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Within the sheets there are the following:
As with all analysing sheets they are only as good as the data you put in them and as such I want to give some caveats as well as some top tips. Firstly knowing your area is key as factors such as voids and maintenance is very dependent on area. I know people who have suffered big void periods in certain areas of the country as well as much higher maintenance bills. Secondly I have put together these top tips to help you use the sheets:
1: Be realistic with your projections: value of refurbs can vary massively depending on spec; however I would urge you to be super realistic with what costs are likely to be. 8k is not getting you a new kitchen, new bathroom, new electrics, replaster, new flooring and paint throughout. Unless perhaps you’re doing all the work yourself.
2. End values are hard to predict: If you are analysing a BRRR deal remember that the end value is likely to be calculated on comparable sold prices in the area (200m from your street). As the properties your value will be calculated against haven’t yet been sold (due to the delay in completion from offer) I would base your predictions around prices of “on the market” properties that are similar today with a 5% tolerance for fluctuation and negotiation.
3: Don’t be too Optimistic or Pessimistic: I have spoken to many people who deliberately either downplay the downside or upside. Neither is helpful! I would advise you to be super balanced in your appraisal as if the end result didn’t matter, as long as it was about right. Take your money or anyone else’s money out of the equation.
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