and say my interest rate on that refinance is gonna be five point five percent through portfolio lender it might be less it might be more but I'm trying to be conservative and figure that out I'm gonna pay some other fees right for sure I might pay one point so that would that would be twenty eight hundred bucks and some other expenses like appraisals and all this kind of stuff so I'm gonna say that my fees are gonna be forty five hundred dollars to refinance that because bleared and I cost money to refight right I'm gonna pay those I'm gonna try to wrap those fees into the loan so because I'm hoping that it appraises for enough it's not gonna be interested only it's not to include that I want a 30-year on there minimum and then the cap rates in the area let's call this six point five percent you can make that up you don't have to have a cap rate if you don't know it let's skip it all right now rents in this neighborhood and stuff that's gonna go for about twenty three hundred dollars a month it is expensive where we live some of you guys might be like holy crap how did you get twenty three hundred dollars a month for a property that's 3-bedroom 1-bath well Google is because it's hillo rents are expensive we're lucky for that here in the area no other monthly income I don't pay electricity I'm not paying water and sewer I'm not paying private mortgage insurance garbage HOAs but I am paying homage insurance we're gonna put 80 bucks on that right now other monthly expenses nothing really there for us but there's vacant seat so you can mess around with this I don't think we're a vacancy issue but we do a 5% there now here's what I think with repairs and maintenance capital expenditures when you're doing amber we're gonna fix all the electrical in this property we're gonna be all brand-new plumbing all new windows all new furnace all new roof all do everything doors cabinets you stainless steel appliances everything's gonna be brand new on this so I don't think I'm gonna have any expenditures on this property for some time and from doing birds for a while if you put the bird to the level that we view which is you fix everything I have properties I have home owned for most four years I've never had to repair anything on right other than when somebody moves out he touch up pain that kind of stuff but let's just still for shoots and giggles let's put three percent on there right so 69 70 bucks a month and let's say that maybe there's a five percent capital expenditure ratio who knows I don't know honestly because doing the borough I might hit throw that management fee we self manage my wife holds that so you can leave that blank I encourage you guys to still pay a property management fee even to yourself because we pay our own property management fee to ourselves I would say future growth in this area is going to be 3% I'm going to say this if you don't know what this means this is how much this is how much do you think the value of the property to increase right I also think that maybe three percent maybe more and you'll expenses growth yeah maybe two sales expenses go down say five right and calculate results once that's all said and done it spits out a pretty shiny report and let's see what it says is this a property we should keep or not well from the looks of it my cash flow is not going to be very good nineteen dollars and 61 cents cash flow oh that's not so good $2,300 monthly income 2880 in expenses now part of those expenses is vacancy rate repairs management and then just and management so those three numbers right there 118 that's $300 plus that that's 370 so I'm putting away 372 months just in case for that so in reality this thing is actually cash flowing almost what $400 a month so reality is cash only 400 bucks a month but we're setting aside those monies for just in case situations even though we self-managed right so we can get rid of that I'm not really worried about that I'm not really worried about that expense either so ultimately there's cash flowing 400 bucks a month but just in case we're setting aside the money for those if you don't need the money you should always set aside it might be it has an infinite cash on cash return so what does that look like after repair value is 395 total project cost is 284 right I didn't put any money down there's a $55,000 surplus to pay for the rehab because I borrowed the entire first first mortgage right there's the interest cost loan amount on the back end and principal taxes insurance all of great stuff I have one hundred twenty twelve thousand dollars of equity when I buy the property and this is what it looks like after year one if I decided to flip the property I make 90 grand if I decide to sell it after a year right that's a good flip how many guys out there would love to make 90 grand after you flip a house heck yes so that's why I bought this property I bought this property because no matter what right I can always flip the property so if I decide to not keep it as a rental this is something we do all the time if I decide not to keep it as a rental and I go at the end of the project can I just sell it as a flip yes great I'm gonna buy it right because I flip houses if at the end of the project right I go oh cool we were under budget we can refinance it we get all our money back and in this case it cash flows about four hundred bucks a month we set aside the money maybe we pocket 50 bucks or whatever but but we have about $400 operating income at the back end of the property to mess around with no money out of pocket I'm probably gonna keep this property and rent it out and just be happy with it all day right but if I had to sell it I could sell it and make 90 grand super right that's after a year that's assuming that the values go up a little bit after another year after another year after another year you know ten years ten years later maybe I make 280 game that might be a little high no spray it depends but I'm buying another mortgage so that said I'm able to now use this calculator I can even print out and share it as a PDF right I can make a hole I can download it as a PDF let's see what that looks like so BP allows you to use all these fancy tools but their BER calculator and whatnot and I could print this out and I can hand this to a potential investor at a potential friend and intense your like money lender or whatever right and give them that PDF and use that to be able to help get a loan on the property or partner with somebody on the property I hope that helps for you guys on that now if you have any questions while we're going through this I'm answering questions on the B key page so some of you guys might be watching us on our fixated real estate page too and I'm gonna do my best to kind of look at what you guys are watching there if you guys have questions but I'm going to actually switch over that so that I can see if anybody on are fixated real estate page is asking some questions as well and the but you can also follow me if you guys want on Instagram Tarly Garber and I'm the only Charlie Harper on Instagram so you can watch me there if you guys want and also if you have you can also do that too so hey brandy I didn't see you I the when he guys coming out to Washington so any questions that we got Chris is thank you for tea uh Chris is saying because Chris from Vancouver is saying Tommy over is a real deal thank you for teaching me how to BER I bought a duplex in 2017 and Camas Washington we have it increase perhaps after a year and a half by nine hundred dollars any changers I remember Chris like you used to come to all our events how come you're not coming up here anymore and hanging out with us so hope you guys like that what any other questions that you guys have the Jenni is asking what kind of design software are you using we use Home Designer Pro right we use home design Pro and I technically do not use it and so we have somebody on our staff Serena who works with us at time she uses it and she makes it all pretty nice is actually very very easy to use I've attempted to use it I just want the patience to sit down and make those things what I do is I print those things out that she makes and I take white out I take this little doohickey here and I draw the walls in that I want the property to look like and then I give that back to Serena and say can you put this back into Home Designer Pro and it comes out as a proposed plan and it looks all pretty and nice and and I'm like cool right so we can we give that to our contractors and stuff so that's what we use now if you have any other questions let's see one more no I hope you guys liked that video and enjoyed the breakdown of our property walk through our property that we just bought in Renton Washington if you guys want to see more videos like this let us know and make sure you comment like subscribe on everything bigger Poppy's does on YouTube and here check out our webinar with Jay Scott I tomorrow you go to the webinar page on VP and I do live broadcasts here on BP as much as possible typically on 12 p.m. Pacific Standard Time every Wednesday we like to do property walks this one we ended up doing it at home instead for convenience factor and also I wanted to share one of the projects we just bought or not buy here so any other questions if not I will see you guys next Wednesday at our next broadcast or tomorrow night at the webinar with Jay and I and I'm signing out make sure you guys comment and I will come back and answer your questions with mushrooms [Music]

Channel: BiggerPockets

Views: 69,431

Keywords: biggerpockets, real estate, real estate investing, investing, rental property, investing in real estate, bigger pockets, BRRRR, brrrr strategy, brrrr method real estate, brrrr real, brrrr real estate, brrrr real estate strategy, tarl yarber, real estate investing strategies

Id: E8NBF797kiw

Length: 36min 13sec (2173 seconds)

Published: Thu Jan 16 2020