Multifamily BRRRR: Is It Worth it To Add Another Unit? | ProjectRE

We’ve seen many investors do a multifamily BRRRR, and while some are more simple than others, adding a unit to your property can make things a lot more costly, and a lot more complicated. Does that mean you shouldn’t ever add extra units? No! Adding units to a duplex, triplex, fourplex or any other multifamily property can dramatically boost ARV, cash on cash return, and monthly cash flow!

Today, James Dainard walks us through his recent acquisition, a triplex located in Seattle, Washington. He and his team purchased it for $1.25M and plan to put in half a million dollars in renovations, with an ARV of around $2.3M. This fourplex will cashflow $1,600 a month, not to mention the sizable equity play, adding hundreds of thousands of dollars in value for James and his team.

Tune in to hear some of the most crucial factors when deciding to add an extra unit or not, plus what to look out for when making that decision!

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00:00 Intro
00:22 Should You Add an Additional Unit?
00:49 The Numbers
01:26 2 Important Factors When Adding Units
01:50 1. Check Zoning
02:14 2. Double Check Your Financials
02:40 Why This Property?
03:59 Are You Spending Too Much?
04:52 Hidden Costs
06:39 A Big Seattle BRRRR
08:33 What to Look Out For?

[CynthiaCole]

This is one of the most informational videos I’ve seen! Can’t wait for more videos from you!

[ProjectRE]

Can’t wait for you guys to see the next episodes!! Let’s goooo!

[lukemedico]

Right on! Thanks for doing this video. I am not totally following all the numbers. Can you let us know what your estimated total positive monthly cashflow on the building? Also, I was confused with the math with the exit strategy. Where does the 212K of capital back come in from the refi? A few of the comments contradicted themselves. I am super interested in knowing the numbers across the board.

[ButBigger]

It is insane the difference in a house 1 mil buys in different areas.

[ThanhTran-qqxm]

So much info in such a short clip. Thank you

[Music-tfyn]

How do you know the new appraised value before you do the reno? DO you just hire an appraiser

[therealloulove]

The numbers always confuse me 2.3mil gets you $1600 a month ? I can get a $5, 000 car on Turo and make that … can someone explain to me how $2millions in debt to generate $1600

[jessicawillison]

All your math made sense to me, you did a great job explaining, the part I don't understand is the timing of all this. At what point did you make your offer on this property? Before or after you found out about all the additional costs to create an additional unit? And if you made the offer before, did you just put in a contingency for getting out of the deal if the numbers did not actually still workout? And if you made the offer after, I guess the seller was not inundated with other competitive offers that might have gotten the building before you, making all the time and effort you put into analyzing the property a waste, right? Or did you happen to know that there was no other potential buyers?
I ask because I too am trying to analyze properties which need a large amount of rehabbing, but I am not sure how much time to put into analyzing the fine details since I might not finish my analysis while the property is still on the market. Thank for your help.

[veneno]

Hello good videos thanks for sharing, so how much you think is ok to make per door?

[bthomas]

That construction budget seems wildly optimistic

[wmjessemiller]

Cash flow of 1600 on a 2mil plus mortgage? Damn

[supairish]

Great video thanks for sharing info, but man that project would turn my hair fully gray, lol

[reactionreaper]

👋James help here me. I just need help getting a 6-8 rooms duplex, and I can easily cash flow more than what you're bringing on this property.

[tomcat]

Isn’t it a mistake buying in Seattle? I mean, what happens to your investment in the event of another riot?

[CV-nnjj]

I would not want to invest in Seattle. Awful landlord laws.