FlipperToolbox

Hey guys, just wanted to share my recent experience with you all. So, I’m heading to Birmingham this October to check out some real estate deals. I decided to get a head start by analyzing every single family home listed under $200K on Redfin, which totaled to about 350 listings. I ran each one through my BRRRR underwriting model before even thinking about scheduling property tours. Spoiler alert: none of them made the cut. Thirteen came close, though. Let me break it down for you.

First things first, I want to clarify that Birmingham’s median sale price hovers around $210-214K. By focusing on homes under $200K, I essentially looked at the lower end of the market. This analysis doesn’t mean that Birmingham as a whole isn’t BRRRR-friendly; it just shows that the bottom of the Birmingham MLS isn’t currently conducive to the BRRRR strategy.

Now, let’s talk numbers. I made some assumptions across all 350 listings, like a 20% down payment, a 7.5% conventional investment loan, and other financial details. After crunching the data, here’s what I found:

– In the $40-80K range, 59 listings showed an average monthly cash flow of $254, with a DSCR of 1.22. Almost all of them had positive cash flow.
– Moving up to the $80-120K range, 111 listings had an average cash flow of $80 per month, but the DSCR was a bit low at 0.95.
– As we climb higher in price, the cash flow starts to dwindle. The $120-160K and $160-200K ranges showed negative monthly cash flows and DSCRs below 1.

Out of all the listings, three deals came the closest to meeting the BRRRR criteria. However, each had its own set of challenges that made them not quite ideal for the strategy. For instance, a property in Monte Sano looked great on paper but had high rehab costs that didn’t align with the ARV. Another property in Ensley had a good cash flow potential, but the lack of comparable renovated properties in the area made it difficult to determine the ARV accurately.

From this exercise, I learned several key lessons. Cheap properties may cash flow well, but they might not be suitable for BRRRR due to high rehab costs relative to the property value. Additionally

So, a while back I shared my journey of revamping my kitchen. It all started with me deciding to paint my cabinets brown after dealing with the aftermath of removing paint off my floors, which ended up looking like a chocolate syrup splatter that just didn’t vibe well with my countertops. So, I made the switch to a clove brown paint for the cabinets and opted for wood grain stick-on vinyl for the counters as a temporary fix until I can upgrade to butcher block. I took on this entire project by myself, but when it comes to redoing the counters, I’ll definitely need some assistance.

Here’s a rundown of what I’ve accomplished so far: I managed to remove almost all of the black paint from the tiles, though there are still a few stubborn spots I’m diligently working on. The cabinets got a fresh coat of clove brown paint, transforming them from plain white to a warm and inviting hue. I bid adieu to the old green marbled formica counters and embraced a wood vinyl countertop, which added a touch of rustic charm to the space. And let’s not forget about the sink – I upgraded from a tired double basin stainless steel sink to a stunning deep white quartz graphite sink paired with a new tap that instantly elevated the aesthetics of my kitchen.

The end result? A kitchen that feels like a whole new space, brimming with joy and satisfaction. Sure, it’s not flawless – I’m petite, dealing with health challenges, and far from being a professional contractor. But you know what? That’s perfectly okay. Because despite the imperfections and hurdles along the way, I couldn’t be happier with how everything has turned out.

In the end, this journey of transforming my kitchen wasn’t just about renovating a physical space; it was also about rediscovering my own strength and creativity. It taught me that with determination, a bit of DIY spirit, and a willingness to learn along the way, I can create something beautiful and meaningful. So, here’s to embracing imperfection, celebrating small victories, and infusing a personal touch into every corner of our homes. It’s not about achieving perfection; it’s about making a space truly your own. And for me, that’s what matters most.

Hey there, I’m a 37-year-old living in Montana, making a modest $55,000 a year. The average house price in my town is a whopping $500,000, and my job requires all us low-level IT folks to live within a 30-minute radius of the IT center for emergencies. I’ve been overlooked for a promotion multiple times, which would have allowed me to work remotely permanently. But the high-level IT managers and my boss won’t even consider helping me gain more experience or training to move up in the company.

I’m stuck with just basic IT certifications, which my job deems worthless, and there’s no opportunity for advancement without further training. Going back to college for a second Bachelor’s degree seems unattainable financially, especially since I initially studied history, dreaming of uncovering ancient relics and working in museums. Yeah, I admit I was pretty naive back then.

Without a car, I walk to and from work – not because I can’t afford one, but because my apartment lacks parking. I don’t have any friends or family to crash with to save money, and my one-bedroom apartment is already the cheapest option before downsizing to a studio.

I used an affordability calculator and found I could only afford a house priced at $175,000. Scanning through Zillow, all I could find in that range were old trailers needing costly repairs and hefty lot fees that are essentially rent in disguise. It’s hitting me hard that homeownership is now out of reach. It’s a tough pill to swallow, and I have no one to blame but myself.

