First Investment Property (w/BRRRR)

[Aaron Gillette]

After reading Rich Dad Poor Dad, I decided that I'm all in on this. So I began to looking into bigger pockets and listening to about 20 hours of podcasts. So first thing I noticed in my small market is that we have only a few homes for sale and next to no rentals open. So lets go look for the first few homes that need some REHAB that will make a decent rental. 

The first home I go to see is a complete nightmare. Someone started to work on the home and decided to quit and the reason is unknown. ceilings had mold and it was really a 2 bedroom home and not 3. The garage has almost no foundation left and probably would just need to be taken down and replaced.

I find a much better home at another great price but I don't have the upfront capital for the purchase price before rehab.......  

So I began to look into getting a HELOC on my home I live in now that I bought as a foreclosure just over a year ago for 45K. So I call the bank and along with great credit they go and tell me that the rough estimate that I can pull as equity is 100K. I was completely shocked. That's a 200% return as it only took 5K to get the house up to par. This doesn't include if I finish my unfinished basement with another bedroom, bathroom and office space.

Originally thinking I was going to start with a 20K house that would need a lot of work, to maybe a 45-65K house with less rehab to pull the 80% LTV.

I will continue to update this as the time goes on.

[Ronald Starusnak]

Originally posted by @Aaron Gillette:

After reading Rich Dad Poor Dad, I decided that I'm all in on this. So I began to looking into bigger pockets and listening to about 20 hours of podcasts. So first thing I noticed in my small market is that we have only a few homes for sale and next to no rentals open. So lets go look for the first few homes that need some REHAB that will make a decent rental. 

The first home I go to see is a complete nightmare. Someone started to work on the home and decided to quit and the reason is unknown. ceilings had mold and it was really a 2 bedroom home and not 3. The garage has almost no foundation left and probably would just need to be taken down and replaced.

I find a much better home at another great price but I don't have the upfront capital for the purchase price before rehab.......  

So I began to look into getting a HELOC on my home I live in now that I bought as a foreclosure just over a year ago for 45K. So I call the bank and along with great credit they go and tell me that the rough estimate that I can pull as equity is 100K. I was completely shocked. That's a 200% return as it only took 5K to get the house up to par. This doesn't include if I finish my unfinished basement with another bedroom, bathroom and office space.

Originally thinking I was going to start with a 20K house that would need a lot of work, to maybe a 45-65K house with less rehab to pull the 80% LTV.

I will continue to update this as the time goes on.

Aaron, I am in Syracuse and have bought over 2 million in real estate just this year and closing on more. I am focused on SFHs and duplexes right now. Syracuse will not appreciate, BRRRR is very difficult in Syracuse. I buy pretty much everything that works as a BRRRR in the sub-urbs lol. If it pops up and the numbers make since, we buy it right away.

I didn't know Empower offered that kind of HELOC, that's awesome! Shoot me a message with your email on here and I'll help you analyze deals, give you some spreadsheets I use to analyze them quickly and what kind of criteria I look for. There are a few duplexes closer to Solvay right now on the MLS. I'm probably not going to buy them but I think they make sense.

208 Freeman Ave, Syracuse NY 13209 - Send me a message if you want a help getting an offer in on these fast. I have an amazing agent that doesn't skip a beat. 

208 Freeman Ave, Syracuse NY
LISTING PRICE	$30,900
OFFER PRICE	$27,500
REHAB COST	$25,000
ARV	$94,000
CLOSING COSTS	$3,500
REFINANCE COSTS	$3,500
INSURANCE COSTS	$650
TOTAL COSTS	$59,500
ANNUAL MORTGAGE	$4,548
ANNUAL TAX	$3,946
LOAN AMOUNT	$65,800
ANNUAL PITI	$9,144
ANNUAL RENT	$19,800
ANNUAL TAX BILLBACK	$0
ANNUAL NET	$10,656
CASHBACK AT REFI	$6,300