Reflecting back, I regret not pursuing a career as an accountant or a computer science pro during my college years in the early 2010s. Maybe I should have focused more on academics instead of indulging in video games and anime. Renting seems like the only option for the foreseeable future. If I can’t serve as a positive example, at least I can be a cautionary tale for others.

Hey there! So, my home cooling situation was really starting to make me scratch my head. I kept blaming the rising temperatures, assuming it was just a hot streak that would pass. But as days went by, it just kept getting hotter inside. The HVAC system was working overtime, running constantly, yet the temperature kept creeping up. Naturally, I thought the culprit must be the air conditioner, so I called for a service check. Surprisingly, everything checked out fine, no issues with the AC at all.

Feeling perplexed, I decided to do some research and stumbled upon a discussion on a subreddit about home construction. Turns out, many home builders tend to overlook a crucial aspect – air sealing. I started inspecting my own home, and boy, was I in for a shock:

– None of the 6 exhaust fans were sealed, and the exterior vents were missing baffles.
– A whopping 3,500 square feet of vents across 4 zones were left unsealed.
– Top plates? Nope, not a chance they were sealed.
– Around 10 recessed lights and over 30 other lights, fans, and fixtures were also left unsealed.
– Even the under-sink drains and water pipes had no proper sealing in place.

I live in a state that requires homes to pass a static test during construction, ensuring less than 5 air changes per hour. Theoretically, my house should have been tested and passed with flying colors. But standing in my attic, I could feel a cool breeze coming from the vents, indicating a serious lack of proper sealing. No static test had been done, rendering the whole certification process seemingly pointless.

It’s frustrating to think about the amount of money wasted over the years due to inefficient heating and cooling, essentially pumping air into the attic and walls. It’s a real eye-opener to realize how much neglect there is in the construction industry, despite inspections and code requirements.

So, my advice to you is simple: take a moment to check if your home is properly sealed. Pull off a vent cover or gently sweep aside the loose-fill insulation in the attic near a vent – if you feel a breeze, you’ve got a problem. Don’t wait until it’s too late like I did. Sealing every vent, fan, and fixture in your home is like putting money back in your pocket. Trust me, it’s worth the effort to ensure your home is properly sealed and energy-efficient.

I’m currently in the process of potentially buying a house in Illinois, but things have hit a bit of a snag. After some issues cropped up during the inspection and not being able to fully inspect some key parts of the house, I told my agent I wasn’t keen on moving forward with the purchase. My agent advised me to submit a list of requests to the seller to protect my earnest money, so I did just that. However, the seller pretty much shot down all of my requests in their response a few days ago.

When my agent asked me how I felt about continuing with the deal, I reiterated that I wasn’t interested. I thought that would be the end of it, but to my surprise, my agent informed me that the seller is now considering making repairs and getting estimates. I’m left wondering how long I have to keep playing this waiting game. My lease is up in a month and a half, and I really need to find a place to live soon. I would have been open to working with the seller if they had shown some willingness to compromise, but their response was pretty much a flat-out no with some strange takes on a few of the repairs I requested.

At this point, I’m at a loss. I don’t see myself being able to do business with this seller given how things have unfolded. Should I just refuse any compromises outright? Is there a way to speed up this process without risking my earnest money? As this back-and-forth drags on, I’m starting to feel like my agent is more focused on securing their commission than on my desire to find a suitable home.

Overall, I’m feeling frustrated and uncertain about the next steps in this home-buying process. I’m eager to move on and secure a place to live before my lease expires, but the current situation with the seller is making things complicated. I hope to find a resolution soon that aligns with my needs and preferences, without jeopardizing my earnest money or being stuck in a prolonged negotiation process.

So, I recently sold my house for around 500k, and man, let me tell you, the costs associated with selling it were a real eye-opener. I mean, we’re talking about everything from realtor fees to prepping the house for showings, fixing things that needed fixing, dealing with buyer requests, and all that jazz. All in all, these expenses added up to about 10% of the house’s value. And let me tell you, it wasn’t just pocket change.

Now, I’m sitting here scratching my head, wondering if this 10% figure is par for the course or if I got hit with some unusually high costs. I have to admit, some of the expenses included fixing stuff that probably should have been taken care of ages ago, so that might have inflated the total a bit. But hey, I’m just trying to get a sense of what’s normal here so I can factor it into my future financial planning.

Just to clarify, I’m not looking to dive deep into whether each expense was directly related to the sale of the house, or if they should have been dealt with earlier as deferred maintenance, or if they were even necessary. Nope, I’m just curious about the big picture – when folks sell a house, is it standard practice to shell out around 10% of the home’s value on all these selling-related costs?

I gotta say, this whole experience has really made me rethink how I approach selling property. It’s not just about the sale price – there’s a whole bunch of other expenses that can sneak up on you if you’re not careful. So, moving forward, I’m definitely going to keep this 10% rule in mind when I’m budgeting for selling my next house. It’s a hard lesson learned, but hey, at least now I know better for next time.

Hey everyone, I wanted to ask what tools or methods you use to handle your finances when it comes to managing your rental properties, flips, and personal homes. For instance, I’m interested in finding a way to automatically categorize the income from my rental property into different sections like maintenance reserves, emergency funds, taxes, CapEx, and future investments. I don’t want all the money to mix together in one account and end up as a big lump sum. The same applies to my flip projects and personal residence. I want a clear breakdown of how much money is set aside for each specific purpose without having to manually monitor it all the time.

Do any of you rely on banks that offer features like “buckets” or sub-accounts for this purpose? Or do you prefer having multiple bank accounts to segregate your funds? Maybe you use accounting software or manage everything through spreadsheets? I’m on the lookout for a system that streamlines fund allocation and helps me stay within budget as my property portfolio expands. I’m keen to hear about your experiences and what has proven effective for you, and most importantly, why it works well.

Hey there, I’ve got a bit of a situation on my hands with my house and I could really use some advice. So, our place is mostly stucco, but there are some wood siding and trim areas that need attention. The house is pretty old, built back in the late 1950s, and I’m not exactly sure when the last paint job was done. The blue paint you see now is the most recent layer, and there’s an older red coat underneath. So, we called in some painters to spruce up the wood sections, and they initially said it was a simple job of sanding, prepping, and painting.

But here’s the kicker – once they started sanding, they suddenly hit the brakes and dropped a bombshell on me. They claimed that all the wood boards were so rotted that they needed to be replaced. Now, I’m not one to jump to conclusions or accuse anyone of trying to pull a fast one on me. I get that sometimes issues can pop up during the process that weren’t visible at first. But I can’t help but wonder if this is a normal hiccup or if I should be seeking a second opinion.

I’ve got a few burning questions on my mind: Do you think from the photos that the siding is really suffering from widespread wood rot, or is it more of a severe case of paint deterioration? How can one differentiate between a genuine need for replacement versus just a good scraping, fixing, priming, and repainting job? If you were in my shoes as the painter, what checks would you run before suggesting swapping out every single board? And lastly, would you play it safe and seek out another expert’s view before giving the green light for replacements?

Just to paint a clearer picture for you – before the sanding began, the siding felt pretty solid to the touch. I didn’t notice any soft spots, holes, or clear signs of decay, but then again, I’m no expert in the field. So, any insights or advice you could throw my way would be much appreciated. Thanks a bunch in advance!

Hey there! So, I need some advice. My partner is super stressed out because I accidentally ruined our old TV by putting it on our screened patio. I didn’t realize that indoor TVs aren’t meant to be outside, and after just two months, it kicked the bucket. With the weather warming up, we’re spending more time outdoors, and having a TV out there is a game-changer for entertaining and keeping the kids occupied while watching sports.

I’m not sure if the TV died because it was old and on its last legs anyway, or if it was because indoor TVs just can’t handle the elements. My partner is upset that we wasted the TV and believes we shouldn’t have moved it outside in the first place. So, here’s my dilemma: was this just bad luck with an old TV, or is it a common issue with indoor TVs outdoors? Should we bite the bullet and invest in a proper outdoor TV?

I’m torn and could really use some guidance on whether outdoor TVs are worth the investment. What do you think?

So, I’m in the process of gathering bids for a major project – we’re talking a second-floor addition plus a full-house renovation up in Northern Virginia. One of the general contractors on my shortlist has this payment system he calls “benchmark-based” instead of the usual milestone-based approach. Basically, instead of waiting for each phase to be completely done, payments get triggered at the start of each phase. Makes sense, right? His argument is that the next phase can’t kick off until the previous one is wrapped up anyway, so it’s kind of like hitting those traditional milestones we’re used to.

To keep things simple, he groups phases together – like combining excavation and concrete work, or lumping all the MEP (mechanical, electrical, plumbing) stuff into one payment. And when it comes to big-ticket items like windows, cabinets, HVAC equipment, and appliances that need to be ordered in advance, he collects separate deposits for those. It’s all about managing those lead times smartly.

Now, here’s where it gets a bit tricky. In his payment schedule, the last two items are what he calls the “Compile Punch List” and the “Final Payment,” which act as a kind of holdback. But on a project sample he shared with me, those only added up to 4% of the total cost, while I’d feel more comfortable with a 10% holdback until everything’s completely wrapped up. I mean, it’s a half-million-dollar project we’re talking about here, so I want to make sure I’m covering my bases.

On the flip side, this guy has been in the game for over two decades, has a couple of solid references that vouched for him when I checked, and his responses to all my queries were spot on and professional. So, I’m not really worried about any shady business going on – more like just wanting to make sure I’m following the best practices to protect myself and my investment.

So, here are my questions for all you folks who’ve been down this road before. Is a 4% holdback at the end normal, or should I really push for that 10% I feel more comfortable with? Do you think this start-of-phase billing method is truly as safe as the traditional completion-based approach, or is it a bit of a stretch? And for those of you who’ve dealt with material deposits on big projects, what kind of safeguards did you put in place to make sure